Experts at an historic investment bank have weighed in on whether a proposed £83m takeover of the Christmas savings group founded by former Everton FC and Tranmere Rovers owner Peter Johnson will succeed.
Shares in Appreciate Group surged from 26p to 41p when the deal with PayPoint was first announced on November 7 and have stayed around that mark ever since.
The Liverpool-headquartered group's brands include Love2shop, highstreetvounchers.com, Park Christmas Savings and Appreciate Business Services and is listed on AIM.
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Appreciate was known as Park Group until 2019. It was best known for its Christmas hampers but has long diversified into a wider range of savings products.
Now experts at Panmure Gordon have had their say on whether they think the deal will succeed or if a rival bid could emerge.
The firm said: "There is a case for Appreciate remaining independent.
"We initiated with a buy because we believed that there was a recovery opportunity from the pandemic and in the medium term we expected structural growth, especially from market share gains, a focus on card and digital products and a structural shift to gifting.
"Since we initiated, traded has been in line, or better than expected.
"Appreciate was heavily impacted by Covid given that lockdown closed venues where redemption products could be used."
However, the firm added: "That said, we can see a number of reasons why Appreciate's investors could accept the offer.
"At 43p, the offer represents a 66% premium to the pre-offer price, making it the best performing share of our Support Services coverage this year and we think the share price would probably decline if the offer lapsed.
"Appreciate's share price had last been at 43p in April 2020, pre the full impact of the pandemic."
Panmure Gordon also said that PayPoint's offer for Appreciate has "commercial logic" following a partnership in May 2021 which saw the group offering some of its products through PayPoint's network.
On whether a rival bid could emerge, the firm added: "Appreciate's share price at 42p is just below the value of the offer of 42p which to us suggests that the market believes that there will not be a counter offer and we agree.
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