John Laing could get offer around 384p predicts broker

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John Laing Group PLC (LON:JLG) could attract a price of 384p, according to broker Liberum, after the infrastructure investor confirmed yesterday that it is in discussions with private equity group KKR regarding a possible takeover offer.

The FTSE 250-listed group, which owns a portfolio of infrastructure assets and boasts a net cash position, said there was no certainty that a firm offer for the company will be made, nor at what price.

The company’s net asset value per share (NAV) figure at the end of 2020 was 310p and the shares closed Wednesday at 305p before leaping to 379.8p by the end of trading on Thursday.

KKR has until 5pm on 3 June under ‘put up or shut up’ rules in London.

It was not surprising that JLG has attracted a bid with the shares having fallen by almost a fifth over the past 12 months, and the group’s portfolio offering the scope for predictable, long-term cash flows, said analysts at AJ Bell.

“We are not surprised that KKR sees value here and they could be accused of being opportunistic,” said broker Liberum on Friday, noting the positive read-across to Balfour Beatty plc (LON:BBY).

“Others may gate-crash the party creating a competitive tension. But low risk assets generally get low returns; a 20% premium to NAV gives 384p. 

“A higher price might be achievable if the buyer can generate synergies.”

 

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