Company Name: STX OSV HOLDINGS LIMITED
| Research House: CIMB | Price Call: BUY | Target Price: 1.47 |
Fincantieri’s $1.22/share price for a 50.75% STX OSV (MS7.SG) stake is a low-ball offer, says CIMB.
“We were surprised at the low sale price, which values STX OSV at 6.5x 2013 P/E and 2.2x 2012 P/BV. Though we understand Korean parent company STX Corp.’s urgency to restructure its balance sheet, the sale price undervalues STX OSV.”
While Fincantieri doesn’t intend to maintain STX OSV’s listing status, CIMB expects the stock to remain listed, given the low price; it notes Och-Ziff’s average cost for its 12% stake was around $1.33/share.
“Though STX OSV could succumb to some near-term selling pressure, we believe its fundamentals could eventually provide support at $1.30-$1.40.”
It keeps a Neutral call with $1.47 target, implying 7.8x 2013 P/E and 2.7x 2013 P/BV. The stock is down 6.4% at $1.31.
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