UBS cuts Applus as takeover bids weigh on trading price
18/04/2024 13:01
** UBS cuts Applus APPS.MC to "neutral" from "buy", saying
that two competing takeover bids by funds Apollo and Amber and
the company's board's favourable opinion on those are weighing
on the industrial testing firm's trading price
** Applus' recent performance, of between 11.4 and 11.7
euros per share, is below UBS's updated target price increase to
12 euros
** Meanwhile, Amber and Apollo offered 10.65 euros and 11
euros per share, respectively
** The takeover bidding war for industrial testing firm
Applus started last summer when the two buyout funds filed a
tender offer for the Spanish company
** UBS says that Applus continues to deliver well
fundamentally, with strong organic growth through 2023 and
progress on deleveraging
** The broker adds, however, that the company faces material
uncertainty with the news on the Idiada division retender due by
September 2024
** "Applus trades on about 11x FY 2024 PE and EV/EBITDA, a
20-30% discount to wider Testing & Inspection peers given rebid
risk and a lower margin portfolio overall", UBS adds
(Reporting by Jakub Olesiuk)
((Jakub.olesiuk@thomsonreuters.com))