3i Group PLC (LSE:III) successfully increased its core stake in retail business Action following a new share issuance and saw its forecasts updated by Deutsche Bank.
The investment firm traded steadily at 2,822p as the broker maintained a 'buy' rating and raised its target price from 3,527p to 3,570p.
At the heart of the latest update is a direct transaction where the group issued 21 million new shares at a net asset value of £31.30.
That specific issuance secures an additional 1.8% equity stake in Action, reflecting an existing investor’s desire to increase the liquidity of their holding.
Crucially, those newly issued shares are subject to a standard nine-month lock-up agreement.
The £660 million value of the new issuance largely offsets the share count reduction expected from a £750 million share buyback.
Because the active buyback operates below net asset value while new shares were issued precisely at net asset value, analysts infer immediate value creation.
In the same note, the broker highlighted that net asset value is unchanged despite a higher absolute amount driven by increased ownership on a larger share count.
Updating its financial models, the bank raised its forecast for Action's financial year 2026 comparable sales growth from 3.5% to 4.3%.
That shift coincides with the expected new space contribution falling to 9.4%, while overall EBITDA is projected to increase by 2% to €2,703 million.
Looking beyond these immediate operational revisions, the analysts concluded that only very limited changes were applied to the outer-year forecasts within the wider valuation model.
