AJ Bell argues that the setback in Experian’s (LON:EXPN) proposed acquisition of rival ClearScore is a setback but not a disaster, Citywire reports. The comments came after the Competition and Markets Authority (CMA) said yesterday that it had found that the tie-up could substantially reduce competition.
Experian’s share price has jumped in London in today’s session, having added 1.30 percent to 1,909.00p as of 10:31 GMT. The stock is outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.61 percent higher at 7,047.38p.
AJ Bell weighs in on deal setback
Citywire quoted AJ Bell analyst Russ Mould as commenting yesterday that Experian might “now be regretting its decision not to offer proposals to address” any of the CMA’s concerns, with its failure to do so “the catalyst for the CMA to launch this more in-depth probe”.
The analyst, however, noted that the blue-chip credit checking company was not reliant on the merger for growth and “as such, if the deal were to fall apart it would probably represent a disappointment rather than a disaster for the company”.
Experian said in a short statement yesterday that it was disappointed by the watchdog’s provisional findings and that it will “continue to engage constructively with the CMA over the weeks ahead to seek to address its concerns” ahead of the publication of the watchdog’s final report due by March 11.
Analysts on FTSE 100 group
Deutsche Bank reaffirmed Experian as a ‘hold’ today, without specifying a price target on the shares, while UBS reaffirmed the company as a ‘buy’. According to MarketBeat, the blue-chip group currently has a consensus ‘buy’ rating and an average price target of 1,891p.