On Friday after the market’s close, the regulator (HANFA) approved Tankerska Plovidba’s takeover bid announcement for TURISTHOTEL (TUHO). In the document, the takeover price of HRK 4.6k (EUR 610.53) per share was revealed, representing a premium of 4.98% over the 3-month VWAP and 11% on the 1-year VWAP.
The requirement for the publishing of the takeover bid came into effect on 18 January 2023, when Tankerska Plovidba (the acquiring company), purchased additional 53,594 shares of TUHO, representing 14.61% of the share capital and 14.74% of the voting rights. With the purchase, Tankerska Plovidba owned 144,272 shares or 39.34% of the share capital which required them to announce the takeover bid for all the remaining shares. The official takeover bid announcement by TUHO should be published in the next couple of days.
The takeover price amounts to EUR 610.53 (HRK 4,600) per share. This price represents a premium of 4.98% on the 3-month VWAP or 11% on the 1-year VWAP.
The takeover price translates into a double-digit 10x EV/EBITDA multiple. The multiple comes as justified especially taking into account that the implied multiple is on average 18% above Croatian’s tourist large caps (Valamar, Maistra, Plava laguna) and that the market is operating in the midst of a challenging macroeconomic environment.
Today, we decided to present you with a brief overview of CROBEX constituents’ free float as all constituents published their FY results.
In our analysis we considered free float to equal all individual shareholdings lower than 5%, while pension funds and UCITS funds were considered as free float regardless of their shareholding percentage.
In our analysis we considered free float to equal all individual shareholdings lower than 5%, while pension funds and UCITS funds were considered as free float regardless of their shareholding percentage.
Source: ZSE, InterCapital Research
9 CROBEX constituents have a free float higher than 50%, indicating that 50% of CROBEX constituents are still held by a small group of majority shareholders. Of the constituents, two companies have a free float of over 90% – Ingra with a free float of 93.6% and Adris (preferred) with a 91.5% free float.
On the other hand, only ZABA has less than 10% of free float. ZABA has a free float of 3.8% and is almost completely owned by Unicredit 84.48% and Allianz 11.72%. ZABA is followed by FTB Turizam and Plava Laguna with a free float of 13.6% and 15.8%, respectively.
The prime market is the most demanding market on the Zagreb Stock Exchange regarding the requirements set before the issuer. It is worth noting that it requires the issuer to have a free float of at least 35%. If we were to compare CROBEX to that parameter, a few of the constituents would not meet the criteria (ZABA, FTB Turizam, Plava Laguna, Brodogradilište Viktor Lenac, HPB and Jadroplov).
If we were to calculate the free float of CROBEX constituents while excluding pension funds, the results would be slightly different for some, but significantly different for the majority of companies.
At the end of January 2023, the NAV of the Croatian mutual funds improved slightly MoM, growing by 0.2%. However, on a YoY basis, this would still imply a decline of 22.7%. Overall, the NAV amounted to EUR 2.17bn by the end of the month.
Recently, the Croatian Agency for the Supervision of Financial Institutions, i.e. HANFA, published its newest monthly report on the changes recorded by the Croatian capital markets. In this report, we can see data for, among others, the Croatian mutual and pension funds. In today’s brief overview, we’re bringing you the mutual funds’ performance. In January 2023, the NAV of Croatian mutual funds amounted to EUR 2.17bn, representing an increase of 0.2% MoM, but a decline of 22.7% YoY. Furthermore, compared to the pre-COVID-19 maximum, this would imply a drop of 30%.
Moving on to the changes recorded by the asset classes, on an MoM basis, the largest absolute increase was recorded by share holdings, which increased by EUR 28m or 10.1%, followed by the money market, which grew by EUR 26.6m, or 74.4%. On the other hand, deposits & cash recorded a decline of EUR 17.7m, or 4.7%, while bond holdings decreased by EUR 15.9m or 1.2%. Before giving any conclusion as to what led to this effect, one should also take into account the net contribution movements in the funds. After all, there are several ways that any of the asset holdings can increase in value during the month: firstly of course, the increase in the inherent value of the underlying assets, such as shares in funds that invest in shares, shares, and bonds in funds that invest in both of these assets types, etc. Secondly, the increase of net contributions into any of these fund types. Lastly, the decision of fund managers to invest more or less into a given category of assets. In this light, the net contributions also have to be considered. In total, they amounted to a negative EUR 26.5m, implying that there were more people selling their stakes in the funds than there were people entering the funds. Breaking this down further, Equity funds recorded a modest EUR 3.2m increase, Bond funds recorded a notable EUR 52.4m decrease, while the Other fund category recorded an increase of EUR 24.6m.
Having all of this in mind, several things can be noted. The increase in share holdings is primarily due to the global sentiment in January, when many European and Croatian companies recorded growth, as it became evident that the energy crisis might not be as bad as it first seemed, inflation might stabilize, and the feared recession might not be as bad as it first seemed. Furthermore, the decline in deposits & cash can be contributed to the fact that people put a lot of money into their deposits in the months leading up to the introduction of the Euro, and after its implementation in January, people were using their stored cash in other ways. Lastly, the decline in the bond holdings can mostly be attributed to the redemptions of stakes in the bonds, which is quite evident if we look that the bond funds lost EUR 52.4m of their value from redemption, and only EUR 15.9m overall, implying that the lower loss comes from positive results from these funds.
Taking a look at the yearly data, however, tells us that the overall trend hasn’t changed much. Most asset classes recorded a decline in value and the ones that didn’t only record tiny increases. In absolute terms, bonds and deposits lost roughly the same amount, at EUR 304m (-19%) and EUR 303.4m (-46%), respectively. Following them, we have share holdings which lost EUR 47.1m (-13%), and investment funds, which lost EUR 22.8m (-11%).
Total assets of Croatian mutual funds (2015 – January 2023, EURm)
Source: HANFA, InterCapital Research
Next up, taking a look at securities and deposits, both domestic and foreign, we can see that in total, they increased by EUR 10.6m (+4%) MoM, but declined by EUR 54.3m (-17%) YoY, amounting to a total of EUR 266.3m. Of this, domestic securities and deposits amounted to EUR 135m (50.7% of the total) and had recorded a tiny increase of EUR 868k (+0.7%) MoM, while foreign deposits increased by EUR 9.7m (+8%). On a YoY basis, domestic securities and deposits declined by EUR 58m (-30%), while foreign securities and deposits increased by EUR 3.8m (+3%). This data further shows us that the main drivers of growth in share holdings in the Croatian mutual funds are foreign investments, while domestic ones are still lagging, especially on a YoY basis.
Finally, taking a look at the current asset structure of the funds, bond holdings still maintain the largest majority, at 58% of the total, representing a decrease of 1.6 p.p. MoM, but an increase of 3.1 p.p. YoY. Following them, we have deposits and cash at 16.2%, with a decrease of 1.1 p.p. MoM, and 6.7 p.p. YoY, and shares, which hold 13.8% of the total assets, an increase of 1.1 p.p. MoM, and 1.6 p.p. YoY. Lastly, the only other noteworthy asset holdings are the investment funds, which hold 8.7% of the total, remaining unchanged MoM, whilst increasing by 1.2 p.p. YoY.
Current AUM of the Croatian mutual funds (January 2023, % of the total)
Source: HANFA, InterCapital Research