#None #EHS Investments #CAB Payments #Helios Consortium

EHS Investments Voices Opposition to Helios Consortium's Acquisition Proposal

In a recent public statement, EHS Investments, a shareholder of CAB Payments Holdings plc (LSE: CABP), expressed significant concerns regarding the acquisition offer presented by the Helios Consortium. This group includes various funds that manage investments under the names Helios Investors V, L.P. and others. EHS, holding nearly 1% of CAB Payments, categorically opposes this offer, believing it does not adequately reflect the company's true value.

The Rationale Behind EHS's Opposition

EHS argues that the Helios Consortium's bid undervalues CAB Payments, particularly given the company's strong performance against its strategic goals. The firm highlights that CAB has successfully expanded its network, diversified its revenue streams, streamlined operational costs, and invested in new technologies and customer development. These efforts are evidenced by robust growth across critical metrics, such as the number of active clients and payment volumes. Despite facing currency volatility that has influenced recent results, EHS asserts that CAB Payments is at a pivotal point in its journey, aligning its growth trajectory towards solid financial performance.

EHS anticipates that CAB Payments can achieve adjusted earnings per share (EPS) surpassing 15 pence by 2028, signaling a significant recovery from the decline noted after its initial public offering (IPO) in 2023. They project this growth returns to levels seen in 2022, representing around a 30% compounded annual growth from 2025 levels.

Valuation Comparisons

The proposed acquisition price from the Helios Consortium would value CAB at approximately 5x the projected earnings for 2028, a mark far below comparable companies like Corpay, Inc., and StoneX Group Inc. EHS emphasizes that CAB Payments features a superior EPS growth outlook, and highlights that the valuation reflects a substantial discount not just to its industry peers but also to CAB's historical average valuation since it went public.

Moreover, CAB Payments has embarked on a notable capital return strategy, with EHS estimating the possibility of returning over 25% of the current market capitalization to shareholders in the forthcoming three years. This solidifies CAB's potential as an attractive investment amidst a landscape where few public companies present such robust high growth and capital return at a low price-to-earnings (P/E) ratio.

A Call to Action for Shareholders

EHS expresses deep concern regarding the Helios Consortium's approach, highlighting the troubling nature of its strategy which seems to dismiss any support for a competing, higher offer from StoneX. This has raised alarm bells about long-term investor confidence in UK capital markets.

EHS Investments firmly believes that CAB Payments has significant value creation potential on the horizon. Rather than accepting the undervaluation posed by the Helios offer, they urge fellow shareholders to consider the long-term prospects of investing in CAB Payments, advocating for a strategy that would allow them to partake in the recovery and growth the company is poised to achieve.

In summary, the stance taken by EHS reflects a strategic vision for CAB Payments that aligns with their growth trajectory and financial recovery. By voicing their opposition, EHS Investments aims to rally support from stakeholders to reject the undervalued offer and seek a pathway that capitalizes on CAB's potential success in the future.