CSPLF - Countryside Partnerships: Material Upside As A Bid Situation Develops

• On 30 May 2022, Inclusive Capital Partners LP announced a non-binding proposal to acquire Countryside Partnerships for 295p per share in cash.
• The approach appears very opportunistic: the UK house building sector has been de-rated and profitability at Countryside is at its low point.
• A raised bid from In-Cap; counter bids from within the UK sector, Private Equity or strategic investors; and/or a staunch bid defense could give material upside to the stock.
• Countryside's EBIT looks set to more than double over the next three years, and the group is scheduled to repurchase over 10% of the equity over the next six months.
• The bid, on depressed multiples and depressed earnings, materially undervalues the group. The stock is worth between 500-600p today, in our view.

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