Romanian Fondul Proprietatea’s buyback offer, 13.5 times oversubscribed

The public offer launched by Romanian investment fund Fondul Proprietatea (FP) to buy back 750 million of its own shares (representing 6.03% of its share capital) was 13.5 times oversubscribed.

This means that the fund’s shareholders subscribed to sell more than 10 billion shares of the fund, representing 81% of its total number of shares. The high level of subscriptions was to be expected as the fund pays RON 1.11 (EUR 0.25) for each share which it buys back in this offer, which is 20% above the current market price of RON 0.921 (EUR 0.208) per share (as of December 2, 2014).  The offer closed on December 2.

As the number of shares to be bought by the fund is limited at 750 million, each investor who subscribed in the offer will get to sell only a small portion of his shares, which is 7.42% of the total number of shares which that investor subscribed in the offer. The exact allotment index is 0.0741855191, Raiffeisen Bank, the intermediary of the buyback offer, announced on Tuesday evening (December 2).

The total value of this offer is some EUR 188 million. Fondul Proprietatea’s largest shareholder, American hedge fund Elliott, which holds about 19% of the fund, will probably get around 23% of the money, or some EUR 43 million.

Andrei Chirileasa, [email protected]

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