The Spanish stock market is opaque white again. MásMóvil has put on the table 11.17 euros for each of Euskaltel’s shares and analysts bless the offer. However, there are many who believe that the most convenient thing is to make cash now taking advantage of market rallies and not even waiting for the offer to be formalized.
In these first months of fragile economic recovery, money moves fast in the market. Therefore, several analysts they choose to make cash as soon as possible taking advantage of the ‘calentón’ of Euskaltel and allocate the investment to alternatives with more upside potential. Even ending up being the target of a new corporate operation.
Within the same telecommunications sector, although already beyond the borders of the Spanish stock market, some investment firms they keep seeing opportunities. In other sectors, without the need to go to international positions, there are still strong candidates to participate in such a process. Do not forget that over the last year they have been announced or executed no less than six takeover bids on Spanish listed companies.
No counter in sight
Invertia analyst Eduardo Bolinches believes that what happened in Euskaltel already “it’s a box and something else.” In addition to remembering that during the session this Monday it has even traded above the price offered by MásMóvil, rule out the possibility of a bidding war or an eventual price increase because “the premium is already high and there are not so many players who have shown interest.”
As regards the issue of an eventual price increase, that was the strategy that several institutional investors bet precisely on MásMóvil. Despite his insistence, finally the offer of the funds KKR, Cinven and Providence went ahead successfully and even ended the stock market delisting without modifying your initial bid. Therefore, the experts consulted agree that it does not seem that the script will be different this time.
As if that were not enough, this time the opa born with the approval of the Euskaltel board of directors, good eyes from different public administrations and the acceptance commitment of three of its major investors. These are Zegona, Kutxabank and Corporación Alba, which account for 52.3% of the capital of a company in which the success of the operation is subject to the support of 75% plus one of the shares.
The Bankinter analysis team, led by Ramón Forcada, has no hesitation in pointing out, after “a first analysis”, that “the most advisable thing is to go to the tender offer” given the premium of almost 27% that the bid raises compared to its average price of the last semester. However, it also points to the convenience of “sell to market once the listed price is close to that offered in this operation ”.
Above target price
With the premise that this level has even been exceeded on its first trading day after the purchase was announced, the analysts of the Orange Bank add that “A counterpart seems complicated”. As if that were not enough, the fact that “the intention seems to be to end up excluding the Basque operator from the negotiation”, reduces the possibilities of a possible revaluation after the event driven by the business combination.
From Link Securities, the recommendation is repeated: “The price offered is attractive, so we recommend that shareholders go to the takeover bid ”. Here it should be noted that the 1,995 million euros that MásMóvil has put on the table even exceed the objective consensus assessment given by the analysts who most closely follow its stock and business evolution.
One of the headquarters of MásMóvil.
Its target price is currently at € 10.19 per share, so the offer translates into a premium of 9.6% over this limit. More restrained is the potential predicted by the Renta 4 Banco analysts who left the ceiling for their graph at a lower 10 euros per share.
In this case, the advice of analyst Iván Sán Félix is ”to go to the takeover bid once you get the go-ahead from the authorities.” A calendar that could be delayed due to clearance required habitual of organizations such as the National Securities Market Commission (CNMV), the National Markets and Competition Commission (CNMC), but also the Council of Ministers due to the restrictions in force in strategic sectors on foreign investment.
Here Bolinches points out that “The opportunity cost is brutal” within a market in which volatility, much more relaxed than a year ago, continues to offer opportunities to scratch profitability every day in the market. And that in riskier strategies, because for more defensive profiles, there are many values that still have room for the comeback while Euskaltel would now enjoy a potential downside of more than 8% if its rival finally backed down.
Although this last extreme is completely unlikely, it is true that in the absence of any anticipated war of offers, the price offered by MásMóvil will act as a support for the value.
In this way, analysts predict that the shares will remain very close to the offered price, making opportunistic arbitrage operations impossible. And it is that the 0.45% of margin that its graph left this Monday until the takeover would remain in nothing once the pertinent operational brokerages have been subtracted.