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HomeValue InvestingPlay Magnus – Chess.com Take-over or take below ? –> Shout out...

Play Magnus – Chess.com Take-over or take below ? –> Shout out for Specialists on Norwegian Take over legal guidelines !!


Background:

Play Magnus is a inventory a few of my readers my keep in mind. I initially invested (speculated) in October 2020 at 16,5 NOK per share, however offered shortly after my preliminary timing was actually unhealthy with a lack of round -20%.

I then purchased once more in November 2020 at the next value (~17 NOKs) . I then managed to promote round 1/3 of the place near the excessive at 38 NOKs per share. This 12 months, i offered the rest of the place shortly after Russia invaded Ukraine to handle portfolio volatility. Total, I made 0,5% on the entire commerce (pre taxes, pre prices) which clearly reveals that my buying and selling abilities are usually not superb.

I nonetheless adopted the inventory as I favored the enterprise, the administration workforce and thought that in some unspecified time in the future in time this could possibly be attention-grabbing. Really I simply talked this Monday with a good friend that at costs under 10 NOK, the inventory appears attention-grabbing.

The inventory chart reveals how unstable the experience from Play Magnus was since its IPO:

Play magnus chart

One other attention-grabbing knowledge level is that “pre Ukraine”, Russian Bilionaire Yuri Millner invested ~10 mn USD into the corporate through a capital enhance at ~18 NOK.

The Chess.com supply

Now just about out of the blue, important competitor Chess.com made a NOK 13 /Share supply which the board of Play Magnus appears to have already accepted in addition to his highness Magnus based on his Twitter Account.

The supply is clearly opportunistic, because it tries to profit from the low costs in the previous few months. Nevertheless they provide a “carrot” to bigger traders:

  • Shareholders proudly owning one % or extra of Play Magnus Group’s share capital as of 24 August 2022 can resolve between settlement in shares of Chess Holdings, LLC, final mother or father of Chess.com – http://chess.com and/or in money whereas the remaining shareholders will obtain settlement in money

So one can assume that the Administration, Magnus and in addition Millner will roll into Chess.com, so for them absolutely the valuation of the supply is much less related however fairly the relative valuation to Chess.com and any “add-ons”.

For small traders and for Funds that aren’t allowed to carry personal investments, that is in fact not optimum because it prevents them from benefiting from a possible restoration. Trying on the shareholder listing from PM’s web site, there is perhaps just a few >1% shareholders who’re possibly not 100% pleased. Particularly because the 1% threshold is predicated on 24.6. holdings, so nobody can construct up a 1% now and roll that into Chess.com.

pm shareholders 2

Then again, I’ve completely no expertise how the Norwegian system works with regard to minority rights and the way excessive the chance is for a greater supply.

On the time of writing, the shares commerce at round 12,60 NOK, so the chance of the bid succeeding appears to be thought of excessive.

Norwegian Take over regulation / Squeeze out and so on

From what I’ve heard, the Norwegian regulation is comparatively minority pleasant. I discovered as an illustration this doc on Euronext which says the next:

A minority shareholder could, inside a specified deadline of at the least two months’ length, object to the supply value and request that the Norwegian courts decide the supply value.

The massive query is: how would a court docket in Norway decide the “honest worth” of Play Magnus ?

Subsequently a shout out to any reader with expertise in Norwegian Take overs: Does somebody have extra expertise how the worth of firms is set by Norwegian courts ?

I’d be actually on this as a way to discover out if this could possibly be a possible particular scenario.



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