HS Vision|Market analysis
The collapse of the Helsinki Stock Exchange may lead to foreign buyers snapping up low-priced companies from Finland, writes HS Vision editor Merja Saarinen.
Summer At the beginning of the year, the Helsinki Stock Exchange witnessed a dramatic drama when two foreign corporate giants competed to buy the traditional Finnish building technology company Uponor.
The competition ended with the victory of the Swiss Georg Fischer company under Midsummer, when the Belgian Aliaxis gave up the game.
This is one consequence of the collapse of the Helsinki Stock Exchange, and there may be more to come.
The Helsinki Stock Exchange has been one of the worst in the world this year. There the descent continues, even though elsewhere it is already rising.
This can be seen as a decrease in the valuation levels of the companies, which means that the Helsinki Stock Exchange is now like Alelaari for parties buying companies. You can buy good Finnish companies cheaper than their true value.
Uponor isn’t the only one that buyers have hit on. This year alone, purchase offers have been made for five companies, all of which have now been sold or are nearing completion.
Before Uponor, a purchase offer has been made for the building technology company Caverion, the game company Rovio, the information security company Nixu and the lighting company Nordic Lights.
It is exceptional that two large companies were also bought, i.e. Caverion and Uponor. Buyers usually go for the smaller ones.
Caverion was bought after a bidding competition by the Nordic venture capitalist Triton, Rovio’s Japanese entertainment giant Sega, Nixu’s Norwegian risk management company DNV and Nordic Lights’ American Methode Electronics.
At the end of June, it was also reported that Enento, or former Asiakastieto, would be the target of purchase speculations by the US credit information company Transunion. This is not a surprise, as Enento’s name has been on the list of potential acquisitions for years.
Others like this include many growth companies and especially software companies, as well as small financial companies and financial management companies. There has also been speculation for a long time about the purchase of the fishing equipment company Rapala. The names of the personnel service company Eezy and the software robotics company Digital Workforce have also come up recently.
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Now I have already dared to say “no thanks” and waited if someone else would offer a better price.
The valuation levels of Finnish companies have already sunk so low that even an increase in the cost of financing, i.e. a rise in interest rates, will not reduce the interest of buyers – at most it can delay it. This is what the market believes.
In any case, venture capitalists still have pockets full of money and the need to invest it somewhere.
New is now the fact that there was a bidding competition for no less than three companies that became the target of acquisition this year, i.e. there was more than one buyer candidate.
This shows that something has finally been learned in the boards of Finnish companies. In the past, companies have often been sold to the world too cheaply, when the companies’ boards have been ready to immediately accept the first purchase offer that came their way. I’m mostly glad that it’s good when it’s good.
Now I have already dared to say “no thanks” and waited if someone else would offer a better price.
In addition to Uponor, there has been competition for Caverion and Rovio.
In Uponor, the major owner, Oras Invest of the Paasikivi family, opposed the Belgian company’s offer. This prompted a Swiss company to join the race to beat it. In the end, the shareholders received a premium of more than 70 percent on top of the share price.
Rovio’s board, on the other hand, rejected the Israeli Playtika’s purchase offer at the beginning of the year and finally ended up accepting the Japanese Sega’s offer.
On the other hand, two buyers competed for Caverion, and the price rose after a few rounds of bidding so that the shareholders finally received a premium of almost 90 percent.
Even if you already know how to ask for a price, the increase in purchase offers can still not be considered a good sign – especially when the buyers mostly come from abroad.
At the same time, buyers often take jobs, product development, profits and tax revenues with them from Finland, as well as depress the Helsinki Stock Exchange, when new listings are currently not coming to replace those leaving.
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