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Happy you have to mental to compare PMO to 50bln BP depbt.
but if you want to stick to BP, use similar size AKER BP
https://akerbp.com/en/investor/the-share/share-performance/
They have Mcap now £4.4bln with $4bln debt
https://akerbp.com/en/investor/debt-and-bonds/
" it will require the Investment community to invest to allow the Chrysaor shareholders to exit,"
it's so blatantly obvious that's the case, hence the view that maket sentiment towards NewCo PLC will be negative.
No one is going to trust it until it's performed, and all the hot money is, out except the over anxious looking for quick buck to recover their losses.
Step foward.... Collateral Mark II
If you look at this pragmatically:
Chrysaor - PE backed with billions invested and unable to IPO (Why bother with PMO if you could), its a route to an exit for the PE money via an LSE listing
PMO - Barely surviving under relentless debt burden, management incentives almost worthless, this is their exit from a difficult place...
This is not a deal based on commercial logic and synergies, its a way for two teams to achieve an exit... it will require the Investment community to invest to allow the Chrysaor shareholders to exit, PMO shareholders are quite simply collateral damage in this process.
By your logic the mc is undervalued
You would really have to throw in earnings in there to get the full picture. Pretty simplistic view of things.
...which is more than BP.
Note I prefer measure of net debt / market cap because this is a more accurate and market-based measure than looking at book values etc. which are subject to accounting chicanery and judgements.
So:
Chrysaor/PMO net debt: $3.2bn
Implied MC: $2.5bn ($106/5.45%)
Gearing (Net debt/MC): 128%
BP net debt: $40.9bn
MC: $50.6bn
Gearing: 81%
BP also pays an 8% dividend yield.
Analysts think BP debt too high, where does that leave Chrysaor? What is the relative investment case here?
This is still significantly overvalued all other things being equal imho