News blog
First Artist Corporation
- BY: Andrew Hore |
- POSTED: 15/05/2008 |
First Artist has received an approach for the Dewynters theatre marketing business.
This is a core business for the group and its cost around £16m at the end of 2006. There is speculation that the offer could be for more than the buying price.
There is also talk of potential buyers for First Artist’s wealth management division.
According to Daniel Stewart the sum of the parts valuation for First Artist is 120p a share. That assumes that Dewynters is worth around £20m, which would more than wipe out the net debt of £11.9m at the interim stage. However, Daniel Stewart has a target price of 194p a share, which is based on 10 times forecast earnings.
The shares are trading at 66p, up 3p on the day.
Although a sale of Dewynters would bring in a significant amount of cash it could reduce the attraction of the company to investors. The sport division would be a significant proportion of the business again, whereas management has been trying to reduce the company’s dependence in that area. The events business is growing and will become increasingly important to the group.
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