Is Kathmandu up for sale?

Intelligent Investor

Independent Financial Research

New Zealand retailer Briscoe Group has announced their intention of acquiring travel and adventure retailer Kathmandu… Until the takeover terms have been announced it is unclear what price will be offered to Kathmandu shareholders. It has been reported that the deal will include both cash and Briscoe’s shares. Acquirers typically need to pay a control premium of between 20-30%. If you use the price at open today on the ASX, this would imply a takeover price between $1.85 and $2.00 per share with an average bid price of $1.93. The median P/E ratio for mergers and acquisitions in the retail industry, dating back to the year 2000, is 12.5x earnings. Using the 2014 earnings per share figures as guide, a potential bid at these prices would appear very opportunistic. This is especially so when you consider that the most recent M&A transactions in the retailing industry (four in 2014) had a median P/E ratio of 18 times. Read the full post: (VIEW LINK)


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Intelligent Investor
Independent Financial Research

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