Minority shareholders in photo booth-to-laundry machine operator Photo-Me International (PHTM) can be forgiven for being confused by today’s news of a mandatory offer for the company by its chief executive officer.
According to the stock exchange, a Singapore-registered investment vehicle called Tibergest, wholly-owned by CEO Serge Crasnianski, has managed to accumulate 36.5% of the share capital and therefore has to make a bid for the rest of the company.
OVER THE LIMIT
Tibergest held 108.8 million shares or 28.8% of the company yesterday, but today it announced it had bought another 29.1 million shares or 7.7% of the capital at 70p, taking its stake above the 30% threshold.
Under rule nine of the Takeover Code, once 30% or more of the shares are owned by a person or a company they have to make a cash bid for the rest of the shares at the highest price paid during the previous 12 months.
Accordingly, Tibergest has offered 75p per share for the rest of the shares in Photo-Me. However, the shares closed at 75.6p yesterday so the offer is at a small discount to the firm’s current market value.
Tibergest points out its offer represents a premium of nearly 16% to the average price of the last three months, but it’s worth flagging that the shares were trading at 77p at the start of August last year when the firm raised its full year earnings guidance, so in reality they have gone nowhere for over six months.
NO STRATEGIC RATIONALE
Tibergest describes its offer as ‘a liquidity opportunity’ for Photo-Me shareholders given the low level of trading in the firm’s shares, but beyond that there is no strategic explanation for the change of control other than the fact the investment firm has broken the 30% threshold.
Confusingly, Tibergest says it doesn’t intend to make any changes to Photo-Me’s business, its assets – including the pension fund – or its employees, yet at the same time it says if its offer becomes unconditional and the company delists from the stock exchange it may reduce the firm’s headcount.
The committee of Photo-Me – excluding Mr Crasniaski and his associate Mr Janailhac – put out a statement on the offer highlighting the discount and recommending shareholders do nothing for the time being.
Photo-Me shares traded marginally higher at 76.2p by mid-morning on subdued volume as small shareholders were no doubt left scratching their heads.