Tag Archives: Emak spa

Quick updates: Installux, EMAK, SIAS & ATSM

As I am not doing this fulltime, I sometimes miss if companies publish their results. In principle, for my “Value companies” I don’t think that one time period makes a big change in the overall investment case. However it definitely makes sense to look at existing companies at least once a year.


As reader Caque commented, Installux reported prelimary earnings a few days ago.

With 6.67 mn EUR or around 22 EUR per share, earnings were surprisingly good. Net cash is now at 18.8 mn EUR or 62 EUR per share. So trailing EPS ex cash is around (100/22) ~4.9 times, quite low for a company which earns around 15-20% ROCE.

2013 will clearly be a challenge for them, according to the last sentence of the statement:

L’environnement général incite Installux à la prudence quant à ses perspectives 2013. Le groupe anticipe un repli d’environ -8%. “Cette tendance se confirme malheureusement en terme de volume d’activité sur le 1er trimestre (-13%),

-13% in sales in the 1 quarter is quite substantial. On the other side, this might open up some interesting entry points during the year. Nevertheless it should be clear that France in general is going through a quite difficult year. As ussual, the stock price doesn’t do much and volume remains low:

One remark from my side: France and the Netherlands are Germany’s major trading partners. I cannot understand how people can be so positive about German companies and negative about Netherlands and France in particular.


EMAK came out with a investor relation presentation including preliminary annual figures already a few weeks ago.

Interestingly, the “old” EMAK business is doing quite poorly, profit is down 50% or so. The “new” businesses acquired from the main shareholder were holding up much better. So looking back, the dilution is not that big.

EPS was ~5 cent per share so we have a trailing P/E of around 10. If they really make good on their ambition level (38-40 mn EBITDA), the stock would be quite cheap. Let’s wait and see, no need to do something at the moment. This has 2-3 years more to play out.

The stock price at the moment seems to “lazily” trail the FTSE MIB to a certain extent:


SIAS came out with preliminary 2012 numbers already 4 weeks ago.

What was clearly an issue is the fact, that traffic declined significantly in 2012, much more than expected. So despite a overall tariff increase, revenues stayed flat.

The good news: On April 15th, they are expected to pay the special dividend of 90 cent per share , distributing what is left from the sale of the Chilean asset sale and the purchase of the concession.

Operationally, there seems to be additional preassure from the regulatory side, as agreed tarrif increases have been suspended by the regulator.

After the special dividend, a large part of the “special situation” aspect (extra asset) has now played out. Howver, the fundamental part looks not as good as I have though initially. I will need to decide if I hold on to SIAS as a “Normal” value investmetn or sell it at some point in the near future. Fundamentally, the company does a lot worse than I had exepected. Thankfully, the entry price was low enough and investors seem to liek special dividends.

The stock price has outperformed the FTSE MIB in the last 12 month by a margin of more than 30%. Quite significant for a purely domestic business:

Even more interesting:

Autostrada (“ATSM”) now caught up with SIAS ver 2 years as it turned out that the “Italian Job”, the Purchase of Impregilo,turned out to be a great special situation investment, netting Autostrada a nice profit.


Maybe time to switch back into the “Cheapie” ? Let’s wait and see. Definitely worth to check the Autostrada annual report this year.

EMAK SpA – results of subscription rights exercise period published

Many thanks to Winter who linked in the AZ Forum to the results of the exercise period for the subscription rights.

In total almost 99% of the subscritption rights have been exercised.

During the subscription period, which began on 21 November 2011 and closed on 13 December 2011, 26,976,676 rights were exercised, corresponding to an aggregate of 134,883,380 Shares subscribed, equal to the 98.974% of the 136.281.335 Shares offered in the context of the Capital Increase, for a total amount of euro 57,325,436.50.

It looks like that my Paranoia Scenario was indeed only paranoia:

In accordance with the commitment undertaken on 5 August 2010, Yama S.p.A. has exercised all the rights to which it was entitled in the context of the Capital Increase and in relation to all Emak S.p.A. shares it owns (corresponding to the 74,285% of the share capital of Emak S.p.A. and to the 75,368% of the share capital excluding the treasury shares owned by Emak S.p.A.).

Consequently, Yama S.p.A. subscribed 102,712,500 Shares, for a total amount of euro 43,652,812.50.
Following the subscription of the Capital Increase, Yama S.p.A. will hold the 74.285% of the total share capital of Emak S.p.A. (corresponding to the 75.368% of the share capital excluding the treasury shares owned by Emak S.p.A.).

It looks like YAMA has exercised exactly the number of rights they got from their initial stake and they did not sell or buy any subscription on a net basis.

So for the moment it looks more like really bad execution than an evil genius trying to squeeze out the minority shareholders.

EMAK SpA – The paranoia edition

In the last days I analysed the strange behaviour of the EMAK shares since the subscription rights started to trade (Part 1, Part 2).

Just to remember: On Friday 18th, before the subscription period, the Stock traded at ~ 2,10 EUR. This equals 0,75 EUR after the split of the subscription rights.

Since then, the stock systematically trades down towards the exercise price of the subscription right (0,425 EUR).

Remark: A lot of the available charts do not correctly adjust for the subscription right. The correct historical chart can be found for instance at Borsa Italiana directly.

So what is happening here ? In my opinion one has always to ask: Do I miss something here ? Or to put it another way: Does someone have a strong incentive that the price will go below the subscription price by the end of the subscription period ?

If we go back one step, we should ask addtionally: What was the purpose of the whole exercise anyway?

When I read the announcement that the majority shareholder Yama SpA wants to sell his other holdings to EMAK, my first reaction was: they need cash. However after disclosing that they will take up their share of the capital increase, the cash effect for the shareholder was relatively small.

Another reason could be the following: Maybe Yama’s real intention is to scare away minority shareholders and take over the minority shares as cheap as possible ?

Lets consider the following:

For a squeeze out in Italy , they need according to this document 95% of the company.

Before the rights issue, Yama held 74% or 20.5 mn shares of a total 27.6 mn shares.

After the exercise of the subscription right, we will hav a total amountof 163.9 mn shares (5 new for 1 old minus Treasury shares).

In the past trading days since beginning of the subscription period, a total of 1.05 mn shares have been trades for around 600 Tsd EUR which resulted in a drop from around 0,75 EUR to 0.48 EUR (low intraday today)

So in theory (paranoia scenario), the following could happen:

– Yama is currently selling its own shares to depress the share price below the subscription price of 0.425 EUR (only 4.5 cents to go, they have plenty of material).
– most shareholders then will not exercise the subscription right. Normally the unexercised subscription rigths will be sold for almost nothing in an closing auction at the last day
– Yama buys all the subscription rights and exercises them

This would result in the following change in percentage ownership, assumed that Yama needs to sell another 1 mn shares, to reach this target:

Yama: 20.5 mn shares, 74%
Minorities 7.1 mn shares, 26%

After: (total 163.9 mn shares)

Minorities 7.1 + 2 mn = 9.1 mn shares or 5.5%
Yama: 20.5 – 2 mn + all new shares (~136 mn) = 154.8 mn shares or 94.5%

So if this works out, YAMA almost reaches the threshold for a squeeze out. If they tehn achieve to hold the shareprice down for a further few months, the might be able to purchase the remainder for a relatively small fee.

Summary: There could be a downside scenario where the majority shareholder has structured this whole exercise to be a clever way of squeezing out minorities at a depressed price level. I am not sure how possible this is, but it should definitely be considered in any investment decision.