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Shore Capital analyst Greg Johnson pointed out that the value represents an EV-to-EBITDA ratio of 8.6x on current-year estimates, falling to just 7x next year.
"We do not believe it reflects the quality of the estate (especially having recently exited the challenged leisure business), the freehold asset backing (c£160m) and the progress it was making across its strategic objectives on margin accretion (250-350bps) and deleveraging (under 1.5x EBITDA)," Johnson said.
If the company was to hit its targets, it would improve EBITDA to around £130m within three years, up from £83m last year. This would mean the EV would rise to around 100-120p per share, based on an EV-to-EBITDA multiple of 7-8x.
"Importantly, improving profitability would be expected to lead to a significant step-up in cash generative capabilities underpinning rating expansion."
Johnson said that 80p a share would be "a starting point more consistent with the longer-term opportunity".
The market thinks maybe a bit more in it. Yes debt is high, but personally I would be happy to wait a few years rather than 65p. There’s also a lot of investors underwater here, see what happens.
looks a pretty good offer to me either dept piled up and dilution to save its ****. wagamama was the only thing worth saving maybe that is where the value is hidden. the intention was to build it into a global brand, rolling out branches in us and europe and even a takeaway deal with sainsbury. big ambition sunk by the rest of the dross with enormous overheads. i thought the founder of wagamama might try and buy it back at a fraction of what he was paid for it. definitely not as good in value or content
I've sliced a few, but i'll stay in to see how this plays out. If us small fry can see there's more value, then so can the professionals .
I don't think its the end of it. £1.00
Sorry didn’t finish. “ acceptances for it already have been received from shareholders representing 19.9% of its total.”
I’m hoping for a revised offer when it’s seen that this doesn’t meet shareholders expectations.
Only 19% of shareholders have currently agreed, that’s low on announcement of deal imo. I’m wondering if this will struggle to get through. “
It is a real shame that yet another Restaurant Company has sold out to Private equity, undervalued and a disregard to customers who are also shareholders. I wonder if the shareholder vouchers cease to have any value once the sale goes through at a price below the SP. I for one will cease to be a customer , just like Franca Manca no longer gets my custom .
Very sad to see it sold for 65p essentially less than what they paid for Wagamama several years ago despite growing it in that time & brunning & price being worth considerably more. I’ve bought & sold shares in rtn for several years, this business was worth 7.20 a share several years back, today in my mind it’s worth double what it’s being sold for, it’s the steal of the century & someone’s gonna make a small fortune. I’ve sold my small holding today for a small loss. GLA
For BoD to accept this deal, there must to some sweeteners offered to them. Does anyone know what they are? Are they duty bound to disclose them. I can't. believe they changed their mind overnight after resisting for longtime to split the company. As it was pointed out here at the mo all UK companies suffering due to inflation etc. This company worth more than £1bn when we recover in 12 months. No need to rush to sell out to asset strippers.
Interesting that the share sell price is over the offer price. I’m not selling for a small bonus, it stresses me out, what will be will be now.
Spades totally agree but like other company takeovers the main shareholders are all in on it, thus the pi’s are canon fodder. Don’t get me wrong I’m already 47% up as of yesterday. It’s just the likes of Apollo know once this high inflation period is over these will be worth double (they’re not stupid). Oh well could be a counter offer but I doubt it.
Have to agree. I think 65p undervalues the company by a fair margin. Hopefully we see a bidding war but won't hold my breath.
Although its a positive thing to get a bid, I may vote against it. There's a pound in this in 18mths
IMO 75p at least.
Wink!
Well done all, and hopefully expect a counter bid
Uk company given away! Ffs.
Well done if you’re in. Enjoy a profitable day!
World events.
Typically, the day you sell out will be the day the News/offer comes in. It may be volatile but there is value and one day it will be realized.
I think we are stuck here (these levels) until Jan. Anyone else suggest otherwise?
I think it’s just low volume causing strange movements. I don’t however know what will cause a material re-rate here : I think SP is suppressed (but I’m invested). Maybe when leisure gets sold the whole outfit gets viewed differently.
I do get the feeling that there is some manipulation going on with this share at times. Relatively small volumes of sells greater than buys seems to have big downward impact on SP, yet when reversed rises are small! Maybe I am getting paranoid! Passed a waga tonight and it was busy, not full, but a lot better than the others for a Tuesday night!
Have I missed something? Carnage over the last few days > blood everywhere?
Sector sentiment maybe changing, the MAB update yesterday was fairly positive, inflation falling and interest rates maybe at peak or close to. If no more major macro shocks next year could be good for SP I live in hope!
Its creeping up on small volume an no news, always a good sign of changing sentiment
I don't think they give Quarterly's. Although it maybe be different this year with the activists chirping in their ears.