Kuoni top shareholders say EQT offer price fair
Two of Kuoni Travel Holding’s [SWX:KUNN] top-10 investors said EQT’s CHF 370 per share takeover offer on the company’s listed shares looks fair.
This assessment is based on a first impression, the first cautioned, adding further analysis is required before taking a final decision on whether to the tender or not.
The bid is in line with a sum-of-the-parts (SOTP) valuation carried out by the second investor. In this investor’s model, Kuoni’s two main units, VFS and GTD, are worth about CHF 1.5bn combined, while smaller division GTS is given a CHF 170m price tag. Deducting CHF 180m in pending restructuring costs and CHF 90m of debt, the SOTP valuation stands at around 1.4bn.
A strategic bidder might have had the ability to place a higher offer, a third top-10 investor suggested. He cited sell-side research giving Kuoni a SOTP value of around CHF 400 per share. While there could be room for a better price, the offer on the table does give shareholders a good exit option, he added
Kuoni’s leading visa services business, VTF, was described by two of the shareholders as a good margin, cash flow and growth-generating business. Still, it might have been hard to find a natural buyer for it, considering the sensitive area in which operates, one of them noted.
Booking platform GTD has been squeezed by increasing competition and could have faced major risks from a business perspective in this sense, the third investor said.
EQT also faces some execution risk on implementing its own restructuring plan, which should be considered when assessing the level of the offer, the first shareholder noted.
EQT announced an all cash offer for all registered Kuoni B-shares Tuesday (2 February) morning in an offer worth CHF 1.39bn. The offer has the backing of Kuoni’s board, largest shareholder Hugentobler Foundation and more-than-3% shareholder Veraison.
The Foundation’s 6.25% stake in Kuoni, made up of class-A unlisted shares, is not being sold. The class-A stake gives the Foundation 25% of Kuoni’s voting rights.