Sanex sale rumour induces 40% gain

The shares of ceramic tile and sanitary ware maker Sanex Cluj-Napoca have soared on RASDAQ during the last two weeks, fuelled by rumours of talks over a sale of the company.

The shares peaked at 1,600 ROL last week, the four-year high, following a rise that made those investing in Sanex shares nearly 40% richer in less than a month.

Where do the rumours that fuelled this growth come from, anyway?

Sanex is controlled by American Romania and Moldova Direct Fund (RMDF) investment fund, which took it over in 2000 to turn it around and sell it to a strategic investor later. Since a fund like RMDF usually stays four or five years with a specific company, the search for a buyer for Sanex might start this year.

Word about strategic investors interested in Sanex had spread on the market as early as late last year, but the signal for the growth over the last couple of weeks came from Societatea de Investitii Financiare (Financial Investment Company – SIF) Muntenia, which bought another 3% in the company last month.

Furthermore, Sun Earth Ceramics, the Indian company that invested side by side with RMDF in Sanex through Goodison Holdings financial vehicle, announced through its chairman Suresh Motwani two weeks ago that it was selling its Romanian and Spanish interests. Motwani made this statement during an interview for the Indian news agency Mumbai Newsline.

Sun Earth Ceramics was said to be looking to sell its stake in Goodison and in Sanex implicitly as early as last year. These plans were caused by the problems experienced worldwide by this group, the leading ceramic tiles producer in India.

Sanex officials have not announced anything in this regard so far, although rumour on the market had it the Indians were already out of this business.

“There are no talks over a sale to any strategic investor. Sun Earth Ceramics is not involved in Sanex. As for SIF Muntenia’s decision to increase its stake, I only know that there was indeed a larger stake out there on the market and they decided to buy,” Colin Hart, RMDF manager and Sanex chairman told Ziarul Financiar.

SIF Muntenia has come to hold 8.4% in Sanex, which is worth approximately $700,000 if calculated by the latest quote.

“Many investors thought SIF must have decided to increase its stake for a reason, and that reason could be the negotiations for selling the company. Such rumours have been around for several months now, so that many have decided to buy to make sure they’re not missing a possible opportunity,” a broker commented.

The main strategic investor name said to be involved in the Sanex business is Zalakeramia, the Hungarian company controlling the other major Romanian tile maker Cesarom Bucharest.

Sanex’ capital is worth 373.13bn ROL, divided into 2,000 ROL par value shares. If looking at the latest average trading price, the market capitalisation of the company reaches approximately $8 million.