The Webjet Limited (ASX: WEB) share price is currently flying higher than the rest of the ASX, it’s up almost 10%.
I have regularly been writing over the past few months that I thought Webjet looked very good value considering all of the growth that it’s generating.
Now it seems that investment bankers and private equity think the same thing.
According to reporting by the Australian Financial Review, Goldman Sachs is drumming up interest in Webjet and pitching it to private equity firms that have the financial firepower to afford a takeover. The figure touted is around $2 billion.
The AFR speculated that Goldman Sachs is seeking out interest with Webjet’s blessing. Other online businesses have been taken over after involvement by Goldman Sachs including Menulog, Trade Me and Wotif.com.
Of course, Webjet put out a statement that didn’t really confirm or deny anything. It said that it:
“Notes recent media speculation in relation to expressions of interest in the company. The company’s objective is to create value for its shareholders and from time to time we consider acquisition interest in the business.
“Should a proposal be received that was compelling and certain, the company would put it to shareholders. No such proposal exists at present. Webjet continues to be focussed on executing its growth strategy, as articulated at the recent AGM in November.”
Even after today’s rise, it’s still only priced at 14x FY21’s estimated earnings. I’d be happy to buy today, even if it meant I was only a shareholder for a relatively short time if a takeover offer came in.
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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Webjet Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.