CLCO: Cash Merger Proposal Will Anchor Shares With Event Driven Upside Potential

Analysts have reduced their price target on Cool to approximately $98 from about $114. This reflects lower growth expectations, a reduced discount rate, and softer revenue projections, even as profit margins and valuation multiples modestly improve.

Analyst Commentary

Recent research updates reflect a more cautious, yet still constructive, stance on Cool as corporate events and revised transaction expectations reshape the risk reward profile. While headline rating moves have skewed toward downgrades, the valuation framework now more explicitly reflects the proposed cash acquisition and the embedded optionality around deal completion and timing.

Bullish analysts highlight that the new price objectives, though lower in absolute terms, continue to imply limited downside versus the indicative transaction price. They also point to the company’s resilient cash generation and disciplined capital allocation as factors that help support the floor under the equity value, even as upside scenarios become more tightly linked to deal dynamics.

In addition, commentary stresses that execution risk on existing contracts and the visibility of near term earnings remain key supports to the investment case. As a result, the shares are increasingly viewed as a tactical vehicle on the outcome of strategic alternatives, rather than a pure growth story, with valuation anchored by the proposed cash consideration.

Bullish Takeaways

• Bullish analysts see the revised price targets as aligned with the proposed cash offer. This effectively creates a valuation backstop that limits downside risk while preserving some upside if negotiations yield improved terms.
• Several notes emphasize that Cool’s underlying earnings power and contract coverage remain solid. This supports the view that the company is being acquired at a reasonable multiple rather than from a position of operational weakness.
• Positive commentary underscores that, even with neutral or hold ratings, the risk adjusted return profile can be attractive for investors comfortable with event driven situations, given the visibility on potential deal value.
• Analysts also point to management’s track record of operational execution as a factor that could enhance bargaining leverage in ongoing discussions. This in turn could translate into better pricing outcomes for shareholders.

What's in the News

• EPS Ventures has proposed a cash merger to acquire all remaining Cool shares it does not already own for $9.65 per share. After the transaction, Cool would be wholly owned by EPS and would seek delisting from the New York Stock Exchange and Euronext Growth Oslo (Key Developments).
• EPS Ventures, through Bounty Ltd, agreed in principle to acquire the remaining 40.7% stake in Cool for approximately $210 million, paying $9.65 per share in cash and targeting deal completion in the fourth quarter of 2025 or first quarter of 2026, subject to shareholder and regulatory approvals (Key Developments).
• Cool has formed an independent Special Committee of disinterested directors, with separate legal and financial advisors. The committee intends to recommend Board approval of the proposed transaction terms, and the Board has already approved the deal as of September 29, 2025 (Key Developments).
• Under the Merger Agreement, Cool must pay Bounty Ltd a $6 million termination fee if it ends the agreement before obtaining required shareholder approval and later signs a superior competing deal, provided it follows the agreement’s procedures (Key Developments).
• Cool set November 13, 2025 as the record date for a special shareholder meeting to vote on the EPS transaction, with Evercore advising Cool and Credit Agricole CIB advising EPS, alongside multiple international law firms on both sides (Key Developments).

Valuation Changes

• The fair value estimate has fallen significantly from NOK 114.50 to NOK 98.24, reflecting lower growth expectations despite improved profitability.
• The discount rate has decreased from 12.99 percent to 10.37 percent, indicating a lower perceived risk profile or cost of capital in the updated model.
• Revenue growth has moderated from 1.56 percent to 1.33 percent, implying slightly softer top-line expectations over the forecast period.
• The net profit margin has risen modestly from 22.52 percent to 23.49 percent, suggesting a more efficient earnings profile despite slower growth.
• The future P/E has compressed from 10.95x to 8.19x, pointing to a lower valuation multiple even as earnings quality assumptions improve.