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magazineBrookfield and Homeserve in talks as broker says shares could be worth £15
Homeserve (HSV) 970.5p
Gain to date: 43.7%
Original entry point: Buy at 675p on 24 March 2022
On 21 April business services group Homeserve (HSV) announced it had entered talks with Brookfield Infrastructure in relation to a potential offer.
Brookfield Asset Management is one of the world’s largest alternative investment management companies with $688 billion of assets under management.
There are a number of factors which make HomeServe a natural target for private equity ownership.
These include its inflation-protected, annuity like income streams. Specifically the defensive and recurring nature of its profits enable it to support higher levels of debt.
As a private company there are a number of actions that could be undertaken that would potentially be harder to execute as a listed company.
Brookfield now has until the close of business on 19 May 2022 to make a firm offer or walk away. The stock has gained 38% since Brookfield’s first approach.
Business services analyst David Greenall at Davy suggests the business could be valued at more than £15 a share.
SHARES SAYS: Hold tight and wait for details of the bid.
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 Youinvest.
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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