European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

On 13 September 2021, <a href="https://www.smartkarma.com/entities/ocean-yield-asa" target="_blank" data-smartkarma-citation="entities:22243:1" rel="noopener">Ocean Yield ASA (OCY NO)</a> announced that it had reached an agreement with Octopus Bidco (owned by funds advised by <a href="https://www.smartkarma.com/entities/kkr-co-inc" target="_blank" data-smartkarma-citation="entities:27333:1" rel="noopener">KKR &amp; Co Inc (KKR US)</a>) on the terms of a recommended voluntary offer for all outstanding shares. KKR intends to expand the sale-and-leaseback specialist.
Consideration is NOK 41/share, cum dividend, for an implied equity value (deal value) of NOK 7,186.75 mn (NOK 7,200 mn as reported) and implied EV of 18,789.38 mn. This represents 12.4x EV/Fwd Revenue, 13.2x EV/Fwd EBITDA, 10.9x Fwd P/E and 125.8x deal value/Consensus NAV.
Consideration will be increased with any incremental sales price received for the FPSO Dhirubhai above $19 mn if sold prior to settlement of the offer. If Aker Energy declares the purchase option at $35m, the offer price will rise to NOK 41.74/share.
Irrevocable undertakings from Aker Capital ASA (61.65% stake), and Board members and management holding approximately 2.02%.
Ocean Yield's financial situation continues to be stressed, and gearing is high. Book equity, $668.1 million vs. total assets of $2,132 billion, for an equity ratio of 31.3% at end of Q2. Leverage is 8.4x net debt/EBITDA and EBIT/interest is 7.2x.
In terms of tangible book value for its assets, the offer price represents 1.25x. Comparable companies are trading at a median 1.0x P/TBV, on this basis the offer seems fair.
The market is betting on Aker Energy declaring the purchase option at $35m, thus the offer price will rise to NOK 41.74/share, and the adjusted gross spread is then c. 1.8% (completion expected in Q4).
Although not a terribly exciting spread, it is a done deal. Long OCY OB, TP 41.74.
Some bonds look interesting, more specifically the Ocean Yield ASA - FRN SNR 12/2024, with a 5.32% YTW, but only $87 mn outstanding.

On 13 September 2021, Ocean Yield ASA (OCY NO) announced that it had reached an agreement with Octopus Bidco (owned by funds advised by KKR &amp; Co Inc (KKR US)) on the terms of a recommended voluntary offer for all outstanding shares. KKR intends to expand the sale-and-leaseback specialist.
Consideration is NOK 41/share, cum dividend, for an implied equity value (deal value) of NOK 7,186.75 mn (NOK 7,200 mn as reported) and implied EV of 18,789.38 mn. This represents 12.4x EV/Fwd Revenue, 13.2x EV/Fwd EBITDA, 10.9x Fwd P/E and 125.8x deal value/Consensus NAV.
Consideration will be increased with any incremental sales price received for the FPSO Dhirubhai above $19 mn if sold prior to settlement of the offer. If Aker Energy declares the purchase option at $35m, the offer price will rise to NOK 41.74/share.
Irrevocable undertakings from Aker Capital ASA (61.65% stake), and Board members and management holding approximately 2.02%.
Ocean Yield's financial situation continues to be stressed, and gearing is high. Book equity, $668.1 million vs. total assets of $2,132 billion, for an equity ratio of 31.3% at end of Q2. Leverage is 8.4x net debt/EBITDA and EBIT/interest is 7.2x.
In terms of tangible book value for its assets, the offer price represents 1.25x. Comparable companies are trading at a median 1.0x P/TBV, on this basis the offer seems fair.
The market is betting on Aker Energy declaring the purchase option at $35m, thus the offer price will rise to NOK 41.74/share, and the adjusted gross spread is then c. 1.8% (completion expected in Q4).
Although not a terribly exciting spread, it is a done deal. Long OCY OB, TP 41.74.
Some bonds look interesting, more specifically the Ocean Yield ASA - FRN SNR 12/2024, with a 5.32% YTW, but only $87 mn outstanding.

Energy Expert

Thierry Bros, PhD

Thierrybros.com

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Norway

Ocean Yield ASA provides investments in vessels with the oil-service and industrial shipping industry. The Company charters all vessels out on long term contracts.

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Ocean Yield ASA (OCY NO)

KKR/Ocean Yield: Recommended Offer

A done deal. The market is betting on Aker Energy declaring the purchase option at $35m, thus offer rising to NOK 41.74/share, for a 1.8% adjusted...

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Nomadic Equity

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