SNC-Lavalin faces takeover risk due to depressed valuation, analysts say
13 OCT 2018
SNC-Lavalin Group [TSX: SNC], the Montreal, Quebec-based construction and engineering firm, risks becoming a takeout candidate if its share price continues to slump, said analysts in a report from The Globe and Mail on 12 October.
AltaCorp analyst Chris Murray said in a research note cited in the report that a recent development, which saw Public Prosecution Service of Canada say that it won't invite SNC to work out a settlement that could have ultimately stayed charges of fraud and corruption, means that the company's shares could face "persistent undervaluation." He added that such a scenario could make SNC a takeover target. Murray added in the report, however, that there's still a chance that SNC could still secure a negotiated settlement.
According to the report, Canaccord Genuity analyst Yuri Lynk said in a recent research note that SNC's management and board of directors should be considering options like privatization or a corporate sale given its valuation problem.
SNC's market cap is CAD 7.79bn.