ketchup of catch-up schreef op 31 januari 2019 15:11:
( let op Carlos die is nog niet uitbeeld, is dit zijn hand ?)
KPN PE BID Interest - more details
Bloomberg is reporting that private equity firm, Brookfield Asset Management is considering a bid for KPN, no decision as yet has been made as to go ahead with a firm bid
to state the obvious this is a positive for KPN and for the whole sector as such ; similar to the reaction when TDC was taken private back in Feb 2018
On KPN specifically we think the risk-reward still looks good with upside above our 3 euro fair-value
in terms of read across to other stocks , we wud strike a note of caution thet few companies share the same characteristics that made TDC and potentially KPN attractive targets for PE firms
we believe the ones that stand out to us are Elisa, DNA and Tele2
what cud this mean for KPN ?
as we wrote yday KPN is one of the few telecoms who makes a decent ROCE, well in excess of their WACC with an unlevered FCF yiels well in excess of the sector
see our article " you hv to spend money to make money "
TDC sold at a 32% premium to its undisturbed price for a multiple of 8.0 x trailing EBITDA and 17.6 x OpFCF, using the same multiples for KPN implies a value of between min 3 to 3.70 for KPN
there is a lot of PE money waiting on the sidelines to be put to work, also for 3rd party.
we note that KPN has a special "stichting" an non-executive supervisory Board who are supposed to have the interest of the company and all stakeholders in mind
they can elect to double the share count of the company for a period of time, effectively giving them the ability to block any take over
they did previously do so with America Movil
this means any takeover wud be subject to scrutiny over investment and job plans
with KPN's shares still trading below our fair-value , we believe the risk reward still looks good here
unquote
we reiterate our buy from a few days ago when the share was trading at 2.40 euro
TP fair-value 3 euro
takeover potential -> 3.70 euro
ps: PE kan als parkeerplaats fungeren, vergeet dat niet - het is niet altijd for own account om later een turn op de waarde te maken, het kan ook in opdracht van een " Meester " zijn.