Bobst is to delist from the Zurich stock exchange in a move that will allow it to take a long term view of its own development, not least of its Connected automation network concept. The long term funding requirements of this investment make it unsuited to the constant scrutiny and pressure that a company whose shares are traded publicly faces.
The means to make the switch is a tender offer from JBF Finance, already the company’s majority shareholder controlling a 53% stake in the packaging and finishing equipment specialist. JBF is in turn owned by 60 descendants of Jean Bobst, the company’s founder.
The changed status will also make it easier to keep as much production in Switzerland, Italy and Germany because there will be less pressure to outsource engineering to lower cost countries.
The risk is that the step, expected to be completed before the end of the year, will result in provocation of a third party, able offer more per share than the CHF 78 that JBF is tendering. This is thought unlikely, however. The tender price is a 22% premium over the price on the SIX exchange where the shares are traded.
The move will leave the current board, a mix of family and independent directors, unchanged; the interests of the fifth generation of family members will be paramount; shareholders receive an attractive price for their investment, and most importantly, “Bobst Group will enjoy the best possible conditions to transform the business into a digitised, connected and sustainable packaging supply chain.”
The offer will be published officially in September with the offer closing in October enabling completion by the start of November.
It was published at the same time as Bobst released the results from the first six months of trading this year. sales increased to CHF 773 million (CHF 667 million) in the first six months of 2021. Ebit returns reached CHF 29 million (CHF 15 million) and the net result was CHF 22 million (CHF 5 million). The order backlog increased by 40%.
This creates optimism for the second half, but continuing supply chain uncertainties, with a reduced ability to access global shipping capacity, creates a risk.
The company notes an increase in service and spare parts due to very high levels of activity at our customers’ plants, while easing of Covid restrictions has helped reduce the difficulty of carrying out installations. Corrugated machines are requiring greater levels of service, helped by a demand to keep older machines in service rather than being replaced
The company is also enjoying the fruits of growing interest in sustainability and customers and brands looking to use recyclable packaging, and not withstanding the war in Ukraine, continuing lockdowns in China and higher inflation in Europe and the US, it expects second half sales to be significantly higher than those in the first six months.
