Morgans moves to a Hold rating from Add after SmartGroup Corp received a non-binding indicative offer from US private equity firm TPG Global and Potentia Capital (consortium) for $10.35 in cash. The target price rises to the $10.35 bid price from $8.35.
The broker feels the likelihood of the offer being withdrawn is lessened by the company’s resilient earnings base, clean balance sheet and recently renewed long-term contracts.
The Board, which intends to unanimously recommend the offer, has granted four weeks exclusive due diligence.
Sector: Commercial & Professional Services.
Target price is $10.35.Current Price is $9.28. Difference: $1.07 – (brackets indicate current price is over target). If SIQ meets the Morgans target it will return approximately 10% (excluding dividends, fees and charges – negative figures indicate an expected loss).
