Monday, November 14, 2016


Parent Fincantieri has returned to the table with its second cash offer at $0.24/share or 4.4% premium to the last close, for the Norwegian OSV shipbuilder.

Back in 2013, Italian-listed shipbuilding group Fincantieri tried to take Vard (formerly known as STX OSV) private at $1.22/share during its heydays, before the oil market took a turn for the worse in 2H14.

Since then, Vard has fallen 90% to a low of $0.124 in Feb 2016, before recovering to its last closing price of $0.23.

The cash offer of $0.24/share values Vard at its historical -1sd of 0.67x P/B. Maybank KE views the offer price as fair in the current environment, where many related peers are trading at 0.3-0.5x.

As at 13 Nov, Fincantieri owns 55.6% of Vard and the offer will turn unconditional upon valid acceptances of over 90%.

In the latest 3Q16 results released late last week, Vard reported a pick-up in activity amid its strategy to reduce its offshore O&G exposure, which could mark a bottom in its valuations.

However, shareholders marred by the experience of seeing their shareholding value dissipate over the past three years and tired of the prolonged depressed state of the industry may consider tendering their shares to the majority shareholder.

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