Viewed yet another way, here is a mechanism that I believe re-rates the entire WES grouping of businesses to at least 10x EV/EBITDA.
On that basis it implies at least a $49 share price:
FY2019 EBITDA = $5.8bn (forecast)
EV/EBITDA multiple = 10.0x
=> EV = $58.0bn
Less Net Debt = $2.0bn
=> Equity Value = $56bn
Shares on Issue = 1.134bn
=> Value per share = $49.30
Value for differing EV/EBITDA multiples:
10.5x = $51.90 (probable, in my view)
11.0x = $54.40 (quite possible)
11.5x = $56.90
12.0x = $59.50 (extreme bull case; not likely, but remotely possible)
Either way, based on the above I think there is still a lot of upside to the share price in coming weeks/months.
Ann: Intention to demerge Coles - Briefing Presentation, page-26
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