STX OSV stock has tumbled 23% from $1.82 on 22 March to $1.395 on 1 June. Photo: Company
Some news reports speculated that the deal would be done in April while others, in May.
According to Maeil Business Newspaper 18 May 12, (South Korea main daily business newspaper), STX Group seems to be close to signing a preliminary agreement to sell 50.75% stake in STX OSV to Italian shipbuilding Fincantieri and private equity firm Carlyle group at around $1.60.
The newspaper said the agreement may be signed as early as the following week. However, nothing was announced during the period.
Next came another report on 28 May on Hellenic Shipping News which quoted a source from Korea JoongAng Daily.
In the report, it mentioned that STX Group is planning to sell the STX OSV which they value at 2 trillion Won for 1 trillion Won.
Based on personal calculation, this amounted to around $1.76-1.83 per share.
The newspaper said the agreement may be signed as early as the following week. However, nothing was announced during the period.
Next came another report on 28 May on Hellenic Shipping News which quoted a source from Korea JoongAng Daily.
In the report, it mentioned that STX Group is planning to sell the STX OSV which they value at 2 trillion Won for 1 trillion Won.
Based on personal calculation, this amounted to around $1.76-1.83 per share.
STX Group added that one Italian shipper and one Singapore shipper have expressed interest.
If this were true, Singapore’s takeover guidelines require any buyer of more than 30% of a publicly traded company to make an offer for the rest of the stock.
Citigroup in a May report speculated that the offer price may be higher 10-20% if the parties want to take STX OSV private.
Notwithstanding the potential takeover, STX OSV has tumbled 23% from $1.82 on 22 Mar to close at $1.395 on 1 Jun vis-a-vis STI's 8.2% decline over the same period.
It seems that the market does not expect the deal to go through that soon or it expects a lower price tag. Given STX Group's existing finances, it should be in their interest to divest its stake in OSV in the near term so as to bolster their finances.
If this were true, Singapore’s takeover guidelines require any buyer of more than 30% of a publicly traded company to make an offer for the rest of the stock.
Citigroup in a May report speculated that the offer price may be higher 10-20% if the parties want to take STX OSV private.
Notwithstanding the potential takeover, STX OSV has tumbled 23% from $1.82 on 22 Mar to close at $1.395 on 1 Jun vis-a-vis STI's 8.2% decline over the same period.
It seems that the market does not expect the deal to go through that soon or it expects a lower price tag. Given STX Group's existing finances, it should be in their interest to divest its stake in OSV in the near term so as to bolster their finances.
For readers who are not familiar with STX OSV, STX OSV has a niche in high end OSV with a market share of 20%-30% mkt share. Market cap is S$1.7b.
The average analyst target price is $1.87.
As usual, the devil is in the details. Readers who are interested can drop me an email at This email address is being protected from spambots. You need JavaScript enabled to view it. and I can send you some useful research reports on STX OSV).
Visit remisier Ernest Lim's blog here.
Visit remisier Ernest Lim's blog here.
Source: Bloomberg
