Good Deal
RWC announcement this morning they have entered into a Process Deed with Brookfield for the sale of 100% of their shares at $4.75, is a good deal in my view.
Using their underlying EPS in FY26 released today of 16.5c results in an implied PE of 28 or using their underlying FY25 EPS of 19c results in an implied PE of 25. Looking at the line chart above of RWC’s average PE range both these are at the high end of their range for the past 6-years.
I hold RWC in the ASX300 paper portfolio and will sell on the bounce today all things being equal and if the deal falls over I will by back in as their share price falls again.
There will be a few regulator issues to get through here and in the US, which is where the bulk of their earnings come from now. So I don’t think this is as straightforward a deal as it looks and could possibly fall over. There is also the risk that other bidders come into the market and pushes the price higher.
But as the saying goes a bird in the bush is worth two in the hand.
Disclaimer: Rational Share Investing With Ratios does not hold an AFSL and information on this site should not be considered financial advice, personal or general, and represents the views of the author.
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