Short cuts: Installux, Kuka, Aixtron

Installux:

Installux is surprisingly one of my best performing stocks this year, including dividends the stock is more than 30% and is at an all time high.

installux

I did not fully understand why until I read the 6 month report.

Sales are up ~7% yoy, 6M earnings per share are 17,16 EUR vs. 14,37 EUR, an increase of almost 20%. Profit improvements happened across most of their sectors, so it doesn’t look like single special effects or so. Despite the recent run-up, the stock remains exceptionally cheap.

Kuka & MDAX exit

For those who did follow my comments on the original Kuka post, they might have noticed that I sold the stocks 2 days ago and bought them back yesterday slightly cheaper.

The reason was that in the meantime, the tendered shares were kicked out of the MDAX, the popular German MID Cap index.

As I was not sure how the shares would react I decided to manage the risk by staying out.

At the end of the day not much happened:

mdax kuka

Nevertheless I was able to cheapen my purchase price from ~107,5 to 106 EUR. As the deal now is more attractive, I invested a total of 4% of the portfolio.

 

Aixtron – another special situation (with a Chinese buyer)

Aixtron, a former TECDAX star has fallen on hard times. However a few weeks ago, a Chinese buyer showed up and finally made an offer for the company at 6 EUR per share.

With a share price at currently 5,53 EUR, the discount is similar to Kuka at around 8,5%.

The situation differs slightly from Kuka:

  • the buyer is a financial buyer, not a strategic one (more opportunistic ?)
  • The purchase price is “optically” not as rich as the one for Kuka (below book)
  • they require at least 60% acceptance as closing condition (vs. 30% for Kuka)
  • within the offer they have a “put” if the index (DAX or TEcDax) goes down more than 30%

On the plus side, there is little risk that anyone complains about the deal as Aixtron was not doing well anyway and they are not deemed “strategically important”. The time horizon here should be shorter than for the Kuka deal.

The offer runs until October 7th. So far, the acceptance is low, as of today, only 1,64% of the shares have been tendered.

I think the risk is slightly higher than in the Kuka case as they might not reach their threshold, on the other hand there might be a chance for a better offer.

Although the situation is less clear for me as in the Kuka case, I start here with a 1% position at 5,53 EUR and will monitor it closely.

 

 

 

29 comments

  • I reduced my Kuka position by 2/5. Reason: I found a much more attractive Special situation and ran out of cash….

  • “CFIUS informed the Bidder and AIXTRON that, if the parties did not withdraw their
    CFIUS notice (the “Notice”) and abandon the transaction, the matter would be referred to the
    President of the United States, who has the power to prohibit the transaction.”

    Happy days!

  • The German Government seems to be in “full intervention” mode:

    http://www.wiwo.de/politik/deutschland/chinesische-investoren-bundesregierung-interveniert-auch-bei-osram/14748686.html

    Beim geplanten Kauf der Osram-Lampensparte Ledvance mĂŒssen die chinesischen Interessenten einen RĂŒckschlag einstecken. Das Bundeswirtschaftsministerium hat den Antrag der Bieter auf eine Unbedenklichkeitsbescheinigung abgelehnt, wie die WirtschaftsWoche aus Finanzkreisen erfuhr.

    Das Bundeswirtschaftsministerium Ă€ußerte sich auf Anfrage dazu nicht, unternehmensnahe Kreise bestĂ€tigen die Nachricht allerdings. Die Bundesregierung wird den Deal laut Kreisen nun einer vertieften PrĂŒfung unterziehen. Das bedeutet, die potenziellen KĂ€ufer sowie das Unternehmen werden monatelang warten mĂŒssen, bis sie wissen, woran sie sind. UrsprĂŒnglich sollte die Transaktion im GeschĂ€ftsjahr 2017 abgeschlossen werden.

    Der geplante Kauf der Lampensparte fĂŒr 400 Millionen Euro wird nun wohl erst mal auf Eis gelegt, bis ein verlĂ€ssliches Signal aus Berlin vorliegt. Das dĂŒrfte auch fĂŒr den erst kĂŒrzlich bekannt gewordenen Plan der Chinesen gelten, nicht nur die Lampensparte zu kaufen, sondern Osram komplett zu ĂŒbernehmen.

  • Am I right in understanding the the tendered Kuka shares (DE000A2BPXK1) will be re-admitted to the main listing if the takeover does not settle by the 31/03/17 ?

  • Regarding Aixtron:
    There should be a good chance now that the deal goes through with 65%+

    Bundesanzeiger still shows a significant short interest in Aixtron shares of about 11,5%. If they are all going to compete for the remaining 35% of shares outstanding, don’t you think things could get interesting again?

  • A bit puzzled that Aixtron’s yield is widening…any thoughts?

  • GABRIELE FANCIULLI

    Hi,

    I got an interest in special situations and your website is great. I am still learning and not acting so far, but just to understand more, would it be now to late to buy KUKA shares to partecipate to the offer?
    Thanks

    • Technically, the ku23 shares participate automatically. However you might want to learn more about the mechanics if you don’t know This. Reading and understandig the offer documents is key.

  • Bei Aixtron sind ĂŒbrigens noch mind. 6% leerverkauft.

    https://www.bundesanzeiger.de/ebanzwww/wexsservlet

    Der grĂ¶ĂŸte AktionĂ€r mit 8% sieht die Sache kritisch:

    “Barry Norris, Chief Investment Officer of Argonaut Capital has questioned whether the buyout price was actually worth the value for shareholders, since Aixtron had injected about EUR 300 million in R&D over a span of five years.”

    Das ist die Sache, die ich bspw. auch an einer Kontron interessant finde. Was ist das im. Vermögen wert, wenn man jahrelang geforscht hat? Da hat keiner einen wirklichen Einblick. Kontron will ja auch in die Ecke Industrie 4,0 & Internet der Dinge. Und hat jetzt erstmal 2/3 des Goodwill abgeschrieben. Da wĂŒrde mich eine Übernahme oder eine Verkauf des operativen GeschĂ€ftes auch nicht wundern.

    Ich denke, dass sie die 60% noch lange nicht zusammen haben Bei Kuka brauchten die Chinesen ja netto nur 20%, da Midea schon 10% hatte,

  • This is an ignorant question but is it common for German stocks to split their trading between shares that have accepted the tender offer and shares that have not (I think this is the difference between KU2 and KU23 but could be wrong)? Is this done at the direction of the exchange or the company? Is there a release from the company that describes the difference in rights between the two share classes? I don’t see anything on their site but could be missing it.

  • Das mit Aixtron ist nicht ganz korrekt. Die erste Annahmefrist ist der 7. Oktober. Sollte es klappen, dann beginnt die zweiwöchige Nachfrist. Und dann kann erst ĂŒbernommen werden. Sie nennen ja auch MĂ€rz 2017.

    Bei Aixtron gibt es 2-3 Bonuszertifikate, die werfen 3,x % bis 5.10. ab. Also vor der ersten Frist und haben Sicherheitslevel von 4,40 Euro. Ich bin am Überlegen, falls es noch ein bißchen gĂŒnstiger wird (als >4%) mir sowas zu kaufen und dann entweder in den 2 Tagen bis zum Angebot oder in der Nachfrist Aixtron-Aktien. Auch dann sollte noch ein Abschlag da sein. Dazu wĂŒrde Aixtron wahrscheinlich aus dem TecDax fliegen, wie Kuka aus dem MDAX.

    Das Risiko ist m.E., dass irgendjemand auf “mehr” zockt und dann geht es wie bei K+S aus. Daher hĂ€tte ich vor einem Einstieg gerne Gewissheit.

  • I love how Installux’ managers are careful with capital investments. Check this sentence taken out of their financial newsletter:
    : “Souhaitant cependant de rester prudents, nous avons dĂ©cidĂ© de dĂ©caler le
    programme d’investissements dans une nouvelle presse chez IES, mais nous poursuivons le montage technique et financier afin d’ĂȘtre rĂ©actifs si la reprise Ă©conomique se confirme.”

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