Citi says DSV takeover of DB Schenker will lead to revaluation of share price

A takeover of DB Schenker is expected to significantly boost earnings at DSV and lead to a “revaluation” of the potential of the transportation group’s share price, Citi writes after DSV, according to Reuters, has won the bid to buy DB Schenker for EUR 14bn. 

The US bank has had a buy recommendation for DSV shares for more than four years and currently has a price target of DKK 1450 (USD 214.05)

“We see it as likely that the potential deal will result in a revaluation of the share price. We argued that the deal is likely to increase DSV’s earnings per share by at least 26% on a 50/50 split between equity and debt,” writes Citi.

Neither party has yet officially commented on the decision, but unnamed sources at the seller and owner, Deutsche Bahn, and the German government have told Reuters that DSV has won the battle, but that a final sale must first be approved by the Deutsche Bahn board.

The DSV share price was 6.5% higher at 10 am on Thursday at DKK 1331.50 (USD 196.59).

English edit by Katrine Gøthler