I’m a shareholder in Flexigroup and would really appreciate your view on the 1 for 4.46 share offer at $2.20 that they are currently offering? Can you comment on this? I’d appreciate your point of view.
A: Given that the entitlement is non-renounceable and is at $2.20 compared to a market price of circa $2.98, you would be mad not to take them up.
The question is what you do afterwards.
The market seems to like the acquisition, feeling that it should be earnings accretive. Although growth is an issue for Flexigroup, the pricing metrics are attractive (multiple of 10.0 times FY 16 earnings). According to FN Arena, the brokers are positive (sentiment of +0.7 on scale of -1.0 most negative, to +1.0 most positive). The consensus target price is $3.05.
Hope this helps.
