VARD/ STX OSV

VARD/ STX OSV: After adopting its new brand name VARD on 5 Mar, counter seems to have retreated to the current price of $1.225. The offer of $1.220/ share by Fincantieri will remain open till 5.30pm on 13 Mar. Vard's independent financial advisor EY has recommended shareholders to reject the offer from the Italian shipbuilder, noting that there are generally insufficient compelling reasons to recommend the acceptance of the Offer. The most recent dealings disclosure today saw Och-Ziff currently still holding on to 5.80% stake, who previously held a 12% stake before Dec 2012. The mystery would boil down to whether Fincantieri could accumulate from its new stake of 50.75% on 24 Jan from STX Europe, to a level of 90% to take the Vard Group private. The story of Fincantieri is that the Group plans to launch an IPO, planned by an economic document of the Italian govt in 2008, but neither the Group nor the Govt admits that the dossier is still on the table. Irregardless of a 50.75% or 90% stake in Vard, Fincantieri could fully account for Vard's sales and assets on its own financial statements. Vard trades at 7.3x trailing P/E, slightly adjusted upwards following its recent dismay FY12 results, but still much lower than industry peers of between 7-17x P/E.