In today’s briefing:
- KKR/Encavis AG: Voluntary Offer
- TLNE: The Tale of the Quarter
KKR/Encavis AG: Voluntary Offer
- KKR offers €17.50/share for Encavis AG (ECV GR), 53% premium, implied equity value of €2,818 million. This shows interest in renewables after the falls on the stock market in 2023-24.
- The offer represents 12.7x EV/Fwd NTM EBITDA and 32.4x Fwd P/E. On a P/E basis, the offer seems fair vs. (depressed) comparables.
- Given the current negative perception surrounding renewable energy companies, I think the shareholders are likely to tender at an attractive price. Spread is 3.77%/5.24% (gross/anualised, assuming closing by mid-December).
TLNE: The Tale of the Quarter
- TLNE reported fourth quarter results impacted by two unplanned maintenance issues and yet managed to report operating income and adjusted EBITDA for the period.
- TLNE reported revenue of $527 million in the quarter compared to our forecast of $507 million. Energy related revenue dropped in the quarter due to two maintenance issues and seasonality.
- TLNE’s stock has started to inch closer to our original target of $96, but we believe there is upside from there if TLNE is valued closer to other nuclear peers.
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