Market Overview

Citi Research Hearing Genesee & Wyoming Looking For Partner In Bid For GRail

Citi Research Hearing Genesee & Wyoming Looking For Partner In Bid For GRail

Citi Research provided its outlook on the potential GRail transaction. Referring to recent press release, according to which Genesee & Wyoming Inc(NYSE: GWR) is looking for a partner in its bid for GRail (Glencore's Australian coal haulage operations in Hunter Valley Australia), the analysts analyzed the potential outcomes and financial impacts on the company.

Related Link: Genesee & Wyoming May Traffic Falls 3.8%

"The total purchase price has been discussed to be in the US$1 billion range, which would make the transaction too large for Genesee without issuing equity and following the stock's post-Brexit decline, we see that proposition as uneconomic. Ultimately, we expect a partnership to be the likely avenue and for simplicity sake assume a 50/50 split. In this scenario the transaction could be accretive by 2–3 percent on 2017 EPS, if successful," wrote Citi.

According to the analysts, the press reports indicate Glencore is looking for bidders around A$1.5 billion, which generates ~A$100 million in annual EBITDA on ~A$160 million of revenue. This assumes an EBITDA multiple in 11–15x range. Based on 11x multiple and a 50/50 deal, analysts expect the GRail transaction to generate 11c of 2017 EPS or 2.8 percent accretion on their $3.90 estimate. At 15x accretion falls to 7c, or 1.8 percent.

Latest Ratings for GWR

Jul 2019Credit SuisseUpgradesUnderperformNeutral
May 2019Bank of AmericaDowngradesNeutralUnderperform
Apr 2019Raymond JamesDowngradesOutperformMarket Perform

View More Analyst Ratings for GWR
View the Latest Analyst Ratings


Related Articles (GWR)

View Comments and Join the Discussion!

Posted-In: Citi GlencoreAnalyst Color M&A News Rumors Analyst Ratings Trading Ideas

Latest Ratings

PCTYJMP SecuritiesMaintains220.0
KMBRBC CapitalMaintains147.0
AZEKRBC CapitalMaintains50.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at