ST Engrg and Neratel

ST Engrg and Neratel: ST Engrg to acquire Nera Telecomms for $0.45 per share in a scheme of arrangement, approx $141.1m. The scheme of arrangement requires 75% of all shareholders to approve. If the scheme does not obtain the necessary approvals, ST Engrg will not proceed to acquire even a single share.

Eltek ASA (owning 50.05% of Neratel) has voted in favour of the scheme. The scheme also requires approval by court. An option in the event of an competing offer has also been made with Eltek allowed to accept a competing offer if the price offered is higher than $0.475 and ST Engrg allowed to make a higher bid.

Neratel’s closing price was approx $0.50 and the offer is approx 10% lower than closing. However we note that the share price has seen a steep rise since start of Feb.

Neratel trades at 13.3x P/E and 3.3x P/B at last closing.