The deadline for the Rovio tender offer (EUR 9.25) is approaching on July 3, 2023 (next week Monday).
A better offer does not seem to be coming, and Mr. Market is starting to lose hope for one, judging by the price chart over the past month.
On the other hand, there are no signs of this offer falling through either, as nearly 50% of the major shareholders were already behind the tender offer (provided that a significantly higher competing offer does not emerge).
Average price so far today = EUR 9.11
Tender offer = EUR 9.25
Market price difference vs. offer for a 1,000-share position:
-1,000 x (9.25 - 9.11) = EUR 140 + trading costs of approx. EUR 7â10
-(9.25 - 9.11) / 9.25 = 1.5% difference
Each person must consider how long they are willing to wait for EUR 150 / 1,000 shares.
Soon after July 3, information will likely be released, providing certainty that the process is moving forward quickly, which will narrow the gap between the market price and the offer price. Of course, there is always a risk that the deal might not proceed or that it will be delayed.
Alternative investment opportunities might also tempt one to sell now, if one thinks that a bargain price for some other stock might no longer be available next week.
Sega has not yet announced anything regarding the regulatory approvals related to the tender offer; usually, a stock exchange release is issued as soon as the approvals required to complete the offer have been obtained.
It seems likely that the offer period will be extended during this week, meaning the process would be delayed by at least 2-4 weeks.
The market indeed seems to have given up on a competing offer; now we are just waiting to see on what schedule Sega gets the deal across the finish line.
I personally consider a competing takeover bid unlikely. In theory, one could emerge, but in the current global situation, a large portion of the employees (who are also owners) have surely expressed a desire to avoid the fate of Seriouslyâselling the company just for the money and then losing their jobs. The Sega deal likely has solid support because itâs a bit of a âfeel-goodâ deal for all parties. Meanwhile, other potential buyers are viewed with inherent skepticism (especially Playtika), and this is certainly known in potential buyer circles, which limits the enthusiasm to place a bid. This likely came to light while the deal was being negotiated behind the scenes. I should note, however, that this is purely my own speculation. Or perhaps an educated guess, based mainly on word from a little bird that they would have left immediately if Playtika had been the buyer (a former Seriously employee).
I have also heard that some intend to deliberately stall their sale in the hope that Sega will be forced to raise its offer. I consider the likelihood of this scenario to be moderate. I am fairly certain, however, that Rovio will eventually end up with Sega.
So, if youâre looking to squeeze some profit out of Rovio, thatâs the premise you should build your thesis on. It requires nerves of steel, though, and it might not even happen.
Sega seems to have extended the tender offer by four weeks until the beginning of August, as was speculated in the thread. This means you can still wait with your order if you believe a competing bidder might emerge⊠although based on my experience, all shareholders usually get to enjoy any price increases regardless of whether they have already accepted or not.
Have you guys already accepted the âŹ9.25 cash offer? The offer period ends next Monday at 16:00, and the estimated probability of a competing offer is 0.001%.
This kind of promotional pamphlet was sent to an owner of just one share (I sold my position on the first buyout rumors) after the offer period was extended, so they were likely nowhere near the 90% mark even a month ago.
96.3% is an impressive haul for the first round, and the money will be paid as early as August 17th, which is in just 9 days. Fast action, as no competing bidder emerged.
The Offeror will confirm and announce the final result of the Offer on or about August 10, 2023. If the final result of the Offer confirms that the Rovio Shares tendered in the Offer represent, on a fully diluted basis, more than ninety (90) percent of all issued and outstanding Shares and votes in Rovio, and all other conditions for the completion of the Offer set out in the terms and conditions of the Offer have been fulfilled or waived at that time, the Offeror will complete the Offer in accordance with its terms. If the Offer is completed, the offer consideration will be paid on or about August 17, 2023 to each Rovio shareholder and option holder who has validly accepted the Offer and has not validly withdrawn it.
The recount mostly held up, and 96.3% of shares were validly tendered.
Next batch: acceptance must be given by Aug 25 at 4:00 p.m., and the money will arrive approximately on Sep 6.
According to the final results of the Offer, the 73,397,174 Rovio Shares validly tendered in the Offer represent approximately 96.3 percent of all issued and outstanding Rovio Shares and votes. In addition, 100 percent of the Options have been tendered in the Offer. Since the Minimum Acceptance Condition and other conditions for the completion of the Offer have been met, the Offeror will complete the Offer in accordance with its terms.
The Subsequent Offer Period begins on August 11, 2023, at 9:30 a.m. (Finnish time) and ends on August 25, 2023, at 4:00 p.m.
The Offeror will announce the preliminary percentage of Rovio Shares validly tendered during the Subsequent Offer Period approximately on August 28, 2023, and the final percentage approximately on August 30, 2023. The Offer Consideration will be paid to each shareholder who has validly accepted the Offer in accordance with its terms during the Subsequent Offer Period approximately on September 6, 2023.
So, if you have plenty of idle cash, the aforementioned interest would be available, if I calculated correctly.
Buying cheaper and later would naturally yield a better return.
Higher trading costs result in a poorer return.
The return should be almost certain; though of course, you can earn more on the stock exchange with successful trades, or lose money instead. The last month on the Helsinki Stock Exchange was +0.82%.
So, this game seems to be more for âbig moneyâ players who have idle cash and negligible trading costs.
I must say that I am slightly disappointed that no bidding war emerged, and in my opinion, the offer doesnât do justice to such a great brand; perhaps sentiment also played a part. The market also clearly expected a follow-up to the offer at first, as the share price hovered above the tender offer price for quite a while. Thanks to Angry Birds for a journey together that was, at least for me, financially profitable
Rovio reported that 96.3% of the shares were validly tendered.
However, Morgan Stanley flagged that the 5% threshold was indirectly exceeded on August 10.
Apparently, they held nearly 5% and had some share loans returned?
Although the dayâs close was a moderate 9.235 EUR on a volume of just a few hundred, the daily average price was as high as 9.27 EUR and the turnover reached 761 kEUR. Over 25,000 shares were traded at 9.30 EUR or higher.
I would guess that this is a case of so-called fixed-income investments. Since the redemption procedure is now underway, you receive penalty interest (currently 4% p.a.) on the shares according to the Interest Act for the duration of the redemption until the day the redemption is completed and the shares are transferred to Segaâs control.
If someone has a lot of cash and their rules mandate investing it only in equities, these redemption procedures are one of the few ways to get a completely zero-risk return with stocks. So if, for example, a portfolio manager of a pure equity fund has a bearish view, they can park cash in these, making a guaranteed small return with zero risk. This year, it has been quite normal for shares to sometimes be traded at slightly above the tender offer price while the redemption process is ongoing.
I wonder how quickly you could get your money out of this if you bought from the exchange now? You could pick up a pretty good-sized chunk at 9.175 immediately.
How are the remaining squeeze-out shares processed when the voluntary sale in August was missed? Do I need to send a message to the Redemption Board of the Finland Chamber of Commerce, or will they handle it automatically and the money will be paid into the account?
How much will one eventually get for these Rovio shares? 9.25 was the official redemption price, the price is now 9.33 and it seems like many are still adding to their positions above the redemption price.
Trading is likely to be suspended during January, so there is still a bit of time to buy an âoptionâ on the price increasing in court (though this is very rare). Additionally, by buying now, you still get interest for the redemption period; I calculated that the redemption price (âŹ9.25) + interest would correspond to a share price of 9.45â9.50, but this also depends on when the payment (the so-called undisputed portion = âŹ9.25/share) finally hits the account. At its fastest, it has arrived in about 20 days (e.g., Avidly, Kotipizza) from the suspension of trading, and at its slowest, it has taken up to 100 days (e.g., Next Games, Basware).
