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STX OSV General Offer Ends

03.14.2013 · Posted in Dividend Stocks, Singapore

After a couple of weeks of turmoil, the STX OSV saga has finally come to an end. The results are not unexpected with majority of the public investors rejecting the general offer of $1.22.

 

img stx osv general offer results

 

Fincantieri only got 4.88% acceptance of the offer, bringing its total ownership to 55.63%. Most of the shares tendered were by OZ fund, which is interesting especially since they said the offer value was too low.

Now that the general offer is over, the uncertainty over delisting is removed and investors can focus on the core value of STX OSV. The current stock price is still too low compared to overall valuations, so we should see the stock price correct over time.

Other than looking at new book orders, we also need to see the direction the new owner is setting for the company and new dividend payout policies.

By the way, the name has been changed to Vard which is adapted from Norwegian name “Varde” which refers to a small tower of stones used since ancient times as a navigation mark along the coast to guide ships, the name embodies the Company’s maritime heritage and long history in shipbuilding.

 

For further reading, you may be interested in:

Ernst & Young Report Recommends STX OSV Shareholders to Reject $1.22 Offer

STX OSV FY 2012 Results

Reject STX OSV Offer At $1.22

Investing For Passive Income Basic Course Singapore 16th March Saturday

My Singapore Stock Portfolio End February 2013

Comments on Straits Times Article Growing Hunger For Business Trust

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46 Responses to “STX OSV General Offer Ends”

  1. Hi Calvin,

    Any idea what does COB mean when credit sussie discard 50mil of the share? I does not understand what is happening when they have at one time more then 5% holding and now less then 5% again? it so sudden.

    How does stx recognise revenue. Base on progress of building or one time full recognise when vessel is delivery?

    Sam

    • Hi Sam, looking at all the reports, it seems like CS could be acting for Fincantieri to get the 50mil shares from OZ fund and then sending it over to Fincantieri. The reports are somewhat confusing, but I think we will get a clearer picture of the new shareholder structure when the dust settles.

      For revenue recognition, read the annual report for more details. It’s based on percentage completion method.

  2. John Liu says:

    Why do you think price keep dropping ?

    • Hi John, the stock price has just been generally stagnant even after the general offer failed. Some reasons might be that the OZ fund is still offloading their shares, which we can no longer know as they own less than 5% now. Another reason is that the stock currently lacks catalyst to drive the stock price. Perhaps announcing a new book order win can give the stock price some legs to run.

  3. Charles Ng says:

    What is a reasonable target price for this stock?

  4. John Liu says:

    Price is constantly dropping to the offer price now. Are you still holding your position or should cut loss?

  5. Hi Calvin,

    Do you think that north korean will go to an all out war with South? This will have significant effect on the market

    sam

    • Hi Sam, I think it is still too early to say, it could be a bluff, but it could also escalate. If a war breaks out, then the market will most probably be negatively affected. For the time being though, I am not too concerned about it.

  6. Hi Calvin,
    Thank you for your prompt reply. I would like to ask if you will still continue to add more stxosv if it keep on dropping and getting attractive?

    Once again thanks.

    • Hi Sam, I may consider if it continues to drop, but so far it is still hovering around the offer price. One thing I also would like to see is the new direction going forward.

  7. Hi Calvin, will you be attending their AGM this coming 23th April ? Do really feel like going to get a sense of what the new owner’s vision for this “undervalued” company. It feel strange when I observed people/major shareholders shorting their lots and depressing the price north further. Wondering if there is any insider news on this ?

    • Hi lincoln, I would like to go but I would probably be out of the country on that day. I will just have to look at the presentation after that. Among the questions asked will definitely be their direction for the company and why the stock price continues to be low even after the general offer has failed. Let’s see how the management responds to that.

      We also would want to know the market outlook for OSV book orders going forward. It’s definitely not expensive in valuation, but oil & gas is cyclical and the US shale oil deposit boom could have a negative impact on oil prices.

  8. hello calvin
    I was reading an article STX OSV recently,analysts expect this share to have an upside of 48% from current price of $1.23 to $1.82 and so I bought another 10 lots..:)
    are you still holding this share?

  9. Hi Calvin,

    Just wondering whether the selling has stopped for STX? It is below offer price recently.

    Thanks

  10. John Liu says:

    It looks like its progrssively dropping. What’s your take?

    • Hi John, I am still holding on, it’s just the market sentiment in my opinion. STX OSV is not the only one that is dropping, plantation stocks have dropped significantly as well.

  11. Sweetpea says:

    Hi Calvin, noted that STXOSV share price has dropped to 1.195. Do you think it will drop even further and what could be the cause for the dip? Are you considering or already adding more to your current portfolio? Thanks!

    • Hi Sweetpea, I am not too concerned about the stock price dropping, in fact, I added on to my position :)

      Remember that valuation is not the same as price. Price is what you pay, value is what you get. I just think there is uncertainty in the direction of new owners, lack of catalyst and general poor market sentiment. The best time to buy is always when everybody is in fear.

  12. Hi Calvin, was just wondering if you know the reason behind the recent fall in prices of STX, as it doesn’t seem logical that it is fall beneath its 1.22 mark. Thanks

  13. Could it be some bad news that we do not know yet? That is why I choose not to average down even though it is further under valued.

  14. Hi Calvin,

    1.Will you be attending the AGM coming tuesday?
    If so, are you able to give us a summary of the coming direction from the new Shareholder?

    2.What happen if you are parring down your holding in Vard, will you be posting here in your site timely?

    Sam

    • Hi Sam, unfortunately I am overseas so I am unable to attend. As far as I know, Fincantieri will maintain the current direction of Vard. In fact, Vard just signed a letter of intent with Simon Mokster for a new PSV. Hope to see more ship contracts coming along. As mentioned before, I generally don’t issue buy or sell orders, I just update my portfolio over time. However, I see no strategic change in Vard, so I am in for the long haul.

  15. Will anyone that has attend the AGM be kind enough to share some info here?

  16. Hi Calvin,
    Vard’s price doesn’t look good in the short term. Has been shelving off 0.2-0.3 every other day. Like going back to its IPO price unless major contract are announced, look like a sinking ship.

    • Hi lincoln, I agree that the market sentiment around Vard doesn’t look good in the short term. Looking for the long term though, I am still positive unless there is something funky going on inside. There is some fear that the new owner is driving down the stock price but that is just speculation. Another thing is that OZ fund still has a significant amount of shares, so we do not know how much of the selling is done by them.

      • Hi Calvin,

        The rate at which the stock price for Vard is going down is alarming. Something funky must be going on inside. I suppose Fincantieri, being Italian state owned, must have direct impact on the stock price for Vard. Shaky confidence about the new sworn in coalition government, country trouble by recession and political feuds, recent shooting outside the government headquarters just sum it up. Really see no reason for this stock price to go up. Im vested but still holding on. Time to cash out? Tough decision.

        • Hi Marcus, yup I agree. The rate of the drop is not justified by its fundamentals. Unfortunately, we as retail investors do not have the advantage of knowing what’s actually going on inside the company other than reading their reports and presentations. I am still holding on, but I will only average down at a wider margin.

  17. John Liu says:

    Are you going to add on to your position then?

  18. Hi calvin, did the O&G sector suddenly turn bearish?

  19. STX OSV will now commence trading under the new trading counter name Vard Holdings (SGX-ST: MS7) with effect from today. This follows its acquisition by Fincantieri in Dec last year and the passing of the special resolution to rename itself during its AGM last week. Separately, we quizzed the management on the 4% fall in its share price last Friday, and management replied that it is equally baffled and has not seen any negative developments which could have trigger such a sell-off. If anything, the management is now more excited about the new majority shareholder and the opportunities they would bring. We currently have a BUY rating with S$1.52 fair value estimate, and will provide further updates together with its 1Q results in the coming weeks.(Chia Jiunyang)

    http://www.ocbcresearch.com/Article.aspx?type=market_pulse&id=20130429084124_34754

    • Hi Wee, I think the entire market is equally baffled. Analysts have no reason to change their estimates, so fundamentally outlook remains the same.

      • Hi Calvin, agreed that fundamentally the company is still in good shape. In-fact have taken this opportunity to average down. Thanks.

        • Hi Wee, good to know that there are people who still see fundamental value. Just need enough people to see to prop the price up. Also will be interesting to see the Q1 results.

          • Sir John Templeton “To buy when others are depondently selling and sell when others are buying requires the greatest fortitude and pays the greatest ultimate rewards.”

  20. Charles Ng says:

    Hi Calvin. Yes have run my own analysis and the fall in stock price appears to be quite irrational. But on the other hand, the stock has become more undervalued and certainly, more of a steal than before.

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