Ok, if you have read the SGX annoucements, you will
know that Fincantieri has signed an agreement with
STX Group for 50.75% of STX OSV at $1.22 and it
is also launching a Pre-Conditional Mandatory Cash
Offer at the same price for all other shares not already
owned, that means the remaining 49.25% of shares.
This is really an outrageous and brazen offer and I
urge all other shareholders and the readers of this
blog who are also shareholder to ignore the offer and
toss the hardcopy of the offer when it arrive at your house.
It is a well-known fact that STX Group, the parent company
of STX OSV need money to pay off its debt, and have
been desperately trying to sell off the cash cow STX OSV
for over a years. I guess it has missed the golden period
to sell STX OSV at a better and more justified price last
year and is now force to wall and have to sell its priced
possession for a ridiculous low price of $1.22. It could have
been about 40-50% more if the timing is right.
I have told many readers who was bombarding me with
questions since the opening bell on STX OSV. My sincere
view is that the fundamental of STX OSV did not change in
this transaction. It is just a change of ownership from a beggar
to an opportunist. In fact, by acquiring STX OSV shares, it is
如虎添翼 to Fincantieri as it adds OSV building capability to
its already powerful ship construction business.
By getting the 50.75% stake of STX OSV, Fincantieri is under
SGX requirement to launch a Cash offer for the remaining
shares it did not owned, so it got no choice but to launch one.
A half-hearted one, I must add, as not many investors in his
sane mind will consider selling at such a lowly offer price.
You see, "The total value of the transaction, including both
the acquisition of the 50.75% stake and the mandatory cash
offer, will amount to approximately Euro 900 million (approximately
SGD 1,450 million). It will be financed mainly from Fincantieri's
internal resources and with a syndicate loan provided by a pool of
banks (Banca IMI, BNP Paribas - Italian branch, Carige, Unicredit)
and by Cassa Depositi e Prestiti as a lender guaranteed
by SACE." I believe that it won't have the support of other
major shareholder in STX OSV and I for one will defintely
reject the cash offer and continue to hold the stock until
it reach its rightful and justified price.
Nicolas Darvas Box Theory Trading Method
Investing Seminar
Timeless You
2 comments:
Thanks, I enjoy reading your mail. Btw do you think it is wise to buy at 1.30 and below since the offer buy In price is 1.22. I bought previously at 1.45 and thought of averaging . How if buyer company insist on buying over from shareholders by taking over but not delisting? Thanks very much
Hello, basically the offer price of 1.22 is far too dirt cheap given STX OSV's earnings and future potential. The parent company, STX Group, is too desperate to cut down its mounting debt, and that is why they are selling at such a depressed price. I am still very bullish on the prospects of STX OSV.
The sharehholders can reject the cash offer when they receive the document next year. The Italian buyer cannot delist the company unless it got a 90% hold of the shares, which I believe they will never make it. The cash offer will fail and lapse.
After that, the market forces will take over and it will be up to the fundamental and technical of the OSV to determine the traded price again
Post a Comment