The price puts the bid at a P/E of 12 and EV/EBITDA of 7. The bid represents a discount to market price of 41%.

Kraš published a document on the Zagreb Stock Exchange stating that Mesna Industrija Braća Pivac (further: Braća Pivac), the current major shareholder of Kraš (30.73%) would announce a takeover bid in the following 7 days. The mentioned takeover bid was published earlier this morning and amounts to HRK 430 per share, which represents a discount to market price of 41%. Note that the takevoer bid puts it at P/E of 12 and EV/EBITDA of 7, while the share is currently traded at P/E of 29.3 and EV/EBITDA of 14.6. The bid is valid for 28 days.

Such a low price (compared to the market one) could be attributed to the fact that Braća Pivac are obliged to set the minimum price at either their highest acquiring price of shares in the past year or the 3-month weighted average trading of the share, both calculated prior to the takeover bid obligation (9 September 2019). It is worth noting that the 3-month weighted average trading of the share prior to the takeover bid obligation amounted to HRK 427.05 per share, while Braća Pivac acquired the shares of Kraš in the past year (prior to the takeover bid obligation) at the highest of HRK 410 per share.

Since the takeover price will be offered at such a high discount, it is reasonable to assume that the takeover will not be successful.

As a reminder, in early September, Braća Pivac acting in concert with KRAŠ-ESOP announced the intent to publish a takeover bid. In that announcement Braća Pivac stated that in case if the two parties did not reach a joint decision, they would publish independently a voluntary takeover bid. Later that month, Kraš ESOP held an extraordinary shareholder meeting in which the assembly voted against the proposal of acting in concert with Braća Pivac.

To read more about Kraš click here.