Stock Spirits agrees £767m takeover with CVC funds, shares surge
By Michele Maatouk
Date: Thursday 12 Aug 2021
(Sharecast News) - Spirits company Stock Spirits surged on Thursday after agreeing to be bought by funds affiliated to private equity firm CVC in a £767m deal.
Under the terms of the acquisition, Stock Spirits shareholders will receive 377p per share in cash. This is a premium of around 41% to the closing share price on Wednesday.
Stock Spirits chairman David Maloney said: "The directors of Stock Spirits are confident in the long-term prospects of the Stock Spirits Group and believe that the offer reflects our strong position and represents compelling value for Stock Spirits shareholders.
"Stock Spirits continues to deliver an extremely resilient performance and has an even more loyal and engaged consumer base for its outstanding brands. We believe that CVC's support for our existing strategy and the investment that it intends to make in order to grow our business means that this offer will benefit all of Stock Spirits' stakeholders. We are therefore unanimously recommending the offer to Stock Spirits shareholders."
At 1045 BST, the shares were up 44% at 386.50p.
Shore Capital analyst Greg Johnson said: "An approach for Stock Spirits is understandable in our view given its leading market position across several European markets, notably in Poland and Czech Republic, and the potential to generate mid-to-high single digital annual revenue growth across these territories.
"Despite the premium, we would see a valuation of 13x our 2022F EBITDA and 21x earnings estimates as modest when set against wider peer valuations and the conservative nature of our forecasts. A frustration on the historic valuation, despite several years of robust performance, we share with management.
"It remains to be seen if the bid flushes out counter offers from industry players, which may be able to extract greater synergies."
ShoreCap has a 'buy' stance on Stock Spirits.
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