The cash offer of 297p a share values Zetar at £42.7m, a 9 per cent discount to the company’s last reported net asset value of £47m and equates to a take-out price of 7.5 times analysts' EPS estimates of between 39p and 41p for the financial year to April 2013. This may seem on the low side, but it is at the mid-point between Liberum Capital’s 275p a share sum-of-the-parts valuation and Merchant Securities' 324p a share fair value target. Moreover, Zetar has warned on profits twice this year although recent trading indicates the business is on course for a strong earnings recovery in the current financial year.
Shareholders will also receive a final dividend of 3p a share payable on 2 November ahead of the general meeting on around 9 November to approve the scheme of arrangement. So far investors controlling 42.2 per cent of Zetar’s issued share capital have already indicated they will accept the bid including an aggregate 13.6 per cent held by the management team.
