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 day’s 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 wonder if someone still has open shorts?
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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 Sega’s 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.
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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.
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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 “option” 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 (€9.25) + interest would correspond to a share price of 9.45–9.50, but this also depends on when the payment (the so-called undisputed portion = €9.25/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).
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Trading is expected to be suspended during January, and at the earliest, the money (redemption price + interest) will be in the account in about 20 days, although at its slowest, this has taken over 100 days. Personally, I believe in the quicker payment, as a fair interest rate is currently being paid for the redemption period and stalling becomes expensive.
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So, for what period is this interest paid?
Interest is paid for the period of 22.9.2023 - xx.01.2024, i.e., for about 4 months. The interest rate for 2023 is 7% and for 2024 it is 7.5%. There’s a free lunch on offer here, as you get interest for the entire ~4-month period even if you bought the shares on the last trading day. In this case, assuming the payment reaches your account in about a month, you get an annualized return of around 25-30% on your capital.
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The Evolution Exchange Gaming Podcast featured an interesting interview with Rovio’s CEO Alexandre Pelletier-Normand:
Topics included Alexandre’s background, the acquisition offers from Playtika and Sega, and the near future of Rovio and the gaming industry.
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