Company Name: STX OSV HOLDINGS LIMITED
| Research House: OSK-DMG | Price Call: BUY | Target Price: 2.05 |
Fincantieri’s price for a 50.75% stake of STX OSV (MS7.SG) is “somewhat low” considering the Singapore-listed company’s relatively strong balance sheet, valuing the stock at 7X FY13 P/E, OSK-DMG says.
“This depressed sale price could be primarily driven by the desperation of the STX Group to sell its assets to pare down debts.”
While Fincantieri has lined up finances to acquire the rest of STX OSV, OSK-DMG doesn’t expect the general offer to succeed, noting the $1.22/share price is below the current share price, with the offer likely merely aimed at satisfying Singapore takeover rules; “we view the offer as unattractive to minority holders.”
It adds, Fincantieri might not get the 90% acceptance level needed to take the company private, noting Och-Ziff holds 12%. But it adds, “the change in major shareholder could remove the overhang on the stock and lead to rerating.”
It keeps a Buy call with $2.05 target. It notes STX Group is also looking to sell its STX Pan Ocean (GZ9.SG) holding. The stock is down 6.1% at $1.315. STX Pan Ocean is down 6.2% at $4.37.
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