Tuesday April 23, 2013 : OPAP SALE: PRIVATISATION BODY RECONSIDERS ITS POSITION (Update)
 
One bidder left, and it’s a disappointingly low offer
 
The news Monday that U.S. activist investment fund Third Point had been disqualified from the sale of Greek gambling monopoly OPAP means that only one bidder is left in the race…and the offer from that bidder is disappointingly low.
 
Third Point fell out of contention when it was disqualified because it insisted on a right to re-sell its shares to other investors at any point in the future, according to Reuter reports quoting an unidentified official close to the sale.
 
The Greek privatisation body supervising the disposal of OPAP, in which the Greek government holds a 33 percent stake, is now asking sole remaining bidder Emma Delta to reconsider and up its offer…and it has until Thursday morning to do so, Reuters reports.
 
The Greek-Czech investment fund made a bid of Euro 622 million, less than the circa Euro 740 million market value of the stake in the company that is on offer. Greece's advisors National Bank and Deutsche Bank have estimated the value of the 33 percent OPAP stake, plus management rights, at Euro 610 million, but an independent adviser put the value at a minimum Euro 650 million.
 
The Greek government wants to sell-off its interest, but the process attracted little market enthusiasm and few bids, probably due to the bad economic climate, and legal, tax and EU non-compliance problems surrounding the gambling monopoly.
 
Emma Delta may have room to up its current offer, which represents a discount of 16 percent based on OPAP's closing share price of 7.08 euro on Monday.
 
Insider sources told Reuters that the government's stake in OPAP would not be sold under Euro 650 million.
 
Despite the Greek financial crisis. OPAP is free of debt and the nation's most profitable company by far, with a return on equity ratio of 49.2, according to ThomsonReuters data. It generated free cash flow of Euro 531 million last year.