Update Osram Spin off & Lanxess
That’s what I wrote 2 weeks ago:
EBITDA was ~250 mn for the first 6 months of the fiscal year 2013. If we assume ~500 mn for the year 2013 and ~500 mn net debt, then 105 mn shares at 30 EUR would mean an EV/EBITDA of ~7. If we add 500 mn of unfunded pension liabilities, we have EV/EBITDA of ~8. That is not really cheap but rather expensive for such a cyclical and capital intensive business.
2 things changed here:
1) The price was 24 EUR as a first trade, 20% lower as discussed 2 weeks ago
2) The net debt number i used was not the most recent one but from 30.09.2012. The most recent one was 0.5 bn
So overall, the current evaluation looks like a lot more reasonable (2.4+0.5)/0.5 = 5.8 x EV/EBITDA if one assumes 500 mn EBITDA.
Just for fun, I looked up some info about the Lanxess IPO in 2004/2005. Interestingly, Bayer tried to IPO Lanxess against cash as well but then had to settle for a Spin-off.
On the first trading day, Lanxess went down -6.3% from an opening price of 15.75 EUR to 14.85 EUR. This was the lowest price ever for Lanxess.
In order to get not to excited about spin-off, one should remember the HypoReal Estate spin-off from Hypovereinsbank. We all kno how this ended.
Based on the now siginficantly reduced valuation, I feel tempted to go into Osram although with only a smaller alliocation (2-2.5%) of the portfolio as a spin off special situation. I will however wait until late afternoon to finally decide.
As of lunch time, only ~7.8 mn shares have been traded, I assume there is more to come. If the price goes significantly below 23 EUR, I will be on the buying side.