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Steel Partners: Significant Discount To Stated NAV With A Hidden Asset And Catalysts

Thesis - Steel Partners Holdings LP's (NYSE:SPLP) Adj. NAV is worth $33-$37 once including WebBank's value, vs. the current price of $17 (+93-115% return to NAV), or more realistically worth $26.50-$29.50 assuming a 20% holdco discount (+54-72%). Unlike other valuation analyses on SPLP which assume WebBank's value at book value, we assign a 10-15x pre-tax NI valuation for WebBank, which is appropriate for a 16-27% pre-tax NI grower with a >50% ROE. This results in an additional $171-$273 mm of incremental value to NAV above the $33 mm value attributed in the previous NAV (based on TBV). In addition, tender offers and a WebBank value realization event (i.e. M&A, etc.) should provide meaningful catalysts on a go-forward…