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Investing.com -- Forvia stock is rising this week following reports that binding offers for its Interior division are expected this week, with potential valuations higher than previously anticipated.
Shares of the automotive technology company spiked yesterday after Merger Market reported that the Interior division could fetch between EUR1.8 billion and EUR2 billion, representing a 6-7x EV/EBITDA multiple. This valuation range exceeds previous market expectations.
According to the report, private equity firms Atlas and Apollo are among the sponsors considering submitting binding offers, while Chinese state-owned conglomerate CITIC is also contemplating an offer. The company has not commented on these reports.
The potential sale comes as Forvia works to reduce its debt load ahead of a strategic update scheduled for late February. Analysts view the development positively given the company’s financial position.
Kepler analysts noted: "Merger Market article is positive as Forvia’s debt load, including factoring, remains elevated at EUR7.7bn (2.2x leverage), and the suggested valuation is higher than we assumed."
The Interior division sale process gained attention after Bloomberg reported interest from three potential bidders on September 23. The current valuation discussions suggest strong interest in the asset, which could significantly improve Forvia’s balance sheet if a deal materializes at the reported price range.
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