NCK went into a trading halt on Wednesday as the company sought to raise $60m at $13.25, a 5.8% discount to its last trade, to fund its expansion plans into the UK. NCK is buying Fabb Furniture, which owns 21 stores and retail parks across the UK. We like this relatively cheap foray into the $24bn UK furniture business by a quality operator. The timing looks good with the UK furniture market struggling, and the deal is undoubtedly compelling, with NCK picking an established network for a nominal amount. However, considering recent inflation data, the raise is at a bull market discount. We wouldn’t be chasing strength in the current market, as it will also take time to see how successfully NCK can rebrand Fabb Furniture.
- We are fans of NCK and like the risk/reward back around $13.
MM is bullish towards NCK
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