EHS Investments Issues Public Statement on CAB Payments

EHS Investments, which owns just under 1.0% of CAB Payments, opposes the Helios Consortium’s possible offer, arguing it substantially undervalues the company; the release cites StoneX’s higher 110 pence offer but does not state Helios’s offer price in pence. EHS estimates CAB could achieve adjusted EPS of at least 15 pence by 2028, implying about 30% CAGR from 2025 levels, and says Helios’s offer values it at 5x 2028 earnings, excluding £26 million of excess capital. EHS also estimates potential shareholder returns exceeding 25% of current market capitalization over three years; these are shareholder estimates and projections, not company guidance.

Analysis

The key asymmetry is not the activist’s headline valuation but whether its earnings bridge is durable enough to make shareholders reject a cash exit. EHS’s 2028 case relies on assumed income growth, deposit NII and cost mix; none is independently validated here. Currency volatility is especially important: it can obscure volume growth, but can also make earnings and the capital-return runway less predictable. Verify constant-currency revenue, realized FX spreads, client retention and regulatory capital before underwriting the recovery.

Near term, the dispute may increase CABP’s standalone value through a higher bid or improved terms, but it also raises execution risk: a failed process could remove the offer floor while the growth case remains unproven. StoneX (SNEX) is relevant as a potential competing bidder, not simply a comparable valuation; any financing, diligence or strategic rationale behind its stated interest needs confirmation. Corpay (CPAY) and StoneX are not clean valuation anchors for a smaller, differently exposed payments business. Helios Fairfax Partners (HFPC.U) faces deal-outcome uncertainty, but the effect on its consolidated value cannot be inferred from this statement.

Over 1–3 months, watch formal offer documents, board recommendations, shareholder support and any revised proposal. Over 6–18 months, the thesis depends on earnings conversion and actual capital returns, not targets. Contrarian risk: rejecting a bid based on a small shareholder’s optimistic model may leave investors with FX-sensitive earnings and no near-term catalyst. Conversely, a low bid could underprice the option value of a credible recovery.

Key Decisions for Investors

• Treat CABP as an event-driven situation, not yet a proven growth compounder. Do not initiate on EHS’s valuation claims alone; first compare the live share price with firm offer terms and quantify downside if the process lapses.
• Watch for a formal competing bid or improved terms over the coming weeks. Consider CABP exposure only if the offer spread compensates for deal-break risk and the standalone downside is supportable; current price, bid conditions and timetable are missing, so no entry level is justified here.
• Request a verification checklist before underwriting the 2028 case: constant-currency income and payment-volume trends, FX-related earnings sensitivity, client concentration/retention, capital requirements, and board-confirmed excess-capital distribution. Falsification signals include weaker guidance, deteriorating volumes or no realized capital return.
• Avoid using CPAY or SNEX as a mechanical hedge or valuation target. Revisit peer-relative exposure only after comparing business mix, growth definitions and earnings quality; shorting either now would be an ungrounded expression of this deal dispute.