Brambles has confirmed an incomplete engagement with CVC Capital Partners regarding an unsolicited bid, highlighting no formal offer has been made.
UBS still retains a fundamental valuation that is higher than the 11% increase in the share price that occurred in reaction to press speculation, which indicated the bid was above a $20bn enterprise value.
While negative free cash flow in FY22 is suspected a strong recovery over coming years is considered likely, and the broker will look through the temporary headwinds of higher lumber costs, loss provisions and timing of expenditure.
Buy rating maintained. Target rises to $13.70 from $13.25.
Sector: Commercial & Professional Services.
Target price is $13.70.
