Reject the current offer5 Feb 2022 22:04
From Investor Chronicle Bear-Bull fund the other day: “However, cash may be forthcoming soon, thanks to a recommended 125p-a-share cash offer for aircraft charter specialist Air Partner (AIR), which values its equity at £80mn. What is remarkable is not that the offer – from Wheels Up Experience (US:UP), a US firm in a similar line of business – should be at that level, but that the directors should recommend it. Less than two years ago the shares traded at 144p. More important, even without trying, per-share values of anything from 142p to 173p spring from Bearbull valuation models that use weighted average profit or cash flow for the past five years as the value driver. Yet Air Partner’s bosses were so thrilled by recent trading that either side of Christmas they raised their profit guidance for the year to end January, adding that, in effect, there was also £13m of spare cash in the balance sheet. So it feels slightly insulting that the offer precludes a final dividend for the year just ended. The pity is that almost 12 per cent of the share capital is irrevocably committed to the offer and another 16 per cent is in non-binding commitments. Let’s hope Air Partner’s other shareholders are sufficiently switched on to get the offer to more realistic levels”.