On Friday, Deutsche Bank adjusted its outlook on Neoen SA (NEOEN:FP) (OTC: NOSPF), a French renewable energy company, by increasing the stock price target to EUR39.85 from the previous EUR30.00, while keeping a Hold rating on the stock. The revision follows news that Brookfield is in exclusive talks to purchase a majority stake in Neoen.
The potential acquisition involves Brookfield aiming to buy 53.32% of Neoen's shares at a price of EUR39.85 per share. This offer represents a 26.9% premium over Neoen's last closing price before the announcement. The acquisition is contingent on the successful negotiation and purchase of the major shareholders' stakes.
If Brookfield succeeds in acquiring the significant block of shares, the company plans to extend an all-cash mandatory offer to acquire the remaining shares of Neoen. The intention is to eventually buy out all other shareholders and potentially remove Neoen from the stock exchange in a process known as a squeeze-out.
The stock price target increase by Deutsche Bank reflects the premium offered by Brookfield in its acquisition proposal. The proposed price is aligned with the new target set by the bank, indicating a valuation uplift for Neoen based on the acquisition terms.
The acquisition deal is still subject to the successful closing of the negotiations with Neoen's major shareholders. If the deal proceeds as planned, Brookfield's all-cash offer will be presented to all remaining shareholders of Neoen, with the aim of taking full control of the company.
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