Edison Investment Research Limited Electra Private Equity (ELTA): Innovating, restructuring and realising 17-Dec-2020 / 08:50 GMT/BST
London, UK, 17 December 2020
Electra Private Equity (ELTA): Innovating, restructuring and realising
Electra Private Equity (ELTA) has been following a realisation strategy since October 2016, when it had a market cap of c £1.7bn, and has since returned £2bn to shareholders. Despite this strong record, the shares currently trade at a 22% discount to NAV. In 2018, the board embarked on a major operational enhancement programme across the remaining three key portfolio assets: TGI Fridays, Hotter and Sentinel, installing new management teams in 2019. ELTA's team has identified significant earnings potential from operational initiatives, which on applying peer and sector multiples translates into significant valuation upside of up to 175% above the current NAV. ELTA is well placed to realise the remaining assets in 2021 and generate attractive shareholder returns before the company's subsequent wind up.
ELTA's shares trade at a c 22% discount to the last-reported NAV per share of 353.4p. The average last three years' discount of c 39% reflects the realisation strategy and restructuring efforts around realisation of the remaining three key companies, up until the management at all three was changed in 2019. The discount has recently narrowed materially, after the company confirmed the engagement of Stifel Nicolaus Europe in the sale of Hotter on 13 November 2020.
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