Investment bank Jefferies has concurred with TI Fluid Systems PLC (LSE:TIFS)’s rejection of a 176p per share offer tabled by ABC Technologies..
According to Jefferies, the offer, while representing a 29% premium to Thursday’s closing price, is not sufficiently attractive.
This is certainly not a knockout offer, in our view, despite ongoing industry uncertainty and volatility,” said analysts at the bank.
Jefferies noted that the offer is equivalent to 5.6x EBITA and 6.1x forward price to earnings, which is below the auto supplier peer group averages of 6.5x and 6.2x, respectively.
Jefferies also pointed out that the offer falls short of its 12-month target price of 185p per share, which analysts believe better reflects the company’s value, particularly when considering potential synergies.
"Despite the highly challenging backdrop for suppliers, we are more positive on TIFS than we have been while covering the stock – the group has seen strong operational and strategic momentum as of late (and should benefit further from the wider shift to hybrids)," said Jefferies.