Kreuz

Kreuz: OSK-DMG notes the takeover offer by private equity fund SEA9 by scheme of arrangement is unusual and likely aims to bypass a general offer. The $0.80 per share offer price values Kreuz at a mere 7.4x FY13e P/E, resulting from the interplay between a weak seller and strong buyer. The house believes Kreuz is worth $2.00+ in FY15 and beyond, factoring in growth from the diving support vessels sector. Reiterates its TP $1.16 and DCF value of $2.25 per share. While it recommends shareholders NOT to accept the offer, OSK-DMG notes the combined stakes of Swiber’s and Kreuz’s directors already stand at 73.7%, almost at the requisite 75% to achieve shareholder approval for the transaction. Notes minorities have little chance against the majority and expects the deal to go through anyway.