A takeover bid for Australia’s leading death care provider would amount to a ‘steal’ if it went through at the current price offer, according to one Morningstar analyst.

TPG Global, a private equity company which specialises in alternative assets, put through a non-binding indicative offer for ASX-listed funeral and crematoria operator InvoCare (IVC) on Tuesday.

The $12.65-per-share offer sent shares in the company soaring more than 30% to around $12 apiece, where they have held steady during trading on Wednesday.

TPG acquired a 17.8% stake in InvoCare in a late raid on Monday, ahead of the formal takeover offer.

Morningstar analyst Angus Hewitt says the $1.81 billion bid comes in “too cheap”, pointing toward the opportunistic timing.

“We think TPG is looking to capitalise on share price weakness following relatively disappointing 2022 results.”

Despite the recent price surge, InvoCare shares remain undervalued compared to Morningstar's fair value estimate of $14.50 per share.

In recent months, InvoCare has continually been held up by Morningstar analysts as a potential buying opportunity, given the company’s wide-moat status and discounted share price relative to its fair value estimate.

The company’s recent trading history has been hampered by a downturn in deaths during the COVID-19 pandemic, but despite the short-term impact, Hewitt says the long-term outlook for the company remains strong.

“We expect InvoCare to remain the dominant force in Australian funerals and benefit from the industry dynamics of Australia’s growing and ageing population,” Hewitt adds.

Hewitt says TPG may have been attracted to the company’s “strong competitive position and dominant market share”.

Before TPG’s offer can be acceptedthe proposal will need InvoCare board support and the relevant investment committee and regulatory approvals, including from Australia’s Foreign Investment Board.

An assessment by the InvoCare board is underway.