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magazineElementis is still a buy despite takeover disappointment
Elementis (ELM) 137p
Gain to date: 8.8%
Original entry point: Buy at 125.9p, 18 February 2021
Reports that chemicals group Elementis (ELM) had been the subject of a takeover deal that could value it at over 200p per share proved unfounded.
Late on 20 April its US-listed rival Innospec revealed it had made a cash and shares bid of 160p but that this offer had been rebuffed and a deal was no longer under active consideration.
Analysts at Jefferies say that while they ‘expect the market to be disappointed by this news, the ongoing takeover interest in Elementis implies that its shares have been cheap’.
These latest developments came after Elementis rejected three takeover bids last year from another US firm, Mineral Technologies, the highest of which valued Elementis at 130p per share.
The stock is still trading significantly below the 200p mark, which is the level at which the company has long since argued it should be valued, and we think shareholders should be patient until the shares reach this level.
SHARES SAYS: We still think there is considerable unrealised value in Elementis.
Important information:
These articles are provided by Shares magazine which is published by AJ Bell Media, a part of AJ Bell. Shares is not written by AJ Bell.
Shares is provided for your general information and use and is not a personal recommendation to invest. It is not intended to be relied upon by you in making or not making any investment decisions. The investments referred to in these articles will not be suitable for all investors. If in doubt please seek appropriate independent financial advice.
Investors acting on the information in these articles do so at their own risk and AJ Bell Media and its staff do not accept liability for losses suffered by investors as a result of their investment decisions.
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