We have analyzed the Shanks Group plc pre-deal situation. Shanks stated on 07-Dec-09 that it had received a highly preliminary and unsolicited approach from a private equity group regarding a potential cash offer of 135p per Shanks share. We have looked at the upside/downside dynamics for the current 130p share price. Given that the PE firm might have difficulties both to have access to high leverage and to generate attractive IRRs for such a transaction, we believe that there is a risk of no materialization of such a 150p bid (the only level which would be successful in obtaining board and shareholder approval). We believe that a short around the 130p level is an attractive risk-adjusted short duration trade, with limited downside and 20%+ upside in case no (succesful) bid materializes.
For full analysis (including full LBO analysis), please access the Panta Client Section.
Panta Capital's Idea Sample Blog is designed to share a limited sample of what Panta Capital considers as attractive event driven and special situation investment ideas & insights. Please contact us to gain access to the PANTA CLIENT SECTION, where you will gain full access to all attractive European and North-American situations and analyses.
Panta Capital's Idea Sample Blog is designed to share a limited sample of what Panta Capital considers as attractive event driven and special situation investment ideas & insights. Please contact us to gain access to the PANTA CLIENT SECTION, where you will gain full access to all attractive European and North-American situations and analyses.
