Broker snap: Counter offers for Aegis unlikely, says Investec

12th Jul 2012 09:49

Investec has hiked its target price for media and digital communications group Aegis from 195p to 240p to fall in line with the offer price by Japanese advertising agency Dentsu.Dentsu is offering 240p in cash for each Aegis share, a 50% premium on the day before the agreed bid announced. The offer terms value the whole of Aegis at around £3.16bn. "Dentsu's proposed agreed bid at 240p for Aegis looks a very full price in our view and we think rival agencies are unlikely to counter bid," Investec analyst Steve Liechti.The broker maintained its 'buy' recommendation on the stock today.Liechti said that the price reflect Aegis's position as "one of the last remaining mid-size agency groups, but with enough critical mass to make a difference to the likes of Dentsu. It also reflects AGS' strong business momentum, simplified structure and digital assets."The broker said that the read-across to WPP (labelled as a 'hold') looks relatively limited as it is unlikely to be a bid target and unlikely to counter a bid against such a materially rich implied valuation, "though agency sentiment may improve slightly".The offer sent the share price soaring on Thursday morning and by 10:04, the stock was trading 45.51% higher at 236.02p.BC