Who will buy Nexi?
What happened to Nexi stock on the stock market and why. Facts, numbers and comments
All eyes on Nexi on the stock market. Here's how and why.
RUMORS ABOUT NEXI AND STOCK STOCK PERFORMANCE
Nexi, an Italian PayTech company which is part of the Ftse Mib, slows down its run on Piazza Affari after the initial outburst, in the wake of clarifications regarding the interest of the private equity company CVc Capital Partners. CVC considers Nexi one of the possible targets to take into consideration, but is not preparing an offer, Reuters wrote, citing a source close to CVC, after Bloomberg wrote last night that the fund was evaluating a possible offer on the Italian payments company . According to the source cited by Reuters , there have been no contacts between CVC and Nexi on a possible purchase proposal. At 3pm the Nexi stock recorded an increase of 13%.
WHAT HAPPENED TO NEXI ON THE STOCK STOCK
At the beginning of the session there was in fact a strong current of purchases on Nexi in Piazza Affari after the hypothesis launched by Bloomberg of an interest on the part of CVC Capital Partners: the payments company's stock failed to reach a price of entry into trading and rose by a theoretical 19%. According to the agency, the fund is starting to consider a potential offer for Nexi, which does not comment on the hypothesis. Bloomberg recalls that the funds have been analyzing the sector for some time and the Italian company itself, whose shares have fallen by 22% in the year, with possible buyers who could also come together for a joint offer on the group, Ansa remarked .
ANSA'S POINT AFTER HAVING HEARD WITH THE ANALYSTS
The interest of private equity in Nexi is certainly good for a depressed stock but a paytech operation would be "complex" as the current shareholders would be unlikely to be willing to exit at the current valuations, without considering the possible exercise of golden power by the government and the burden of high debt in a high interest rate environment. These are some of the assessments expressed – according to a reconstruction by Ansa – by the financial shareholders on Nexi, the subject of CVC's interest.
MEDIOBANCA'S ANALYSIS ON NEXI AND THE VALUE OF NEXI FOR CDP
“In light of the current low valuations and growing cash flows, we are not surprised to see private equity interested in Nexi,” says Mediobanca, who recalls that the consensus of analysts indicates an average target price of 9.8 euros per share for Nexi compared to yesterday's closing of 5.76 euros. “On the other hand, the operation could be complex as the current shareholders (including current private equity) would aim to maximize their investment while CVC would also have to consider the position of CDP (whose share of approximately 13.5% has a book value of 2.23 billion euros compared to the 2.249 billion indicated in the 2002 budget) and of the government (with the golden power).
WHAT MILANO FINANZA WRITES
The stock has a high leverage effect, observes the analyst, we read on Mf/Milano Finanza , «but the cost of debt is very low (less than 3%) and the generation of cash flows is enormous (it will produce over 2 billion euros of liquidity in the next 3 years)". The company is growing and now (before the alleged offer) «it is trading at less than 9 times the expected earnings in 2024. What is really interesting is the shareholder structure, the majority is made up of private equity funds that have purchased the shares in different periods and at different prices." There are 2 points that must be taken into consideration, according to the brokers: «First: to make an offer, CVC must reach an agreement with CDP. Second: to satisfy all the private equity funds involved, CVC must pay a very high premium."
NEXI SHAREHOLDERS
Nexi 's shareholders, Equita also recalls, include the private equity firms Hellman&Friedman, Bain and Advent which, through various vehicles, own approximately 40% of the capital, Cassa Depositi e Prestiti which holds 14%, Poste 4% and the free float is slightly above 40%. The news has «positive implications for Nexi given the valuation gap between the current multiples and those of M&A and also considering that the private equity funds that entered the Nexi shareholding structure through the contribution of Nets (and which today have 30% of capital) could require a significant premium to exit given that they have a high entry price", concludes Equita in the Mf/Milano Finanza point.
AKROS' COMMENT
Finally, for Akros, "Nexi's depressed valuations may attract takeover offers" but "the weight of the company's net debt, equal to 5.4 billion euros or more than 3 times the ebitda, represents the main obstacle in the current economic context" of rates at the highest levels for decades, we read in Mf/Milano Finanza .
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/chi-comprera-nexi/ on Wed, 18 Oct 2023 14:05:01 +0000.