August 14, 2012 11:13
Mordashov's Highstat makes offer to Power Machines minority shareholders at 4.53 rubles/share (Part 3)
MOSCOW. Aug 14. (Interfax) - The company Highstat Ltd., which belongs to Alexei Mordashov, has made an offer to minority shareholders in OJSC Power Machines (RTS: SILM) for 4.53 rubles per share.
Power Machines, which received the offer from Highstat on August 13, said in a statement that its minority shareholders have 70 days to consider it.
Sberbank of Russia (RTS: SBER) provided the guarantee for the offer.
At the moment, Highstat owns 86.87% of Power Machines' stock.
The offer to Power Machines' minority shareholders is one of the most sustained corporate sagas in the last few years.
Highstat purchased 30.4% in Power Machines from former majority shareholder Interros in September 2007. That fall, RAO UES of Russia selected Highstat as the buyer for its blocking stake in the machine-building concern, but an offer to minority holders was only forthcoming in the summer of 2010, when the average weighted share price had been lower than market price on the date of the offer for six months. Highstat had 70.06% of Power Machines at that time.
At the end of last year, Highstat crossed yet another threshold, after which the majority holder was to have made the offer, having bought a blocking stake in Power Machines from Siemens. Last fall, Highstat received permission from Russia's Federal Antimonopoly Service (FAS) to consolidate all of the stock in Power Machines. But no offer to minority holders was forthcoming since the deal with Siemens was done.
In early February, head of the Federal Financial Markets Service (FFMS) Dmitry Pankin blogged that the FFMS had sent Highstat instructions to make an offer. At that time, Mordashov said that there would be an offer, although he declined to provide any dates, emphasizing the "the issue requires some study." Nor did Highstat name any dates in its written promise to FFMS that it would make the offer.
Just over a month ago, Highstat became the first foreign company to be fined by the FFMS for 250,000 rubles. In commenting on the decision, Pankin expressed hope that the sanction would prompt the company to make the offer.
Major players on the Russian market - Renaissance Asset Management, for example - were among those minority shareholders in Power Machines demanding an offer. The Association of Investor Protection has consolidated the shareholders' position.
Last December, Power Machines delisted its shares from the MICEX-RTS Stock Exchange, which complicated the performance of an appraisal for the offer. Now the company's shares are traded only on the indicative system RTS Board. After information surfaced about the offer, the company's stock soared 11%, with the latest deal being made at $0.139 per share, or about 4.43 rubles.
The offer price is undervalued and Highstat is continuing to violate minority shareholder rights, said the deputy executive director of Investor Rights Protection, Alexander Shevchuk. A shareholder should put up an offer at the average weighted market price for the past half year prior to the delisting. This figure is close to 7 rubles, Shevchuk told Interfax.
Pankin, commenting in March about the situation around Power Machines, said that if there is no market price when an offer is put forward, the company is obliged to bring in an independent appraiser to decide on the price. "If minority shareholders believe that the estimate of the independent appraiser doesn't correspond to reality, they have the right to dispute this in court," Pankin wrote in his blog. In turn, Shevchuk has not ruled out that the minority shareholders could pursue the court option.
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