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Numericable Valuation Justified on Possible M&A Boost, Citi Says 2014-01-22 08:33:02.210 GMT
By Blanche Gatt Jan. 22 (Bloomberg) -- Numericable is “strategic asset” in a mkt that needs consolidation, Citi says in note; initiates coverage with neutral rating, PT EU29.5. * Citi says co.’s premium valuation at 10x est. 2014 EV/adj. Ebitda, 23.1x est. 2014 EV/OpFCF is justified given est. 60% probability of merger with SFR, with SFR spin-off in 1H as catalyst * Sees potential cost savings upside of EU2.8b, post integration costs, from any merger between SFR and Numericable * Says as standalone business Numericable offers limited growth with not much scope for price increases amid “fierce” competition * Shares up 0.8% today; up 10% since start of Jan., up 17% since IPO on Nov. 8 * Stock has 10 holds, 1 sell; avg. PT EU28.3 implies downside of 2.3%: data compiled by Bloomberg * NOTE Jan. 21: Vivendi Is Said to Explore Sale of SFR to Numericable Owner * Jan. 21: Vivendi’s Potential SFR Unit Sale Report Raises Hopes: Liberum
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--Editor: James Cone
To contact the reporter on this story: Blanche Gatt in London at +44-20-7392-0351 or bgatt@bloomberg.net
To contact the editor responsible for this story: James Ludden at +44-20-7673-2645 or jludden@bloomberg.net