Aton Comments on Siemens to Sell 25% Stake in Power Machines
OREANDA-NEWS. August 2, 2011. Power Machines announced that Siemens will sell its 25% stake in the company to structures owned by Alexei Mordashov, the ultimate controller of Power Machines. The price of the stake was not disclosed. Additionally, Siemens and Power Machines are reportedly planning to set up a JV to produce high-output gas turbines that would be 65% controlled by Siemens, 35% by Power Machines.
A voluntary buyout offer is now possible: once the deal is completed, Highstat Ltd will control 95.3% (70.3% + 25.0%) of Power Machines’ capital. According to Russian law, any party which consolidates 75% of a company’s capital must organise a voluntary buyout of minorities.
The voluntary buyout price is the higher of the weighted average share price for the previous six months or the price paid when 75% of the shares were consolidated. According to Bloomberg the weighted average price of Power Machines is RUB9.58/share or 15% higher than the current price (RUB8.35).
The controlling shareholder also has the right to organise a squeeze-out of minorities within six months of the voluntary buyout if he controls more than 95% of the company’s capital. The squeeze-out price is the acquisition price or the preceding voluntary buyout price, whichever is higher.
From the fundamental point of view the removal of Siemens from the shareholding structure is neutral for Power Machines, as Siemens took almost no part in its management.
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