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Sovcomflot made an official common share buyout offer to Novoship’s minority shareholders. The offer price is USD 3.34 per voting share with 7% premium to the current market valuations. Nevertheless, we do not recommend that Novoship’s minority shareholders accept Sovcomflot’s offer because the offer price is lower than our fair value. In addition, this is a unique potential opportunity to participate in the charter capital of the merged company Novoship-Sovcomflot.
On January 10, Sovcomflot made an official common share buyout offer to Novoship’s minority shareholders. The offer price is USD 3.34 per share and the entire company is valued at USD 1.515 bn, with a 38% discount of preferred shares set by independent appraisers. Sovcomplot plans to buy out up to 9.5% voting shares in Novoship and has provisioned approximately USD 120 mn.
We believe that Novoship’s shares are the only unique opportunity for investors to participate in the charter capital of the consolidated shipping company, Novoship-Sovcomflot, which based on our forecasts, is likely to be created not later than in 2009. Our fair value of Novoship's shares is higher than the offer price. We value commons at USD 3.61 per share and the fair value of preferreds are USD 2.23 per share. Therefore, we do not recommend that Novoship's minority shareholders accept Sovcomflot’s offer, despite a premium on the offer price to the current market valuations.
More detailed information about the merger of the two largest shipping companies in Russia, Novoship and Sovcomflot, and the details of the buyout offer to minority shareholders were provided in our daily review on December 10, 2007. Vladimir Sergievskiy
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Novoship
Capitalization: $968 415 600,00
Common shares:
Price: $2,40
Delta week: 0,00%
Delta month: 0,00%
Delta year: -18,4%
Preferred shares:
Price: $0,53
Delta week: 0,00%
Delta month: 47,9%
Delta year: -70,8%
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0.244
0.616
