Bivideon, which owns a 72% share in České radiokomunikace, launched a buyout offer for Cra minority shareholders at CZK 440 per share today. The offer will be open for five weeks, until September 9, 2004.
As the offer will be unlimited and unconditional, i.e. meets all the legal requirements for an obligatory buyout offer, Bivideon will not be obliged to initiate another offer if the 75% threshold is exceeded. Note that another major shareholder is BACA with a 12% stake and the buyout is being processed by HVB Bank CR. In its announcement, Bivideon says it has not yet decided whether it will initiate delisting of the stock at the next general meeting and emphasizes that the liquidity in the stock could fall substantially after the buyout; we believe that delisting is likely.
While our value estimate for Cra stock is CZK 453 per share, we believe the buyout may be considered by minority shareholders as a preferable option.. Minority-abuse fears and a lack of transparency and credibility have been among the major determinants of the share price recently. These are important factors to consider for those intending not to exercise the buyout option and keep the stock. We reiterate our sell recommendation.
Jan Hajek