Value play or value trap?

Finweek English Edition - - Marketplace -

Group Five re­jected the R1.6bn cash of­fer from Green­bay Prop­er­ties for Group Five’s Euro­pean con­ces­sion stakes, Bul­gar­ian as­sets and In­ter­toll Europe op­er­a­tions. The rea­son be­hind the re­jec­tion was that the week given by Green­bay to ac­cept the deal was not enough time to do a fair value as­sess­ment of the Euro­pean as­sets, al­though sug­ges­tions are that R2bn is closer to fair value. It is in­ter­est­ing to note that at the time of the of­fer, the mar­ket cap of Group Five was around R1bn. So Green­bay val­ues these Euro­pean as­sets at more than the value of the en­tire com­pany, plac­ing a neg­a­tive value on the other as­sets. So is the mar­ket very wrong or are these Euro­pean as­sets the only value in Group Five? Value play or value trap? It’s hard to tell in large part be­cause the group is loss-mak­ing with a num­ber of is­sues out­stand­ing (such as Ghana). But the ad­ven­tur­ous may want to try a small po­si­tion here, bet­ting that the new board can un­lock some value.

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