Analysts at Liberum believe Cordiant Digital Infrastructure Ltd's (LSE:CORD) €97 million acquisition of Speed Fibre is at a 37% discount, although the investor's net asset value is also at a 37% discount to its share price.
Upping Cordiant’s look-through earnings forecast by 19% to £125 million, Liberum sees strength in the Speed Fibre purchase largely because of its main asset Enet, a network that covers 88 Irish metropolitan cities as part of a government contract.
Having obtained a €200 million Eurobond facility around a year ago, Cordiant – unlike many of its peers – has the “dry powder” in place for the acquisition, something Liberum believes was “especially useful given the more attractive valuation environment”.
However, shares in the group are trading at around a 37% discount to the estimated net asset value (NAV) of around 113p, meaning Speed Fibre’s purchase is at around face value.
Looking forward, Liberum targets a 120p share price for Cordiant and expects the valuation gap between its NAV to close to only 3%.
Shares in Cordiant Digital Infrastructure jumped close to 0.3% on Thursday, having opened at a little over 71p.