Silmäasema Oyj - thread

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https://company.silmaasema.fi/fi/

https://www.inderes.fi/fi/yhtiot/silmaasema

https://company.silmaasema.fi/fi/suurimmat-omistajat
Largest Owners (February 28, 2019)

  1. Coronaria Oy (22.43%)
  2. Intera Fund II Ky (16.68%)
  3. Mandatum Life Insurance Company Ltd (7.47%)

https://company.silmaasema.fi/fi/listautuminen

Silmäasema’s journey on the stock exchange has been difficult, and the share price has fallen significantly below the IPO price (€6.90). Growth targets have not been met, and the rapid expansion of the network has also eaten into profits due to increased costs. Over the past six months, there have been several changes in the company’s management and leadership team, but the most significant attention has been given to the change in ownership structure.

Coronaria Oy has rapidly become Silmäasema’s largest owner, sparking speculation about a possible acquisition of Silmäasema. At the end of January, Coronaria announced it would sell Coronaria Hoiva to the Swedish company Humana AB for 71 million euros. Coronaria has also been active in corporate acquisitions, which is expected to continue, at least in terms of recruitment. Coronaria’s ownership also includes Medilaser and Coronaria Silmäklinikka (Coronaria Eye Clinic).

Excerpt from a job search concluded on March 3, 2019:

We are looking for an experienced, active, and innovative Business Controller. You are capable of transforming business and business environment analyses into practical actions and are familiar with the principles and practices of corporate acquisitions. The core of your work is to help the business make better decisions, whether they concern sales, production, or corporate restructuring.

Intera Partners invested in Silmäasema in 2014 and remained the largest owner with a 16.68% stake after the IPO. Intera Partners remained the largest owner until November 1, 2018, when Coronaria Oy overtook it. The exit strategy is, of course, not public information, but the most likely buyer candidate can already be found at the top of the ownership list.

Silmäasema is not yet under Inderes’ coverage, but let’s discuss company-related topics here.

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Somehow, Coronaria’s large ownership stake (approaching 30%), its strategy, and the timeliness of Intera’s exit would clearly suggest that Coronaria will buy this out of the stock market. Kauppalehti also had a story about this a month or two ago.

The question is, is Coronaria waiting for the stock to be driven down even lower so they can buy it cheaper? The stock has been hovering around five euros after the buyout rumors without major movements, so the buyout rumors didn’t really get the average investors moving. Will Intera have to take a loss on this? It would be almost a 40% premium to the current price if they could even sell it at the IPO price.

Has anyone else on the forum delved deeper into this case? I’d be happy to hear your thoughts on it.

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Intera listed this at an awful price on the stock exchange and owned close to 70% of the shares before the listing. They bought this from Fennica in 2014. I don’t believe Intera is taking any loss. A rather lousy IPO, as these launched by private equity investors usually are. Only the revenue was inflated and it was listed on the stock exchange at a huge price.

“The preliminary price of Silmäasema shares in the offering is 6.20-7.60 euros per share. This gives the company a market value of 92-105 million euros.” -Arvopaperi

“Finnish private equity investor Intera Partners is acquiring a majority stake in the Silmäasema Fennica group. Intera Partners’ partner and chairman of the board, Tuomas Lang, describes the transaction sum as “tens of millions of euros.” The sum is closer to 50 than 100 million euros, Lang tells Taloussanomat. He does not disclose the exact sum.” -Taloussanomat

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Coronaria’s position in Silmäasema (Eye Station) has been written about quite a bit. In my opinion, the following article summarizes the situation pretty well:

Coronaria itself has commented on the matter rather sparingly:

The sale of Coronaria’s care services is interesting for the overall picture:

The deal between Humana and Coronaria is still under review by the KKV (Finnish Competition and Consumer Authority):

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Silmäasema Q1 Interim Report:

https://www.inderes.fi/fi/tiedotteet/silmaasema-oyj-osavuosikatsaus-11-3132019-silmaaseman-liikevaihto-ja-oikaistu-kayttokate

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Forgot to link this here earlier:

I’d say there’s a pretty high probability that we’ll see bigger changes in Silmäasema’s ownership structure later this year.

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https://www.inderes.fi/fi/tiedotteet/silmaasema-oyj-johdon-liiketoimet-jukka-hienonen-0

Chairman of the Board buying shares:

Volume: 475 Average price: 5.3 EUR
Volume: 1,633 Average price: 5.28838 EUR
Volume: 17,892 Average price: 5.42366 EUR

Doubled his ownership to 40,000 shares.

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https://www.inderes.fi/fi/tiedotteet/silmaasema-oyj-johdon-liiketoimet-jussi-salminen-0

The CEO went shopping too

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https://www.inderes.fi/fi/tiedotteet/silmaasema-oyj-johdon-liiketoimet-martti-kiuru

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https://www.inderes.fi/en/releases/silmaasema-oyj-management-transactions-tapani-kyrki

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https://www.inderes.fi/fi/tiedotteet/silmaasema-oyj-silmaaseman-uusi-strategia-ja-paivitetyt-taloudelliset-tavoitteet

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https://www.inderes.fi/fi/tiedotteet/silmaasema-oyj-silmaasema-oyjn-puolivuosikatsaus-11-3062019-silmaaseman-liikevaihdon-ja

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By the way, today for the first time Silmäasema’s earnings release (H1’19) will be available on InderesTV, and even in Finnish ;D it will be available to watch around 12:30 Silmäaseman tiedotustilaisuus H1'19 pe 16.8. kello 12:00 - Inderes

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Coronaria’s ownership over 30%, makes a mandatory bid for the remaining shares at a price of 6 euros. I wonder if it will go through :slight_smile: The listing price was over 7 euros.

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I was wondering in the morning why there was an order for 10 million shares at a price of 6 euros in the offer levels. This explains it.

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Coronaria Oy has only marginally increased its ownership to 33.21% after the flagging (32.62%) on August 16th. It strongly appears that this is a not-so-friendly acquisition, where they are trying to drive the average price as low as possible and purchases are made in stages. I consider it highly unlikely that this tender offer will go through, and I believe it’s probable that we will see at least one, and possibly even two, more tender offers after this.

  1. Buy everything available cheaply, but enough to “poison” the share capital and deter other potential buyers.
  2. Raise the offer price only enough to acquire the necessary ownership percentage to trigger a mandatory offer at the lowest possible tender price.
  3. Buy everything available from the mandatory offer and the market at that price level.
  4. Prepare for the next mandatory tender offer (over 50% ownership) with an increased offer price. Either (A) set a proper offer price, or (B) continue to milk it and repeat point 3.
  5. If the long route (B) is taken, only at this stage will they seek a valuation at which Silmäasema would completely transfer to Coronaria’s ownership.

https://company.silmaasema.fi/fi/suurimmat-omistajat

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The board of Silmäasema doesn’t recommend shareholders accept Coronaria’s tender offer. This was probably to be expected, as the premium is low.

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https://www.inderes.fi/fi/tiedotteet/silmaasema-oyj-silmaasema-oyjn-hallituksen-lausunto-coronaria-oyn-pakollisesta-julkisesta

Could the next attempt be in July/August 2020? Of course, it could be earlier if only very small percentages come from this.

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Inderes started following Silmäasema:

https://www.inderes.fi/fi/aamukatsaukset/silmaasema-seurannan-aloitus-ostotarjous-luo-erikoistilanteen#mr-modal

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The tender offer doesn’t seem to be appealing:

In accordance with the terms and conditions of the Tender Offer, the offeror has undertaken to report material changes in the number of valid acceptances received in accordance with the terms and conditions of the Tender Offer on a weekly basis. As of the date of this release, shareholders representing approximately 6.3 percent of Silmäasema’s shares have accepted or have, after the commencement of the Tender Offer, given an irrevocable undertaking, subject to certain customary conditions, to accept the Tender Offer in accordance with its terms and conditions. Together with the shares already owned by Coronaria (including approximately 1.5 percent of Silmäasema’s shares purchased by Coronaria on the market at the offer price after the publication of the offer document), this represents a total of approximately 40.2 percent of all shares in Silmäasema.

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