As expected, the Czech SEC approved Bivideon's buyout offer for Cra minority shareholders at CZK 440 per share yesterday. Bivideon, which owns 72% in Cra (another major shareholder is BACA with a 12% stake), intends to launch the offer next week. As the offer, which will last five weeks, 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. The delisting of the stock is likely after the buyout.
While our value estimate for Cra stock is CZK 453 per share, the planned buyout may be considered by minority shareholders as a preferable option, we believe. 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