Daily analyst comments
Gazmetall announces mandatory buyout offer for Lebedinsky GOK shares
03.08.07 07:52
Gazmetall's mandatory buyout offer for Lebedinsky GOK's minority shareholders underscores Gazmetall's intention to consolidate all assets on its balance sheet on the eve of an upcoming IPO. We also expect Gazmetall to announce a buyout offer to shareholders of other companies in which the company owns a majority stake, i.e. MIkhailovsky GOK and Oskolsky Electric Metallurgical Combine.
The media reported on August 2 that Gazmetall made a buyout offer to minority shareholders of Lebedinsky GOK (RTS: lgok), a parent company in Gazmetall's iron ore division to purchase their shares at Rub 8,015.19 ($314). The cut-off date will be September 14, 2007.
Since Gazmetall and its affiliated business structures currently own over 99.47% in Lebedinsky GOK, minority shareholders are to agree to the terms of this offer. We view the terms as extremely attractive for minority shareholders, since they exceed market valuations and are considerably higher than the price which we determined based on average industry multiples and found it to be $127 per share.
In our opinion, Gazmetall's offer underscores ongoing asset consolidation (possibly, on the eve of an IPO). For this reason, we also expect Gazmetall to announce a buyout offer to shareholders of MIkhailovsky GOK (RTS: mgok) and Oskolsky Electric Metallurgical Combine (RTS: oamk). We believe that the buyout prices for these stocks will outperform the market which will entitle investors to speculative profit.