Regency View:

TAKE PROFITS: Eleco (ELCO)

Close Eleco (ELCO) at market (229p)

Eleco has delivered an exceptional return for us, with the shares now up around 149.5% since our original recommendation, excluding dividends. That gain received a substantial final boost last week after Accel-KKR agreed a recommended 235p-per-share cash acquisition, a 74.7% premium to Eleco’s closing price immediately before the announcement. The offer has the unanimous backing of the Eleco board, while shareholders representing 45.2% of the shares have already provided irrevocable undertakings or letters of intent in support.

With the shares now trading at around 230p, there is only a small gap remaining to the 235p cash offer and therefore relatively little additional upside available from waiting for the transaction to complete, which is currently expected by Q1 2027. The underlying business remains in excellent shape, but the takeover has effectively brought forward much of the value we hoped Eleco would create over time. With a gain approaching 150% already secured and the remaining upside largely defined by the offer price, our house view is that this is an appropriate point to take profits and bring a highly successful investment case to a close.

Profit = 149.5% (excluding dividends)