The Greek privatisation body Hellenic Republic Asset Development Fund (HRADF) said it has accepted the improved offer of Emma Delta Ltd for the acquisition of a 33% stake in gaming monopoly OPAP.
Emma Delta, a Czech-Greek joint venture that was the sole bidder in the final stage of the auction, raised its bid by 30 mln euros to 652 mln (EUR 6.20/share), while the Greek state will also receive 60 mln euros (EUR 0.57/share) in a cash dividend for FY12 corresponding to its 33% stake in OPAP.
“This means that the total financial consideration for 33% of OPAP shares is 712 mln euros (EUR 6.77/share) or a 10% discount against current market capitalisation of 2,389 mln euros,” said Dimitris Birbos, analyst at the Investment Bank of Greece. The stock was last trading on the Athens Stock Exchange (ASE) at EUR 7.49/share.
The winning bidder Emma Delta is a regulated variable equity fund, controlled by Jiri Smejc (66.7% - shareholder of PPF Group) and George Melissanidis (33.3%). The fund’s investors are the Emma Group, KKCG, ICT Group, J&T Finance Group, businessmen George Melissanidis and Christos Kopelouzos, while local media reported that Lottomatica is also participating in Emma Delta.
The HRADF’s independent appraiser has estimated the fair value of 33% of OPAP shares at 650 mln euros (post 2012 dividend). According to OPAP’s business plan for 2013-2022, the company is expected to record net profits of 213 mln euros (EUR 0.67/share) in 2015 (first year of full operation of its new games), which implies a 10x 2015e p/e or a 17% discount against Lottomatica’s p/e ratio for 2015.
“On the whole, we are not excited with the final consideration paid for the controlling stake in OPAP, which will start reaping the benefits from the launch of its new games (VLTs, scratch tickets, state lotteries, internet games) from 2015 onwards,” explained IBG’s Birbos.
“On the positive side, the successful conclusion of OPAP’s privatisation will send a strong message to local and foreign investors that the Greek government is determined to implement the asset sales programme agreed with its creditors, thus further improving investor sentiment for the Greek economy,” Birbos added.
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