This morning Cefour Wine & Beverage sent out a brief update on the current situation regarding a bid from a Croatian company.
According to Cefour, the company has structured a timetable for the continued due diligence work which includes a further examination of Cefour’s existing contracts and a thorough examination of Cefour’s patent rights on its production lines.
Cefour itself has hired an external consultant who conducts a valuation of the company and its operations. The report is supposed to support the Board in its view on the company’s valuation considering a potential bid from the Croatian company.
The timeframe for the actions mentioned above has been set to three months, i.e. the end of November 2013.
Cefour stated on Tuesday July 30th, that it has been discussed that the bid must be in the region of 0,40 – 0,45 SEK per share, which corresponds to a company’s valuation of about SEK 170 – 195 million. The Croatian company is apparently keen to integrate Cefour’s packaging solution in its existing activities and sees a takeover of Cefour as an opportunity to achieve synergies and access Cefour’s global sales channels with their own wines to reach a global market.
Since the statement on July 30th, Cefour has announced several new interesting contracts. As we speak, Cefour is participating at the ECRM event in San Diego, where selected suppliers have the opportunity to present their products for purchasing managers from the USA and Latin America. According to a previous statement from Cefour’s CEO, his meeting schedule for the event is fully booked and he will present the Easy Wine Glass to companies like Aldi, Walgreens, K-Mart, Delhaize America, Circle K, Woolworths SA, Murphy Oil, Coast Guard Exchange and many more.
Obviously, any new contracts that come out of this event will impact the valuation of Cefour positively, so we will look out for any comments regarding this in the coming days.
In the meantime, Aktietorget is showing its funny face once again as Cefour’s share is trading down on today’s press release. Investors can pick up the share at SEK 0.22 right now, which implies and upside of around 100% to the initially indicated bid level. Today’s statement should, if anything, show that the Croatian interest is for real and given the recent operational development in Cefour and potentially further new contracts following the San Diego event, it seems likely that a bid price will be above the SEK 0,40 – 0,45 level. Risk-reward seems very very positive at this point.