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Might be down to other interested parties coming forward to the affray, Veolia and Suez have expressed interest and some other norwegian company.
Lunchtime Spike yesterday. Any reason why cant see a broker upgrade or any news. Fat fingers ???
Just came for a look as they are my personal water co. fat, I don't entirely like the looks of Pennon balance sheet for a start but anyway, you have to ask why would a US outfit want to take Viridor (Haul Waste as I know them)? Maybe it has to be because they can see inefficiences which Pen have not sorted. Not hugely surprising to me, Pen is the most expensive water co in the UK by far and that has to smack of inefficiency in my book.
I have invested here based on positive momentum. Up 8% in 1 month, 22% in 2 months, 23% in 3 months and 52% in 6 months. Usually a good sign.
I think this type of old news snippets are to raise the share price by interested parties.
PNN remains high in long term debt and their earnings cover just over 10% of this, funded in the main from Viridor.
Whilst PNN can currently borrow at low rates, it is highly leveraged and funding increased dividends for it's predominant Pension Fund shareholders.
If Viridor was sold (most likely private) much of the sale would have to reduce overall debt levels but whoever had Viridor earnings would have to rise through operational efficiencies even though it has growing assets .
Pennon without Viridor does not look attractive? I sold out here and invested it in Renew Holdings, only buying back into PNN in the 700's if it occurs as there could be many months to finalise any sale.
Apologies - £1.5 billion (plus debt) for South West Water - that should have read.
What's a billion, eh ).
£4b has more or less been turned down by the us equity company...personally i can see a huge bidding war..wont go for less than £12 pop...probs slot more
This looks very interesting imv.
Viridor carries about £1 billion worth of debt from memory.
So if Viridor was sold for an enterprise value of £4 billion ( £3 billion plus £1 billion debt).
That leaves the UK water business valued at circa £500 million (plus debt).
That leaves ample room for upside - IF that £4 billion figure is anywhere near accurate IMV
What do others think??...
ref my post of 13th november
Many thanks. Whilst I suspected that the rise must have something to do with Viridor I had not picked up that news at all.
At £11 per share the market cap is about £bn 4.631
If they can get a bid of 4 bn£ for Viridor (as Telegraph seems to be suggesting) that doesn't leave much for H20 - about £m 630.
I do not know the debt position but that amount for the water component would seem cheap.
"US private equity firm KKR in surprise bid for Viridor as sellers seek £4bn"
Anyone know the reason for the increase in the share price this morning?
This news was not unexpected by the market and the SP had already included the effect this would have on the company. Today's news was not as bad as expected so the SP reacted and moved upwards accordingly. Now IMHO the share will continue to rise as others can see that the Boris effect will be Soooo good for Pennon. This may not be the case for others in this industry who have been sitting on the sidelines without making plans and looking ahead for this news.
Well pennon is becoming a bit of a momentum share. Hard to believe it was as low as £6.08 Feb 18. up near 70% since then (for the minute at least)
I was wondering if someone could better interpret this for me, from todays RNS "a post tax real cost of capital for the industry of 2.92% on a CPIH basis (1.92% on an RPI basis)"
When i read this, this morning i was expecting the shares to drop significantly, coupled with headlines today of £50 savings for water customers....... with 1.7M customers, that could be a near 85M reduction on the bottom line before efficiencies...
But what happend, the Boris bounce continued... interesting
Well I suppose it was expected as the threat was subdued. Most stocks were up and the re nationalised ones even more so.
look at that SP go.............
Oh dear.
Reducing the waste in the first place.
Yes theres debt, comes with investment. As far as shift from incineration...to what??. Landfill...not many holes left these days to fill up, not to mention its far more harmfull to the envirronment.
l will still wait as there's plenty of debt and risk to the businesses, V looks overvalued as all the EFW sector could find as sentiment shifts from incineration to avoiding it in the first place.
Dont think you will see it at the 770p level again, 950p by xmas is a distinct possability. Too much going on, and if pennon does split itself up , its been mooted Viridor itself would be worth 3B alone. Thats if someone doesnt buy the company anyway which is a real possability again
Sold at 923, on it's way down for a while, may hit 770 and buy back in
Needs to get past 900 first, but is challenging 959, the all time high made in July 2016.
PS: Lots of bullish indicators here.
DYOR
Trading statement out today, but the breakout was yesterday from 780. GLA and DYOR
Analysis: https://uk.tradingview.com/i/mevyNhg9/