STX OSV

STX OSV: Formal Offer Document released. Recall the offer os $1.22/ share made by Fincantieri on 20 Dec 2012 was 12.9% below last traded price preceding the Pre-Conditional Offer Announcement date; 17.5% below its 3-month VWAP. The views of EY, STX OSV's independent financial adviser and the Company's Independent Directors, on the Offer will be made available latest by 27 Feb 2013. Closing Date of the Offer will be 13 Mar 2013. After the offer made 20 Dec 2012, STX OSV's lowest closing price was $1.255 on 4 Feb- which could be an indication that the minority shareholders would possibly not be interested in participating in the mandatory unconditional offer. Baring that, STX OSV's immediate overhang could be removed and possibly catch-up in valuation terms with its peers. STX OSV trades at 4.6x P/E vs peers of 8-16x. However, Och-Ziff still holds a stake of 8.94%, which the Group has been selling at prices above $1.30; which could pose as the next overhang. This presents a risk of 3% (down to $1.22) vs a minimum upside of 4% (increase to $1.30).