As Worldline launches its 392 million euro rights issue, Invest Securities is advising against participation, recommending instead that investors sell their rights. The firm has also slashed its price target from 0.90 EUR to 0.22 EUR to account for the significant dilution resulting from the operation.
"While the total amount comes as no surprise, the subscription price is excessively low (0.202 EUR, representing an 87% discount to the last closing price), which will lead to massive dilution far exceeding our estimates (2,262 million shares post-transaction versus the 730 million expected)," the firm warned.
"This pricing essentially forces current shareholders to subscribe, yet we struggle to find any appeal in the deal," the analyst continued, though noting that Worldline is strengthening its shareholder base through the participation of Crédit Mutuel, which is subscribing to the rights previously held by SIX.
Worldline is one of the world's leading providers of electronic payment and transactional services. Net sales break down by activity as follows:
- merchant services (80.3%): this division enables merchants to increase their sales and improve their customers' experience in a secure and trusted environment, with exceptional expertise and pan-European coverage;
- financial services (19.7%): this division, leader in Europe, provides financial data processing and enables financial institutions to deploy transformative technologies, manage risk and fraud, optimize processes and ensure operational excellence.
Net sales are distributed geographically as follows: France (6.1%), Southern Europe (16.5%), Central and Eastern Europe (36.6%), Northern Europe (29.7%) and other (11.1%).
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