Short cuts: EGIS, Hornbach/Praktiker, Rhoen Klinikum, KPN
This is from a broker report issued end of September by “Wood & Company”_
During the brief analysts’ conference call yesterday morning, Servier stressed two points: 1) regardless of the acceptance of the offer, Servier plans to delist the shares; and 2) Servier’s HUF 28,000/sh offer is final and will not be revised.
The minimum threshold to trigger a squeeze out under Hungarian regulations is 90%, which means that Servier needs acceptance from 79.63% of the outstanding free float, or 3.043m shares.
Regardless of the acceptance of the offer, Servier still intends to call an EGM to delist the shares from public trading, a step that requires a 75% majority of the votes cast; to block the delisting would require an absolute minimum of c.1.32m votes against, or c.35% of the free float.
Their recommendation is as follows:
Although Servier’s HUF 28,000/sh offer appeared generous at first glance, if taken in the context of the company’s improved profitability seen the past 24-18 months, the upside from its biogenerics and the M&A potential that Servier would be keeping, we believe it is worth asking if the offer could not be better. As the tender process is just beginning, we would probably wait to see if the bid is not improved.
That sounds reasonable.
I am speculating that there might be a speculation taking the price above the 28k HUFs at some point in time. The downside for this speculation is basically zero.
The sale process for the Praktiker subsidiary Max Bahr seems to have a deadline on Thursday this week. Handelsblatt reports that there are 2 bidders left (Hellweg, Globus), a local newspaper reports that only Hellweg is remaining.
For Hornbach, the sale to a mid-sized competitor might be not as good as an outright bankruptcy, but better than Kingfisher entering the market.
Today, three was a report in Handelsblatt, that the recovery for bond holders will be ZERO, as the remaining funds will not even be enough in order to pay for the liquidation.
On Tuesday, one of the two shareholders who blocked the original deal with Fresenius, Braun Melsungen, disclosed that they have increased their stake from around 5% to 11%.
As some of my readers already commented, it is not clear why Braun is doing this, the revised deal will not be impacted by this.
Let’s wait and see but that might explain also the performance of the shares in the last few days.
Yesterday, Carlos Slim dropped the bid for KPN. To me it is not clear why, but in any case, the price for KPN dropped almost 10%. However, I think that this is NOT the end of the story.