News from Tallinn – a reason for celebration in Ignitis grupė’s backyard?

Vitalij Šostak, co-founder of PLY Analytics, shared insights with Verslo žinios regarding Enefit Green’s proposed share buyout price and comparisons with Ignitis grupė.

The price offered by Eesti Energia values Enefit Green at a market capitalization of nearly EUR 900 million.

“Let us add to that the net debt, which has risen to as much as EUR 690 million. We end up with a company valued at EUR 1.59 billion (EV). In 2024, EBITDA amounted to EUR 115 million. That gives us an EV/EBITDA multiple of around 14x,” states Vitalij Šostak. “There does not appear to be much economic logic here.”

“The wording of the announcement itself implies that the pricing is highly technical, with little visible economic or financial justification behind it. Looking at the announcement, the proposed price, and all of this in the context of recent years’ price dynamics, the question arises as to how much of this decision is economics and how much is politics. In my opinion, there may be considerably more of the latter element,” V. Šostak reflects.

According to V. Šostak, drawing parallels between the valuations of Enefit Green and Ignitis grupė is not entirely rational, “especially considering the increased risks surrounding Ignitis grupė’s investment plans, which, even without a political dimension, were already fairly risky due to their scale, uncertainty of returns, and need for external financing.”

The full commentary is available in the Verslo žinios article: Naujienos iš Talino – pagrindas šventei „Ignitis grupės“ kieme?