So, Nordax came back with a revised offer sooner than I expected. They call it their “best and final” and it’s a minimum raise from the previous one. It surprises me a bit that the board has recommended such a lowball bid, even though it doesn’t seem to have been unanimous.
The possibility of lowering the acceptance to 2/3 is kept, indicating that 1) they are unsure if this offer will get them above 90% and 2) they still like it very, very much at 105, thank you very much. Notably, there is an absence of commitment not to raise the bid, despite the “best and final” language. This leaves wiggle room that wouldn’t be strictly necessary to leave out there if they were extremely keen on forcing the hands of all shareholders (and accepting a higher fail rate).
Nordax has played it smart thus far (hats off), and they are apparently willing to take the long view. Under this strategy it is a real possibility that they take the whole company out in two bites, with the necessary 6 month period in between a raised offer for the remaining shares.
In an interview, NOFI’s chairman seems to hint at the some prospects of a competing bid. I wouldn’t have previously deemed that especially likely, so take that for what it is. The board may switch their recommendation to a higher bid if another comes. Perhaps KKR can inject a bunch of capital into Tine Wollebekk’s new employer Avida Finans and make an offer? That might be a bit fanciful.
Some independent shareholders are still not impressed by 105 NOK.
All in all, this updated bid confirms that there is little downside present. The bid may fail completely, by getting below 2/3, or only halfway get to the 90% and leave a listed stub for the time being. Seeing as to how the Swedish listed peers have performed lately, I see no probable scenario where there is a big price risk in this situation. So only one question remains for today.
O Mr Icahn, Where Art Thou?
PS. In my first post, I said that NOFI’s Q2 report was due today - this was outdated/inaccurate information. It’s due for 13 August.