Renault spends $18.35 million to delist Automobile Dacia

1,200 ROL/share or a total of 18.35 million dollars. Less than the minority shareholders had hoped for, but more than the Stock Exchange shares are going for: 1,060 ROL. This is the verdict for one of the past years’ biggest disputes on the Romanian capital market and accounts for the price the Renault group is willing to pay to the small shareholders to pull Automobile Dacia from the bourse.
The price is official starting today, but the takeover offer for delisting Automobile Dacia will be launched after at least 30 days, according to the law.
The minority shareholders will have ten days to challenge the price, provided they hold together 75% of the shares targeted by the offer.
Renault owns 92.72% in Dacia and, irrespective of the outcome of the takeover offer for the 7.28% stake held by the small shareholders, it will be able to delist the carmaker from the Stock Exchange.
The offer price, calculated by PricewaterhouseCoopers (PwC), ignited a fierce debate between Renault and the small shareholders of Dacia last year. The dispute was both formal, in the form of press statements, but also informal, at the lobbying level.
The small shareholders wanted to get a high price so as to be able to sell and not remain captive in the company, while Renault wanted to cut the offer’s price, which could have skyrocketed to 70 million dollars, if the minority stockholders had their way.
The small shareholders, represented by investment funds Broadhurst and Romanian Investment Company (which jointly own 3% of Dacia), initially pushed for a price of 5,000 ROL/share. On the other hand, Renault fought for a price revolving around 1,000 ROL/share.
The 1,200 ROL/share price was offered by Renault after PwC assessed the company’s net asset at 810 ROL/share.
So what do the small stockholders think about the price, after several months of disputes?
“Renault assessed Dacia at about 5,000 ROL/share three years ago, then invested 242 million dollars in the company and then the Romanian state granted various incentives worth 450 billion ROL, and now Dacia has come to be valued at 810 ROL/share?” wonders Cristian Siminel Andrei, head of Broadhurst.
Constantin Stroe, vice president of Automobile Dacia, would not comment on the offer.
Last year, during the dispute with the small shareholders, Renault officials said they could not possibly offer a better price because Automobile Dacia had posted big losses in the past years (77 million dollars in 2001 alone), because of investments and restructuring.
Two months ago, Constantin Stroe had stated the offer price would exceed the face value (1,000 ROL/share).