Anadolu Efes made an announcement this morning regarding its decision to make a cash offer for the entire issued share capital of Efes Breweries International (EBI), other than the already owned 70.22% stake in EBI. The offer will be US$ 2.22 in cash for each EBI share, valuing each EBI GDR at US$ 11.10, implying a US$ 469m company value for EBI. Anadolu Efes would pay US$ 139.7m for 29.78% EBI shares if 100% of the minority shareholders participates in the offer.
Our view:
Anadolu Efes' offer is 28% higher than the closing middle-market price of US$ 8.70 per EBI GDR. Anadolu Efes' offer remains 32% lower than our valuation, which stands at US$ 694m based on a DCF model. If the offer goes through successfully, it would make a 2.5% positive contribution on our Anadolu Efes valuation and increase our target price to TRY 16.45, from TRY 16.10. Moreover, we expect a upward move in EBI GDR that trades at (EBID LI) following the news.