Date: January 26, 2017
SIAS has received concerns from minority shareholders of VARD regarding the offer by Fincantieri for VARD. Fincantieri, the Italian state owned ship builder, the current majority shareholder of VARD, with 55.63% of the shares at the time of the offer, has made an offer of $0.24 per share.
Minority shareholders are not happy with the offer. They feel that the offer came at a time when the price of share was improving. Thus the 1 cent premium compared with the pre-offer price does not seem fair to them (previous offer was $1.20 and the current offer $0.24) and the NAV per share is $0.36. Although the IFA report has deemed it as fair and reasonable as it is above the price of the share trading over the past 1 year, minority shareholders feel there is room for improvement on the offer price.
Shareholders are also concerned about the reduction in threshold from 90% to over 50% – thus making the offer unconditional. Also, the recent announcement that VARD has won a contract to build a new cruise liner has pushed the current share price to above the offer price and is now trading above $0.24. There is talk in the market that many shareholders who had previously tendered their shares may withdraw, as the current trading price is above offer price.
While VARD is the subject of the offer, it nevertheless is not responsible for the offer process, but as a listed company, has the responsibility to continue to offer an open ear to its shareholders. However, another concern of minority shareholders is the current debt levels of VARD. This is something that the company can address as it could potentially become a cause of concern for shareholders.
In view of the above concerns on the part of minority shareholders of VARD, it is unlikely the offer will succeed unless the offer price is revised.
SIAS has reached out and called on Fincantieri to consider revising the offer, given the current situation and offered to facilitate discussions between the offeror and minority shareholders. SIAS has yet to receive response from Fincantieri. In the circumstances, it is important for Fincantieri to address the concerns of the minority shareholders directly with the shareholders of VARD.
Founder, President & CEO
Securities Investors Association (Singapore)