Jefferies sees binding bid for Australia's Costa Group highly likely, raises PT

Costa group

25/07/2023 01:52

** Analysts at Jefferies assume a high probability of Paine
Schwartz Partners (PSP) moving to a binding bid on current terms
for Australia's leading horticulture firm Costa Group  CGC.AX  
    ** Earlier this month, Costa gave PSP access to its books
after the latter's A$1.39 bln ($927.41 mln) indicative offer for
shares it does not already own
    ** Jefferies upgrades PT to A$3.15 from A$2.40, reflecting
minimal risk to deal completion
    ** Brokerage notes CGC has been materially affected in the
past 3-5 years by extreme climate conditions
    ** If conditions continue to normalise with El Niño, then
PSP may have timed its bid extremely well - Jefferies
    ** Brokerage estimates 1H23 net profit after tax before
SGARA of A$63 mln vs A$49.2 mln reported last year
    ** CGC stock up 18.9% YTD, as of last close
 
        

 (Reporting by Himanshi Akhand in Bengaluru)
 ((Himanshi.Akhand@thomsonreuters.com;))