RHI Magnesita has expressed that the recent tender offer made by Ignite Luxembourg Holdings undervalues the company. However, the company has not given any recommendation to shareholders on whether to accept the proposal or not.
In May, Ignite Luxembourg Holdings offered to buy 9.4 million shares of RHI Magnesita at £28.5 each, which is a 39% premium compared to the closing market price of £20.5 per share last May 26. The offer was extended on June 19 for up to 14.1 million shares, equivalent to 29.9% of issued share capital. Ignite added that if their tender shares, together with those owned, exceed 29.9%, then submitted tenders would be scaled down.
RHI Magnesita noted that even though its organic and inorganic growth initiatives have not been fully realized or reflected in the share price, the premium offered by Ignite is significant. If Ignite succeeds, it plans to request board representation on RHI Magnesita, although it’s not a requirement of the offer.
The tender offer holds a value of about £1.34 billion ($1.70 billion). Meanwhile, RHI Magnesita is urging shareholders to make a decision based on their individual investment considerations and circumstances.