Senior Credit Analyst, Lucror Analytics

Leonard Law, CFA

Senior Credit Analyst

High Yield Experts

Lucror Analytics

Lucror Analytics is a leading credit and ESG research specialist and a provider of technology solutions for differentiated fixed income strategies. Our roots are in bottom-up fundamental credit analysis with a specialization in high yield corporate credits from Europe, Asia and Latin America. We are one of few research specialists integrating ESG considerations with fundamental credit research through a dedicated ESG platform. Our ESG assessment covers five key criteria: Disclosure, E,S, & G Pillars, Controversies, ESG Impact on Credit and ESG Momentum.

Recognizing the importance and value-add of Factor Investing in fixed income, Lucror developed the Smart Quant Navigator (SQN), an intuitive platform that helps clients devise and implement factor-based strategies ranging from pure quant to active fundamental, with integrated ESG.

Our company has been at the forefront of developments in the fixed income markets, identifying opportunities and consistently delivering new products and value-adding solutions to clients. Lucror has close relationships with the largest and most reputable asset managers, family offices, hedge funds, investment and wealth managers globally.

<p>Lucror Analytics' ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).<br>We assess Ahlstrom's ESG as "Adequate", in line with its Environmental score, while the Social and Governance scores are "Strong". Controversies are "Immaterial" and Disclosure is "Strong". </p>

Lucror Analytics' ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable). We assess Ahlstrom's ESG as "Adequate", in line with its Environmental score, while the Social and Governance scores are "Strong". Controversies are "Immaterial" and Disclosure is "Strong". 

European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<p>Spa Holdings 3 Oy <a href="https://www.ahlstrom-munksjo.com/Media/releases/stock-exchange-releases2/2020/spa-holdings-3-oy-announces-a-voluntary-recommended-public-cash-tender-offer-for-all-the-shares-in-ahlstrom-munksjo-oyj/" target="_blank" rel="noopener">announced on 24 September</a> a recommended public cash tender offer for all shares in <a href="https://www.smartkarma.com/entities/ahlstrom-munksjo" target="_blank" data-smartkarma-citation="entities:29674:1" rel="noopener">Ahlstrom-Munksjo (AM1 FH)</a> . The offer price is EUR18.1 in cash, with a minimum acceptance condition of 90% (with the aim of squeezing out and delisting the company).</p>
<ul>
<li>Therefore the offeror needs acceptances from 84.6% of the float, which is quite high.</li>
</ul>
<p>The offeror consortium will seek to take advantage of Bain Capital know-how to revamp the company and draft and execute a new long term business plan over the next five years.</p>
<ul>
<li>The Ahlstrom family intends to remain as a long-term shareholder, with an increased stake after the offer closes.</li>
</ul>
<p><strong>Recommendation</strong>:</p>
<ul>
<li>It is a friendly offer, with support from the Board and the controlling family, and that has all the chances to succeed.</li>
<li>On a comparables basis, the offer is slightly cheap, but interloper risk seems low given irrevocable undertakings from 35% of the equity capital</li>
<li>The <strong>gross spread is an unexciting 0.55%</strong>, but being <strong>long</strong> seems a low-risk strategy, and there might be a sweetened offer. <strong>Buy on any weakness</strong>.</li>
</ul>

Spa Holdings 3 Oy announced on 24 September a recommended public cash tender offer for all shares in Ahlstrom-Munksjo (AM1 FH) . The offer price is EUR18.1 in cash, with a minimum acceptance condition of 90% (with the aim of squeezing out and delisting the company).

Therefore the offeror needs acceptances from 84.6% of the float, which is quite high.

The offeror consortium will seek to take advantage of Bain Capital know-how to revamp the company and draft and execute a new long term business plan over the next five years.

The Ahlstrom family intends to remain as a long-term shareholder, with an increased stake after the offer closes.

Recommendation:

It is a friendly offer, with support from the Board and the controlling family, and that has all the chances to succeed.
On a comparables basis, the offer is slightly cheap, but interloper risk seems low given irrevocable undertakings from 35% of the equity capital
The gross spread is an unexciting 0.55%, but being long seems a low-risk strategy, and there might be a sweetened offer. Buy on any weakness.


Ahlstrom-Munksjö - Spa Holdings 3: Friendly Offer

Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

<p>On 24th September 2020, Finland-headquartered fiber-based materials manufacturer <a href="https://www.smartkarma.com/entities/ahlstrom-munksjo" target="_blank" data-smartkarma-citation="entities:29674:1" rel="noopener">Ahlstrom-Munksjo (AM1 FH)</a> agreed to be acquired by a consortium of investors consisting of Bain Capital and current top shareholders Ahlström Capital, and Viknum AB and Belgrano Inversiones. </p><p>Following the completion of Transaction, Bain Capital is expected to indirectly own 55% while  Ahlström Capital and Viknum will hold 36% and 9% respectively. </p><p>The transaction is structured as a Tender Offer and the Offer Price will be EUR18.10 per share in cash. However, if Ahlstrom-Munksjö distributes a dividend, including the dividend payments resolved by the AGM in Mar 2020 (payable in October 2020 and January 2021 as shown below), the Offer Price will be reduced accordingly on a "<em>euro-for-euro</em>" basis. </p><table class="table table-striped"><tbody>
<tr>
<th style="width: 180px;"><h3>Ex-Date</h3></th>
<th style="width: 179px;"><h3>Pay Date</h3></th>
<th style="text-align: center; width: 184px;"><h3>Amount</h3></th>
<th style="text-align: center; width: 185px;"><h3>Payment</h3></th>
</tr>
<tr>
<td style="width: 180px;">Dec-30-2020</td>
<td style="width: 179px;">Jan-11-2021</td>
<td style="text-align: center; width: 184px;">0.13 (€)</td>
<td style="text-align: center; width: 185px;">Cash</td>
</tr>
<tr>
<td style="width: 180px;">Oct-01-2020</td>
<td style="width: 179px;">Oct-09-2020</td>
<td style="text-align: center; width: 184px;">0.13 (€)</td>
<td style="text-align: center; width: 185px;">Cash</td>
</tr>
</tbody></table><div class="content-caption">Source: Capital IQ</div><p>The Offeror expects to publish a tender offer document with detailed information on the Tender Offer on or about 23rd October 2020 and the Tender Offer is expected to be open from 23rd October 2020 to 4th January 2020. The delisting of the shares is expected to be completed in 2Q 2021. </p><p>At the time of writing, the company's shares are trading quite tight to Terms. </p><p><em>As always, there is more below the fold. </em></p>

On 24th September 2020, Finland-headquartered fiber-based materials manufacturer Ahlstrom-Munksjo (AM1 FH) agreed to be acquired by a consortium of investors consisting of Bain Capital and current top shareholders Ahlström Capital, and Viknum AB and Belgrano Inversiones. Following the completion of Transaction, Bain Capital is expected to indirectly own 55% while  Ahlström Capital and Viknum will hold 36% and 9% respectively. The transaction is structured as a Tender Offer and the Offer Price will be EUR18.10 per share in cash. However, if Ahlstrom-Munksjö distributes a dividend, including the dividend payments resolved by the AGM in Mar 2020 (payable in October 2020 and January 2021 as shown below), the Offer Price will be reduced accordingly on a "euro-for-euro" basis. 

Ex-Date
Pay Date
Amount
Payment


Dec-30-2020
Jan-11-2021
0.13 (€)
Cash


Oct-01-2020
Oct-09-2020
0.13 (€)
Cash

Source: Capital IQThe Offeror expects to publish a tender offer document with detailed information on the Tender Offer on or about 23rd October 2020 and the Tender Offer is expected to be open from 23rd October 2020 to 4th January 2020. The delisting of the shares is expected to be completed in 2Q 2021. At the time of writing, the company's shares are trading quite tight to Terms. As always, there is more below the fold. 

Ahlstrom-Munksjo (AM1 FH): Tender Offer Trading Tight - Will There Be Bumpitrage?

Finland

Ahlstrom-Munksjo Oyj supplies industrial paper. The Company distributes decor papers, diagnostics equipment, coatings, beverage packaging products, primer foils, health care materials, graphic papers, tapes, wall coverings, and other fiber based materials. Ahlstrom-Munksjo serves customers worldwide.

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Ahlstrom-Munksjo Oyj (AM1 FH)

Ahlstrom - ESG Report - Lucror Analytics

Lucror Analytics' ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable). We assess Ahlstrom's ESG as...

Lucror Analytics

Ahlstrom-Munksjö - Spa Holdings 3: Friendly Offer

Spa Holdings 3 Oy announced on 24 September a recommended public cash tender offer for all shares in Ahlstrom-Munksjö Oyj.

Jesus Rodriguez Aguilar

Ahlstrom-Munksjo (AM1 FH): Tender Offer Trading Tight - Will There Be Bumpitrage?

Ahlstrom-Munksjo (AM1 FH)

Janaghan Jeyakumar, CFA

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