A newly incorporated joint venture will hold the Westbourne Park London bus operations and Sealink Travel will hold a 12.5% interest in the JV - RATP Dev London Transit (RDLT). This will operate on a stand-alone basis and Sealink will have no obligation to contribute further capital.
Macquarie reiterates a Neutral rating, believing the joint venture will allow the business to retain some resources in London to pursue organic growth while income from leasing Westbourne Park to the JV will support overheads. Target is steady at $8.80.
Sector: Consumer Services.
Target price is $8.80.Current Price is $8.89. Difference: ($0.09) - (brackets indicate current price is over target). If SLK meets the Macquarie target it will return approximately -1% (excluding dividends, fees and charges - negative figures indicate an expected loss).
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