Webjet shares rise on takeover offer
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The news: Webjet shares rallied after it announced Tuesday evening that BGH Capital had made a non-binding proposal to take a controlling interest in the online travel agency.
The numbers: Webjet shares were up 2.53% to $0.91 at 3:42pm AEST and up 6.05% over the last 12 months.
BGH Capital is looking to acquire a controlling interest in Webjet with a cash offer of $0.80 per share.
RBC Capital Markets analysts took the news positively but said any deal would require a higher bid. The analysts have an 'outperform' rating on the stock with a price target of $1.30.
The context: However, RBC analysts said that the offer was a 10% discount to its last close before the bid and that shareholders would likely only entertain offers starting from $1.26 to $1.50 a share.
What they said: "In our view (and particularly because the offer is at a 10% discount to WJL's last traded price), this bid serves mostly to signal BGH's intentions," RBC analysts said.
"... any deal will likely require a much higher bid."
The source: RBC Capital Markets research
