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Carraro, goodbye to the stock market (with controversy)

Albemarle: "Clearly opportunistic operation and for the exclusive benefit of the majority shareholders"

Consob (the Italian Commission of Stock Exchange) has published the document for the takeover bid on Carraro Spa, a Paduan manufacturer of transmission systems for tractors and construction vehicles, aimed at delisting the stock from the stock exchange. The offer is promoted by Fly S.r.l. on 21,331,916 Carraro shares, representing 26.76% of the share capital, at a unitary consideration of 2.40 euros. The total value of the Offer, in the event of full acceptance of the same, is equal to 51.2 million euros. The consideration incorporates a premium of 38.69% compared to the weighted average of the official share price of the last 12 months prior to March 26, 2021, the last trading day prior to the date of announcement of the operation. The acceptance period for the Offer, agreed with Borsa Italiana, will start on May 17, 2021 and will end on June 4, 2021, inclusive and subject to extensions of the Acceptance Period. 

The operation continues despite the complaint of the minority shareholder Albemarle Asset Management, an investment boutique based in London, a shareholder of Carraro through its Irish-law funds with a stake of more than 1% of the capital:

"1. the transaction - as reported in a press release - does not recognize minority shareholders in fact any premium compared to the stock market price of the last trading day before the announcement of the offer (equal to € 2.37), in total contrast both with market best practice and with what has recently occurred on the Italian market with reference to similar transactions (the takeover bid on Isagro had in fact a premium equal to 118% compared to the price of the last trading day before the announcement of the offer; that on Cerved a premium equal to 34.9%; that on ASTM one equal to 28.8%).

2. the price offered is significantly lower than the target prices identified by the sell-side analysts following the share, equal to 3 euros both with reference to Intesa Sanpaolo and Banka Akros as of March 26, 2021, i.e. the last trading day before the announcement of the takeover bid;

3. the price of the takeover bid is cum dividend, so the majority shareholders also want to appropriate the dividend due to minorities and already approved by the board of directors of Carraro last March 26 for an amount equal to € 0.15 per share;

4. the transaction appears clearly opportunistic and to the exclusive advantage of the majority shareholders, as by proceeding with the delisting of the share in the initial phase of restarting the cycle for the reference sectors of Carraro, the majority shareholders want to appropriate the full economic benefits that the strong recovery linked to the exit from the pandemic, now imminent in markets such as the US, will generate for the company, completely excluding small shareholders. On the other hand, the same company reported, on the occasion of the presentation of the 2020 accounts, that "the first half of 2021 shows a growing order book thanks to the positive trend of all the reference markets and overall of the entire industrial world".

The effectiveness of the Offer is subject to the achievement of a minimum threshold of 95% of the share capital, considering the shares already held by the reference shareholders and the treasury shares. 

The Carraro group closed 2020 with a loss of 3.3 million euros, worsening compared to the profit of 8.1 million in 2019 and consolidated turnover down by 13% to 478.7 million.

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