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MFGP - Micro Focus International: A High Beta Recovery Play
Micro Focus Intl PLC ADS each representing One Ord Sh
Summary
I believe there is a potential opportunity with Micro Focus (MFGP) to enter on the long side for a cheap price. Share price has suffered steep declines of >80% in the last two years, tremendous value destruction since the takeover of Hewlett Packard's (HPE) software business.
The valuation exercise estimates value to be around 570-637 (sensitising with PGR), which represents a 35%-52% upside to current trading levels.
Additionally, I see this as a potential take private opportunity by a well-capitalised financial sponsor with a strong expertise in restructuring/distressed assets.