LBO

Question 1

Debt Assumption

Answer 1

10 year average equity check is 41%, that hit 51% in 2023 for the first time in recorded history

Average debt multiple on public take private’s in 2023 was 4.8x, down from 6x in 2022

Question 2

What would need to happen to make Tesco LBO’able?

Answer 2

Point to sensitivity table and how there would need to be margin expansion and thus exit multiple uplift

Unlikely due to super high competition and low margin industry.

Price would have to drop more in line with AV EBITDA peer average , even then equity check so large

Question 3

Exit multiple graph bottom left

Answer 3

Have taken the conservative assumption they will return to trading in line with peers in the long run

I appreciate this is speculative, other share prices are shown