On July 10, United Aircraft Corporation (UAC) completed an obligatory offer to purchase Irkut shares. The offer was filed to Irkut on March 24. The offer could be exercised by the company stockholders who owned 49.9% of Irkut common shares. UAC was obliged to present an offer due to the acquisition of more than 30% of Irkut common shares in January. The offer price amounted to RUB 22.28 per share and was calculated as a weighted average cost of company shares on various trading floors in the 6 months before the offer was filed for authorization at the Federal Financial Markets Service (FFMS).
Although UAC offered the smallest possible price pursuant to the current legislation, approx 417.51 million Irkut commons were presented for a buyout, which amounts to 42.60% of the company's charter capital. The right to sell shares was exercised by those shareholders who were not willing to merge to a single share with UAC due to the risk of unprofitable consolidation. Following the offer, UAC became owner of 92.79% of Irkut charter capital. According to a UAC spokesperson, the company does not plan to perform any further consolidation of Irkut shares.
In 4Q 2008, Irkut shareholders are to be given the option to exchange their shares for UAC securities. The terms of exchange are to be disclosed at the same time.
In line with our estimates, the fair value of Irkut common shares is USD 0.72 per share with a 16.7% downside, which corresponds to a Sell recommendation.
260
0.376
