Orpea: How can the new surge in Orpea shares be explained?

(BFM Bourse) – The retirement home operator jumped on Wednesday after having already chained several convincing increases in previous sessions. Analysts put forward press information on an investment by the Caisse des dépôts or even the anticipation of a potential rebound to try to explain this movement.

A new time, Orpea experiences impressive volatility. The operator of retirement homes in turmoil since the publication of the investigative book The Gravediggers sees its share price jump by 15% this Wednesday, around 2:40 p.m. This strong increase follows two increases of more than 7% over the last two sessions.

Over the whole of the start of 2023, the stock regained more than 40% to 8.66 euros. As when previous casesthis recovery of the action is difficult to decipher.

“The action today may arouse the interest of retail investors [particuliers, NDLR]. And since the beginning of the year, there seems to be an impression on the market that the last will be the first, that the bad stock market students in 2023 can take their revenge. However, the situation is far from clear on the file Orpea“, estimates a financial intermediary.

A plunge of more than 90% last year

The retirement home operator suffered the biggest drop in the SBF 120 last year, with a price drop of more than 90%. So despite the recent uptrend, the market capitalization stands at just 560 million euros, around half that of its rival. Korian. And nearly twenty times less than its debt, more than 9 billion euros.

“The press reports announcing Caisse des dépôts’ interest in investing in the group have probably been interpreted positively by the market. In addition, the upward movement may be amplified by redemptions of short [c’est-à-dire des vendeurs à découvert qui achètent le titre pour déboucler leur position, NDLR]“, Considers an analyst for his part.

In an article published on Friday, The echoes reported that the Caisse des dépôts et consignation (CDC), was ready, in collaboration with institutional investors, to provide “at least the majority of the billion and a half euros hoped for by the Ehpad group”.

The institution and its allies would require in return to obtain the majority of the representation within the board of directors of the company. Nevertheless, The echoes also indicate that the CDC requirements would oppose the main alliance of non-bank creditors ofOrpeawith significant differences on the valuation of the group, the distribution of capital and the economic model of the company.

Contacted by BFM Bourse, Orpea did not comment. The CDC, for its part, did not comment on the article in Les Echos but recalled its line adopted in November. Caisse des dépôts then laid down as prerequisites a clean-up of the group’s balance sheet as well as a complete change in practices before taking a position on the file. Orpea.

Undermined by cost inflation and weighed down by its heavy debt, the operator of retirement homes recently announced a major financial restructuring. This plan provides for fundraising of nearly 6 billion euros, including approximately 600 million euros in new debt guaranteed on assets and more than 5 billion euros in capital. A recapitalization described as “titanic” by the analyst of the independent research office AlphaValue, Yi Zhong, in a note published in November, and which will result in a “massive” dilution for its shareholders.

Julien Marion – ©2023 BFM Bourse

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