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Authoritative Independent Monthly Share Selections Using Technical & Fundamental Analysis

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Scapa - Receives bid approach

March 2021

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

  • Epic Code:
  • SCPA
  • Price:
  • 223p
The shares leapt to 228p after Scapa received a recommended cash offer worth 210p a share from Schweitzer-Mauduit, a leading performance materials company. The offer implies 13.8x enterprise value / EBITDA for the year ended March and is pitched at an 18.6% premium to the previous day’s close of 177p. That looks mean to us, particularly as Scapa’s healthcare side is starting to recover from a low base as the vaccine roll-out will encourage patients to return to hospitals for delayed procedures. Management and various funds speaking for c. 16% have pledged their support but that’s not enough to prevent a counter offer, given that the deal is structured as a scheme of arrangement and needs 75% suppor ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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