KSL – Morgans rates the stock as Add

Kina Securities announced an agreement to acquire Westpac Bank’s ((WBC)) businesses in the Pacific (PNG and Fiji) for $420m. This will make Kina Securities the third largest bank in Fiji.

Morgans views the acquisition as highly complimentary and adding significant scale and reach to the company’s operations, infrastructure and product offering.

The broker estimates the deal is around 14% EPS accretive from FY22, before considering synergies.

The Add rating is unchanged and the target price is increased to $1.55 from $1.42.

Sector: Diversified Financials.

Target price is $1.55.Current Price is $0.83. Difference: $0.72 – (brackets indicate current price is over target). If KSL meets the Morgans target it will return approximately 46% (excluding dividends, fees and charges – negative figures indicate an expected loss).

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