23 December 2011
JadenFinch Limited announced an indicative (pre-due diligence) bid for Landkom International (LKI LN) at GBp of 2.3/share, the latter reported on Thursday. Landkom’s board said it was one of the several bids they have considered, but said Alpcot’s offer (see our news dated December 21, 2011) was superior in terms of price, form of consideration and certainty of execution. JadenFinch used to manage 29,300 ha farming company Enselco in the same region where Landkom operates. The investment was sold to Kernel (KER PW) in September 2011 for USD 52.3 mln at the largest EV/ha multiple a listed company has paid for an acquisition in Ukraine since 2008. Yegor Samusenko: Though JadenFinch’s bid – GBp 2.3/share in cash – looks inferior to Alpcot’s, (effective GBp 3.2/share in Alpcot’s shares), we are somewhat concerned Landkom`s board has reportedly objected to JadenFinch’s request for due diligence. We believe there is a conflict of interest that might explain Landkom management’s preference for Alpcot: the latter explicitly offered the immediate repayment of a majority of ~USD 17 mln in payables to Amako, an entity previously run by Landkom’s current CEO and that currently hosts Landkom’s headquarters in Ukraine. We are positively surprised there is a second option for Landkom shareholders and see JadenFinch as easily capable of launching a non-friendly bid for Landkom superior to Alpcot’s.