Info5 May 2020 16:49
Royal Mail’s bid potential only reason not to sell shares - Deutsche says
It comes as Vesa Equity Investment has increased its shareholding.
Stake building suggests Royal Mail PLC (LON:RMG) could be a takeover, according to Deutsche Bank.
Bid ‘risk’ is the reasoning behind a lukewarm upgrade for the FTSE 250 share by the German bank, which moved to ‘hold’ from ‘sell’.
Deutsche’s price target of 183p (current price: 171p) was lifted from 93p.
“Our fundamental view on Royal Mail is that it is overvalued on a stand-alone basis and that the shares are fundamentally worth 93p, far below the current share price,” analyst Andy Chu said in a note.
“However, last Friday, after market close it was disclosed that Vesa Equity Investment had upped its stake in RMG and crossed the 4 and 5% shareholder ownership limit to a 5.35% stake (RMG's 4th largest shareholder).”
Vesa Equity Investment is the vehicle for Czech billionaire Daniel Kretinsky, who owns Sparta Prague football club and has recently been snaffling stakes in other major European companies.