In today’s briefing:
- KKR/Smart Metering Systems: Agreed Cheap Offer
KKR/Smart Metering Systems: Agreed Cheap Offer
- KKR takes advantage of a the depressed share price of Smart Metering Systems (SMS LN) that operates a stable, cash generating and misunderstood defensive business with revenues linked to inflation.
- KKR offers 955p (+8.31875p/share declared divi), a 40% premium 40%, 15x EV/24e EBITDA. 0.1% irrevocable undertakings is negligible (top ten shareholders own c.54%). A counteroffer and/or sweetening is possible.
- Spread is 0.45%/1.52% (gross/annualised, assuming settlement by 29 March, including declared dividend). Turnover has been high since announcement. Risk/return seems attractive. Recommendation is long SMS LN.
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