Following a Bloomberg report on Thursday that Bunge Limited (NYSE:) and Viterra are in potential merger talks, BMO Capital said the deal appears to be a more likely outcome than Glencore (OTC:) acquiring/spinning off BG.
The company said in a note that Viterra appears to be a strategic asset for BG.
“Accounting differences complicate the financial implications, although we think an 8-10x EBITDA multiple seems reasonable buyout value for Viterra, and we wouldn’t be surprised if BG acquiring Glencore’s stake could be accretive. by more than 5%,” the company wrote.
Additionally, BMO Capital analysts said that while they might have expected BG to pursue smaller acquisitions, they believe a transaction between the two parties would be consistent with recent messaging to the community. investors. They noted that Viterra had been one of the top assets speculated as an acquisition target by investors in recent weeks.