At the close of its mandatory offer for STX OSV shares on 13 Mar 2013, Fincantieri received only 4.88% valid acceptances, bringing its total shareholdings to 55.63% (pre-offer: 50.75%). The low acceptance level is unsurprising given that the Board of Directors has recommended shareholders to reject Fincantieri’s offer as it is not compelling enough. Looking ahead, we believe there will be better clarity in terms of corporate identity, board leadership and senior management. Fincantieri has also stated that it has no intention to (i) introduce any major changes to STX OSV, (ii) re-deploy the fixed assets or (iii) discontinue the employment of its employees. Maintain BUY with unchanged S$1.52 fair value estimate.
4.9% valid acceptances received
At the close of its mandatory offer for STX OSV shares on 13 Mar 2013, Fincantieri received only 4.88% valid acceptances, bringing its total shareholdings to 55.63% (pre-offer: 50.75%). The low acceptance level is unsurprising given that the Board of Directors has recommended shareholders to reject Fincantieri’s offer as it is not compelling enough.
Och-Ziff has disposed off its shares
According to disclosures announced in SGX, funds affiliated with hedge fund Och-Ziff has aggressively cut their shareholding in STX OSV after the announcement of the offer (on 21 Dec 2012) such that they controlled only 1.13% of STX OSV as of 13 Mar 2013, down from 12% pre-announcement. Unlike traditional long-only funds, Och-Ziff’s primary investment strategies include event-driven investing which attempts to realize gain from corporate events such as spin-offs and other corporate restructurings. With Och-Ziff disposing off its investment in STX OSV, we believe much of the share overhang would have been removed going forward.
Rebranding and board changes
Meanwhile, STX OSV announced that it will be rebranded as VARD. A proposal for a new name for the group holding company, STX OSV Holdings Limited, will be formally tabled for resolution at the upcoming AGM in Apr 2013. Separately, three STX-nominated directors, including the Chairman, have resigned from the board. We expect Fincantieri to appoint three new members to replace the outgoing directors.
Maintain BUY
With the mandatory offer now over, we believe there will be better clarity going forward in terms of corporate identity, board leadership and senior management. Fincantieri has stated that it has no intention to (i) introduce any major changes to STX OSV, (ii) re-deploy the fixed assets or (iii) discontinue the employment of its employees. Maintain BUY with unchanged S$1.52 fair value estimate.
At the close of its mandatory offer for STX OSV shares on 13 Mar 2013, Fincantieri received only 4.88% valid acceptances, bringing its total shareholdings to 55.63% (pre-offer: 50.75%). The low acceptance level is unsurprising given that the Board of Directors has recommended shareholders to reject Fincantieri’s offer as it is not compelling enough.
Och-Ziff has disposed off its shares
According to disclosures announced in SGX, funds affiliated with hedge fund Och-Ziff has aggressively cut their shareholding in STX OSV after the announcement of the offer (on 21 Dec 2012) such that they controlled only 1.13% of STX OSV as of 13 Mar 2013, down from 12% pre-announcement. Unlike traditional long-only funds, Och-Ziff’s primary investment strategies include event-driven investing which attempts to realize gain from corporate events such as spin-offs and other corporate restructurings. With Och-Ziff disposing off its investment in STX OSV, we believe much of the share overhang would have been removed going forward.
Rebranding and board changes
Meanwhile, STX OSV announced that it will be rebranded as VARD. A proposal for a new name for the group holding company, STX OSV Holdings Limited, will be formally tabled for resolution at the upcoming AGM in Apr 2013. Separately, three STX-nominated directors, including the Chairman, have resigned from the board. We expect Fincantieri to appoint three new members to replace the outgoing directors.
Maintain BUY
With the mandatory offer now over, we believe there will be better clarity going forward in terms of corporate identity, board leadership and senior management. Fincantieri has stated that it has no intention to (i) introduce any major changes to STX OSV, (ii) re-deploy the fixed assets or (iii) discontinue the employment of its employees. Maintain BUY with unchanged S$1.52 fair value estimate.
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