There is a bid on the table for salary packaging & novated leasing business SIQ which is an all-cash offer at $10.35 per share from a consortium led by TPG. While the deal is non-binding for now, they have been granted exclusive due diligence and the board will unanimously recommend the offer if DD comes out as expected. The stock is trading at $9.40 pricing in the chance that they’ll walk away, however we think that’s unlikely. The group has been in talks with the SIQ board for some time, the offer price here is a very good one for SIQ and that reduces the chance of other bidders joining the fray. Or put another way, the bidders have already had a chance to look at the business, they like it and they’ve offered a very full price to avoid competition, so in our view the bid is a strong chance of proceeding.
If successful, the deal values SIQ on an EV/EBITDA multiple of 14.2 times which is high, and MM would be a happy seller at that price.
MM remains long and bullish SIQ
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