Nine Entertainment (NEC) and Southern Cross Electrical (SXE)

Hi Libby,

For subscribers no familiar with the deal, CoStar Group (GSGP US), a U.S.-based real estate information and analytics firm, has made a “Best & Final” bid for Domain Holdings Australia (DHG), the property listings platform in which NEC holds a 60% stake. CoStar’s revised offer stands at $4.43 per share, valuing Domain at approximately A$2.79 billion. NEC has expressed support for Domain’s decision to engage with CoStar regarding this proposal.

• If the acquisition proceeds, NEC is expected to receive about A$1.4 billion in cash proceeds after taxes, which in this environment, would seems attractive.

That much cash on NEC’s balance sheet in an environment like we’re in would be very attractive and would likely lead of a substantial capital return. NEC has held up better than the market, while volatility such as this can often lead to companies pulling bids. We are leaning on the side of cashing in our chips, to free up capital to take advantage of the litany of opportunities now presenting themselves.

As for SXE it has corrected recently in line with the market plus this month it completed the purchase of Force Fire Holdings, a fire safety solutions provider operating in NSW and QLD. The acquisition aligns with SCE’s strategy to enhance its capabilities in infrastructure, data centers, and electrification sectors. The deal includes an upfront cash payment of $36.3 million, with additional deferred and contingent payments based on future earnings performance, bringing the total potential consideration to $53.5 million.  It is an accretive acquisition that should prove to be positive for SXE over time. 

• We like SXE in the $1.40-$1.60 area, not far now.

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Southern Cross Electrical Engineering Ltd (SXE)

LAST UPDATED 04/04/2025 15:28

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Southern Cross Electrical Engineering Ltd (SXE)

LAST UPDATED 04/04/2025 15:28