Yesterday, Metcash (MTS) confirmed its bid for Quadrant’s Superior Food Group, which supplies packaging and cleaning products to restaurants, cafes, etc. Although no official announcement has yet been made, the company is a long-standing target of MTS, with a likely purchase price of ~$500mn. Speculation has been around the funding of the purchase, with many expecting a capital raise should the deal progress – the stock is currently in a trading halt at the request of MTS as discussions between the two entities progress. At this stage, MTS has several alternatives from a funding perspective, but if they do undergo a discounted equity raise as part of a wider funding package, it could provide an opportunity in the stock.
- We have been eyeing MTS for our Active Growth Portfolio over recent months, and this deal could provide an entry opportunity – we already hold MTS in our Active Income Portfolio.
MM is long and bullish MTS
Add To Hit List
