13th Aug 2021 14:24
(Alliance News) - Pets At Home Group PLC shares could be pushed higher after peer Zooplus AG agreed a EUR2.79 billion takeover, according to Shore Capital.
Zooplus, a pet supplies retailer based in Munich, on Friday said it accepted the EUR390-per-share offer from Hellman & Friedman, a San Francisco-based private equity firm. The bid is a 40% premium to Zooplus's closing price on Thursday.
Shares in Handforth, Cheshire-based peer Pets At Home were up 1.6% to 479.60 pence in London on Friday afternoon. They're up 15% year-to-date.
The Zooplus deal suggests Pets At Home shares have room to rise further, Shore's Eleonora Dani and Clive Black wrote in a note.
The transaction values Zooplus, an online-only retailer, at 87 times estimated earnings in 2022, versus Pets At Home's valuation of 22 times, the analysts said.
What's more, Pets At Home has both in-store and online operations, and "can count on the structural pets population's expansion to support future growth, unlike other Covid-winners."
Pets At Home has "all the right tools to create a more tailored offer for pet owners" and close the personalisation gap with rivals Tails.com and Barking Heads, the analysts added. The stock rating is under review because of an analyst change, with a price target of 472p.
By Ivan Edwards; [email protected]
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