Credit Suisse: “A huge premium”
The Swiss lender focuses on how much Coca-Cola is paying over Costa Coffee’s public-market valuation.
“A huge premium to that implied by the market: We valued Costa at £2.5bn in our 5280p SOTP based on a 10x 2019E EBITDA multiple,” a team of analysts led by Tim Ramskill wrote.
“The disposal price of £3.8bn (after transaction costs) implies a 15.7x multiple. We estimate the current share price was discounting a multiple of 8.0x and therefore the deal adds £2.0bn of value or 1075p per share compared to the close price.”
In Credit Suisse’s view, the deal is essentially twice as costly as it perhaps should have been.