TAP stake on sale valued near €1 billion
An evaluation prepared for ECO values TAP at about five times its 2015 privatisation level, as binding bids from Air France-KLM and Lufthansa are due this week.
An evaluation prepared for ECO values Portugal’s TAP Air Portugal at €1.95 billion to €2.07 billion, implying a price of roughly €972 million to €1.03 billion for the 49.9% stake the state plans to sell. Air France-KLM and Lufthansa are due to submit binding offers this week in a privatisation process closely watched by investors and policymakers.
The valuation by financial analyst Nuno Barradas Esteves puts the airline’s equity value at between €1.9478 billion and €2.0731 billion based on TAP’s first-quarter accounts, using comparable transaction multiples adjusted for expected consolidation synergies.
On that basis, the stake to be sold, including 5% earmarked for employees, would be worth between €972 million and €1.0345 billion. The deadline for binding bids is Wednesday, July 29, and the analyst said a competitive premium of 10% to 20% could lift the value of the 49.9% stake to €1.116 billion-€1.241 billion.
The estimate is about five times the implied value in TAP’s 2015 privatisation. At that time, David Neeleman and Humberto Pedrosa agreed to buy 61% of the airline for €27.5 million and provided shareholder loans equivalent to €203.4 million, implying a total equity value of about €379 million for 100% of the company.
According to the analysis, TAP’s higher valuation reflects a larger and more profitable business as well as a stronger balance sheet. The fleet has grown to 99 aircraft from 61 in 2015, passenger numbers are up 46% and revenue has risen 84%, while EBITDA has increased almost eightfold. TAP also had €765.3 million in cash and €754.5 million in equity ten years later, after receiving about €3.34 billion in state support following the pandemic.
Originally published at Eco.pt
