26.10.2017

Zugemailt von / gefunden bei: Baader Bank (BSN-Hinweis: Lauftext im Original des Aussenders, Titel (immer) und Bebilderung (oft) durch boerse-social.com aus dem Fotoarchiv von photaq.com)

Every RHI shareholder gets one RHI Magnesita share for one former RHI share. The new ISIN is NL0012650360.

Baader conclusion

    We confirm our Buy rating. We like to highlight that our base calculation for our current target price of the new company is based on assumptions of an EPS of EUR 4. We also calculated the EPS with the highest possible amount of shares after the end of the transaction. We started with the combined RHI and Magnesita EBIT of 2016, added EUR 40mn growth EBIT and EUR 60mn net synergies to reach an EBIT of EUR 335mn after the integration. We excluded EUR 55mn net interest based on net debt a bit above EUR 1bn at an average coupon of 5.4% and a tax rate of 28%. At the current stage it seems that almost every part of that calculation is conservative. We calculated our target price with a P/E of 10 in 2019. The main peer company, Vesuvius, also listed at the LSE, is currently trading at a P/E of approximately 12 based on its 2019 consensus average.

    We see the main risk in the execution of the integration. This includes, for instance, the transfer of production from Europe to the U.S. including all newly required approvals and licenses and the closure of sites or the upgrading of others on time and on budget. Another risk might be that the management decides for new takeovers before they have shown a successful integration of Magnesita.

Facts & Analysis

    The trading of RHI at the stock exchange in Vienna ended on 25 October with a share price of EUR 35.90. 

    On 26 October RHI merges with Magnesita Refractories and changes the name to RHI Magnesita. RHI Magnesita increases the number of shares from 39,819,039 by 5mn to 44,819,039. Beside the 5mn shares, the major Magnesita shareholders receive EUR 117mn. RHI Magnesita will have a 50% plus one share stake in Magnesita after that transaction.

    On Friday 27 October, RHI Magnesita will start with its first trading day at the London stock exchange. If we calculate the last price in euro with GBP/EUR of 1.12, the share price of RHI Magnesita might start around a level of GBP 32 at the LSE. 

    There will be no 9-months report from RHI on 9 November as the company does not exist anymore. RHI Magnesita intends to give a trading update for the combined company on 13 November.  

    In the coming weeks RHL Magnesita will launch the mandatory offer for the remaining shareholders. They need to get another 2/3 of the outstanding shares to delist Magnesita in Brazil. The entire process might last until mid 2018. RHI guided for a possible to increase of capital by another up to 5 million shares to pay for the remaining outstanding shares. The remaining outstanding shareholders can decide to receive cash and shares, like the two major shareholder, or cash only. The decision how many additional new shares the company has to or will give into the market will be made at the end of the mandatory offer period, most likely in the second quarter 2018. Depending on the decision of the outstanding shareholder, cash or shares, and the management of RHI Magnesita to sell remaining shares at the market, the number of shares might reach approximately 50 million. We have used this “worst case” in our current calculation.

    The numbers on the left and the next side still refer to the former RHI. We will come out with new and consolidated figures after we got first details about the combined structure of the P&L and balance sheet.

RHI © Aussendung

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