The big equity event in the markets yesterday was Wesfarmers sale of its insurance businesses to AJG in the US
The big equity event in the markets yesterday was Wesfarmers sale of its insurance businesses to AJG in the US. The market responded positively to the news with Wesfarmers stock trading up 1.2% at the close of trade. The market reaction is likely to be a favourable response to the capital inflow that will result for Wesfarmers. Market attention will now focus on how WES will deploy the funds. Rob Taubman, Equity Sales at UBS, says that there are two possible outcomes being an acquisition or a capital return or buyback both of which would be accretive at current levels. However, Taubman notes UBS currently have a valuation of $42.80 on Wesfarmers which is only marginally above yesterdays closing price of $42.08. Their preferred pick is Woolworths, we note the recent article from Altair on WOW vs WES - there is a market out there.
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