Market's view on Equals Gp
Published on April 2024
- A stock watcher highlighted the need for transparency and action in a company’s ongoing situation, emphasizing the lack of bid premium in the share price and suggesting that it may rise if no buyout occurs.
- Another observer noted Darktrace’s bid, expressing regret over a solid tech company potentially being undervalued and sold.
- A detailed critique was offered on Equals Group, describing its exploration of a potential sale since October 2023. Despite strong fundamentals, the protracted bid process has not yet yielded a firm cash offer, raising concerns about the board’s intentions and the potential undervaluation of shares.
- Concerns were raised about the management of customer balances at Equals Group, particularly how interest on these balances is handled compared to their competitor, Alpha Group.
- Doubts were expressed about the impact of prolonged high interest rates on private equity valuations, potentially affecting takeover prices.
- Discussion included speculation about Equals Group’s valuation based on sales forecasts and interest earnings, with a detailed analysis suggesting a reasonable takeover price might exceed £2.00 per share.
- Queries were raised about the transparency of Equals Group’s interest income from customer balances, with no public disclosures since 2019 despite significant growth in transaction volumes.
- A stock watcher speculated on the potential for Equals Group’s sale, considering the significant undisclosed funds possibly affecting profitability.
- General discussion around market movements and stock performance noted a specific stock closing at a four and a half-year high, with hints of a potential breakout in share price.