After posting my initial investment case at the beginning of 2014, Miba’s management continued to report strong numbers which led to a continous increase in the share price. Consequently, there was little reason for me to provide an update on this investment until now.
In July 2015, management announced an offer to buy out minorities at EUR 550 per non-voting category B share. As already outlined in my original investment case, Miba’s capital structure is somehow complicated. Miba’s share capital is divided into 1.3 million shares. The shares are broken down into 870,000 common shares, 130,000 non-voting shares category A and 300,000 non-voting shares category B. Only the non-voting category B shares are listed. Moreover, at the time the offer was released only 121,233 shares were free float with the rest being held either by the controlling Mitterbauer family or the company.
Obviously, management’s goal is to delist the shares from the Vienna stock exchange. They already announced a squeeze-out at EUR 540 per share taking place after the general meeting in November. However, they also extended their original offer of EUR 550 until November.
For me, Miba’s going private comes with mixed feelings. The offer price is slightly above my estimate of intrinsic value. On the other hand, from my point of view Miba belongs to the very best the Austrian corporate landscape has to offer. Hence, it will be difficult to find an adequate replacement for my portfolio.
Since the announcement of the offer, trading volume has increased substantially. It seems that some market players are speculating on a higher compensation as a result of a potential court proceeding (Überprüfungsverfahren). However, as far as I understand this also implies that they have to accept the squeeze-out price at EUR 540 per share.
Given that shares have been trading around EUR 558 over the last month and that I regard the offer price as fair, I decided to sell my shares at a premium to the offer price in the open market. Assuming that I sold my shares over the last seven trading days at a price of EUR 558, this translates into a total return of roughly 65% over a 19 month holding period.
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