RHI Magnesita NV on Tuesday said it was advised by Barclays Bank PLC and Peel Hunt LLC that the offer from Ignite Luxembourg Holdings Sarl to buy a non-controlling minority stake undervalues the company.
The Vienna-based supplier of refractory products said the offer price made by Ignite Luxembourg is lower than the average target price of equity research analysts of GBP 30.73 per share, and therefore noted there can be no certainty whether the offer will be complete.
Back in May, Ignite Luxembourg, a company indirectly managed by Rhone Holdings VI LLC, offered to buy a 20% stake in RHI Magnesita at £28.50 per share in cash.
Rhone had said the offer was ‘an opportunity for shareholders of the company to crystallise their investment in the company as a compelling valuation and significant premium’. Rhone said it will seek representation on the RHI Magnesita board.
The offer values all of RHI Magnesita at £1.34 billion, or at £1.38 billion including a £0.95 per share dividend recently declared by RHI Magnesita.
The financial adviser to Rhone for the deal is Citigroup Global Markets Ltd.
RHI Magnesita has advised its shareholders to decide whether to tender their shares depending on their own individual investment considerations and their own individual circumstances.
Shares in RHI Magnesita were 2,668.00 pence, down 0.1% in London on Tuesday morning.
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