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28 Sep 2021 07:00
London, UK, 28 September 2021
Edison issues update on Electra Private Equity (ELTA)
On 16 September, Electra Private Equity (ELTA) issued a trading update for its largest remaining hospitality brands, Fridays and 63rd+1st, and named the board members for Hostmore, the parent company of those brands. ELTA's board confirmed its intention to demerge Fridays - the largest of the two operating businesses (74% of ELTA's NAV) - onto the Main Market of the London Stock Exchange (initially announced in May), early in Q421. The board aims to transition the remaining company, Hotter Shoes (10% of ELTA's NAV), to AIM, renaming it Unbound. ELTA has been following a realisation strategy since October 2016, when it had a market cap of c £1.1bn, and has since returned c £2bn to shareholders. Since our initiation note published in December 2020, ELTA's NAV has appreciated c 45% from £135m to £197m. The market capitalisation of c £222m and a c £320m management valuation for Hotter and TGI Fridays (excluding cash, see below) implies further upside for ELTA's share price.
Electra Private Equity's (ELTA) investment objective is to follow a realisation strategy, which aims to crystallise value for shareholders through balancing the timing of returning cash to shareholders with maximisation of value. ELTA intends to use cash and other liquid assets for transaction costs and to support the balance sheet of TGI Fridays and Hotter Shoes businesses for listing.
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