On July 3 the Acron holding company officially voiced plans to hold a SPO on the LSE. The statement says investors will be offered up to 10% of Acron shares. Dorogobuzh, an Acron subsidiary, with 8.54% of its shares as of last May, as well as other entities controlled by Acron's prime beneficial owner (businessman Vyacheslav Kontor is believed to be the beneficiary) will act as the sellers.
It was earlier reported that the offer price may be set at around USD 150 per share, valuing the entire placement at around USD 715 million and the company's market cap at USD 7.2 billion. A road show for the SPO is scheduled to kick off in mid July, while the bid book is to be closed at the end of this month.
In our opinion, the offer price will act as a benchmark for investors in the immediate future and lend support to Acron's current stock valuations. Floatation of the shares on the LSE is expected to enhance the liquidity of Acron, which will now be adequately estimated on the market. In addition, the successful placement would play into the hand of Dorogobuzh, which should find out the free market price of its share package in Acron and get cash from the sale of its shares, with revenue likely to go to production expansion.
Our target price for Acron (RTS: AKRN) is USD 147.8 per share and for Dorogobuzh common shares USD 1.98 per share (RTS: DGBZ), which, in both cases, implies a significant upside potential and corresponds to a BUY recommendation.
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