Veidekke (Hold, TP: NOK125.00) - Taking the offer on the table
Veidekke announced on 16 June that it had sold its Property division to a consortium of investors for NOK7.7bn, thus concluding the IPO/sale process it initiated in November 2019. The sale value was only 2.5% below our forecast. We expect an extraordinary dividend of NOK20/share related to the sale plus the proposed 2019 DPS of NOK5 that was held back due to Covid-19 to be paid to investors in late 2020. We have reduced our forecasts to reflect the sale of the operations. We have raised our target price to NOK125 (100), but given the recent share price rally, we have downgraded the stock to HOLD (BUY).Veidekke is a Scandinavian construction and property development company. Co.'s segments are grouped according to activity. The construction segment comprises mainly the construction of buildings and infrastructure. The property segment comprises the development of sites, property development and the sale of property (primarily residential). The industry segment comprises the production of aggregates (crushed stone and gravel) and asphalt, the laying of asphalt and road maintenance.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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