Compass Group PLC (LSE:CPG) should be able to increase its hand backs to shareholders following the sale of its 50% stake in a joint venture with Abu Dhabi National Hotels group, reckons Jefferies.
No details were released but Jefferies estimates the consideration to be around £200 million based on previous earnings.
This could reduce net debt/EBITDA by 0.03 times and enhance surplus capital.
In a recent note, Jefferies concluded that Compass could deploy £3.5 billion over the next few years.
Buy with a target price of 2,500p is Jefferies's investment view.