DP Eurasia bidders take bigger slice

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Jubilant Foodworks, the company that owns the rights to operate the Domino’s Pizza brand across India, Nepal, Bangladesh and Sri Lanka, has had its eye on DP Eurasia for a while. 

DP Eurasia owns franchises for Domino’s in Azerbaijan, Georgia and Turkey, but announced its intention to file for bankruptcy in Russia in August. Sanctions following Russia’s invasion of Ukraine last year had hit operations and it was unable to sell the Russian arm as a going concern. Half-year results to June show it was more adept at handling rampant inflation in Turkey, though — total pre-tax profit from continuing operations increased by 13 per cent to 242mn Turkish lira (£6.6mn), more than offsetting a 178mn lira loss from the discontinued Russian business. 

Jubilant, which is listed on the Bombay Stock Exchange but is part of brothers Shyam and Hari Bhartia’s Jubilant Bhartia conglomerate, first bought a 33 per cent stake in DP Eurasia in February 2021 from Turkish private equity firm Turkven. 

The brothers, who gained seats on the DP Eurasia board, then attempted to increase the size of their holding to just below 50 per cent through a reverse bookbuild, but only managed to secure about 40 per cent.

Despite DP Eurasia’s struggles, their interest has not waned and further buying took their holding above a 50 per cent threshold that triggered a mandatory offer to minority shareholders on November 28. Jubilant made an offer of 85p a share, a 24 per cent premium on the previous day’s closing price. 

DP Eurasia’s board was unimpressed, arguing the “unsolicited and opportunistic” bid undervalues the company. However, Jubilant argued that a re-rating of DP Eurasia’s shares was unlikely given investors’ concerns about geopolitical and currency risks. It said the company “would benefit from returning to private ownership with the support of a long-term investor”.

Face-to-face meetings boost Inform

The renewed enthusiasm for face-to-face networking at big events after long periods of pandemic-related lockdowns is providing tailwinds for Informa, the events and specialist data company.

Last month, the company reported underlying revenue growth of 31.7 per cent for the first 10 months of the year and upgraded both its top- and bottom-line guidance for 2023. 

Its adjusted operating profit should top £840mn, which will be around 70 per cent higher than last year’s figure. 

Its fastest-growing division was Informa Markets, the arm that hosts B2B trade shows ranging from beauty fairs in China to concrete conferences in Las Vegas.

“Your Teams calls or your Zoom calls have brought into a sharper focus the value of high-quality professional face-to-face interaction,” chief financial officer Gareth Wright told investors.

Little wonder, then, that the company’s share price has continued its strong upward trajectory, gaining 25 per cent this year.

How much further it can go is a matter of debate. According to FactSet, the shares still trade below both their five-year average and peer group valuations. Analysts’ views are mixed, though — Berenberg, HSBC and Shore Capital rate the shares as a buy, whereas Investec and UBS do n’ot see much more upside from their current rating. And although Wright said he was “pleased” with the amount of show bookings for next year, trade shows are a cyclical business. 

Either way, the gains made so far have provided the opportunity for longstanding chief executive Stephen Carter and chief operating officer Patrick Martell to sell off chunks of their holdings to “cover personal financial obligations”. Carter, who has been running the company for more than a decade, sold £3mn worth of shares and Martell over £600,000 worth. Both “continue to hold shares comfortably above their holding requirements “, the company said.