Intertain Group is still cheap, says Dundee

Dundee Capital Markets analyst Eyal Ofir says a U.K. listing could unlock the value in Intertain Group (Intertain Group Stock Quote, Chart, News: TSX:IT), which he believes is cheap compared to its peers.

At its Annual General Meeting this morning, Intertain reported that 99.98 per cent of those present voted in favour of its proposed initiative in the U.K. including listing Jackpotjoy PLC, which is intended to become the parent company for the Intertain Group on the London Stock Exchange.

“We are very pleased to have received such strong support from our shareholders for our U.K. strategic initiatives and to see that they share our belief that these initiatives will provide us with a platform to further develop our core assets for the long-term benefit of the company, its shareholders and other stakeholders, and, in particular, that the London Listing will contribute over time to a fuller and more-appropriate valuation of our business,” said chairman Neil Goulden.

Ofir says the U.K. listing is likely to produce a favourable result for shareholders.

“We believe that the LSE listing will attract a wider investor base from the UK as the LSE and overall Europe have a much broader exposure to the online gaming industry and the primary brands that IT owns are situation in either the UK or Sweden,” says the analyst. IT stock remains cheap trading at 7.8x 2017 EV/EBITDA vs. the peer average of 10.7x, and a much steeper discount on a PE multiple.”

In a research update to clients today, Ofir maintained his “Buy” rating and one-year price target of $21.00 on Intertain Group.

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