Hostile Take-over, Appearance of White Knight or Something Else?

Kraš’s share price skyrocketed yesterday to the level of HRK 890 per share during daily trading and it ended the day at a level of HRK 750 per share. Yesterday’s daily turnover has amounted to EUR 5.1m which translates into 3.6% of share capital when looking at volume traded. Is there one buyer behind those trades and who is looking to profit from the strong share price hike?

When we look at Kraš’s share performance after their largest individual shareholder published an intent to announce a takeover bid either together with Kraš ESOP or individually, the share price and turnover of the share increased significantly. Yesterday’s closing price reached the level of HRK 750 which is a 25% increase compared to the closing price of previous trading day. Meanwhile, the turnover amounted to EUR 5.1m which is almost quadrupled compared to turnover on the day before.

YTD Share Price & Turnover of Kras Shares

Source: Bloomberg, InterCapital Research

Yesterday’s closing price puts Kraš at 11.4 EV/EBITDA multiple (when calculated on T12M basis) which for a take-over multiple looks well priced if a new potential acquirer is accumulating a minority position at those levels. It also depends if acquirer is a strategic investor, which would explain high multiple by additional synergies that it can achieve. If there is a new acquirer who is present on the market he will be known after he surpasses the shareholding of 5% as all shareholdings above this level have to be reported. The latest comparable transaction in the region is take-over of Bambi, a leading confectionery business in Serbia. Coca-Cola HBC AG bought Bambi at EV of EUR 260m, which gives this transaction an EV/EBITDA takeover multiple of 10.4x, when looking at Bambi’s 2018 financial results.

Considering that Kras’ share is currently trading at pre crisis levels, one could assume that there are many investors eager to cash in on the takeover hype. However, one can not but wonder if the buyer responsible for the sudden price increase is a white knight diverting Kras’ ESOP from joining with Braća Pivac in an attempt to acquire the remaining shares of the company.  Let’s wait for the aftermath.

Category : Flash News

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