Monday''s trading update caused the shares to drop 13%, leaving c28% upside on the possible all-cash offer price by EQT, set at 4,070p per share. While the market seems sceptical on the deal going through (outcome expected by June 2), we believe EQT will proceed and most likely on unchanged terms. We turn opportunistic and upgrade the shares to outperform. Destocking and European slowdown behind the trading update Destocking in the USA went deeper than expected by a couple of weeks, with inventories at wholesalers now running at c.2 weeks. In the UK, the month of April was also disrupted by cut-off effects. Finally, in the rest of Europe, market slowdown was more pronounced than expected. The magnitude of the earnings revision looks limited The issue in the USA looks like a one-off to us. Dechra''s sell-out from Jan to April has been strong each and every month. Market slowdown or volatile quarters could also be explained by still-tough comps while the impact of large price increases creates monthly market volatility (windfall profits for wholesalers). We cut our EBITA expectation by 6% for FY23e and 3% for FY24e. Why do we think the EQT will deal go ahead? In our view, there are compelling reasons for EQT to continue with the deal. In addition to the appeal of Dechra''s pipeline, there are multiple levers for EQT to pull going forward, including entering new segments and geographies, buying out distributors, insourcing more production, and developing private label products for the Vet clinic chain owned by EQT. Upgrade to Outperform, fair value lifted to 4,070 pence (EQT all-cash offer) While we believe a further extension of the PUSU (''put up or shut up'') deadline is likely, we are also convinced that a firm offer will come. Being highly experienced in the sector, EQT should not be surprised by the market slowdown. The current offer price also offers a modest premium vs Dechra''s historical 12m forward EV/EBITA and PE multiples, while the...