RECTICEL: Greiner knocking on the door REC BB

The Austrian group Greiner, a former joint venture partner of Recticel and also an Engineered Foams competitor, has agreed to take over Bois Sauvage’s 27.03% stake in Recticel at € 13.5 per share and seeks to enter into discussion with Recticel’s board about a public offer (at the same price). We believe Recticel will not be able to avoid that Greiner becomes an important shareholder but we do not expect the Board to support an offer at € 13.5, as this price lacks any control premium and does not take into account the synergies potential Greiner would get from a combination. We have decided to slightly up the multiples used in our SOTP valuation for Engineered Foams and Insulation and arrive at a new target price of € 15 (up from € 14). We maintain our Accumulate rating and still appreciate Recticel for the ongoing transformation, which is leading to a higher margin group with significantly increased free cash flow generation potential. Moreover, the insulation activities provide Recticel with an attractive ESG profile.