Elementis (ELM) 137p
Gain to date: 8.8%
Original entry point: Buy at 125.9p, 18 February 2021
Reports that chemicals group Elementis (ELM) had been the subject of a takeover deal that could value it at over 200p per share proved unfounded.
Late on 20 April its US-listed rival Innospec revealed it had made a cash and shares bid of 160p but that this offer had been rebuffed and a deal was no longer under active consideration.
Analysts at Jefferies say that while they ‘expect the market to be disappointed by this news, the ongoing takeover interest in Elementis implies that its shares have been cheap’.
These latest developments came after Elementis rejected three takeover bids last year from another US firm, Mineral Technologies, the highest of which valued Elementis at 130p per share.
The stock is still trading significantly below the 200p mark, which is the level at which the company has long since argued it should be valued, and we think shareholders should be patient until the shares reach this level.
SHARES SAYS: We still think there is considerable unrealised value in Elementis.
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