APM Human Services Earnings: CVC’s Revised Cash Proposal Better Reflects APM’s Fundamental Value

CVC Asia Pacific has increased its nonbinding offer to acquire no-moat APM by 25% to AUD 2 cash per share. This follows the APM board unanimously rejecting CVC’s initial offer of AUD 1.60 cash per share on Feb. 19, 2024. We think the revised proposal better reflects APM’s long-term fundamental value, representing a smaller discount to our previous AUD 2.40 fair value estimate for APM. We think the likelihood of the revised deal closing is high and have accordingly decreased our fair value estimate for APM by 17% to AUD 2 per share.