Bundle of investment news: Citrix and "Opening" UniCredit

Пачка инвестновостей: Citrix и «Открытие» UniCredit

Citrix has found a buyer for its head. And "Opening" lost its buyer.

Disclaimer: when we talk about, that something has grown, we mean a comparison with the same quarter a year earlier. Since all issuers are from the USA, then all results in dollars. When creating the material, sources were used, inaccessible to users from the Russian Federation. We hope, Do you know, what to do.

"Did not work out, not fartanulo »: cloud business Citrix found a buyer. But it is not exactly

Private funds Elliott Management and Vista Equity Partners prepare to buy Citrix cloud business (NASDAQ: CTXS). Citrix manages the cloud platform, where it provides services to enterprises, related to remote work and providing an Internet connection.

The company was supposed to be the beneficiary of the pandemic, but something went wrong: Citrix had difficulty converting users of the free version of its software into paid subscribers. As a result, her income stagnated., and quotes over time passed all the gains of the era of the "first quarantine". This led to the dissatisfaction of the company's shareholders - and you can see the result now..

Пачка инвестновостей: Citrix и «Открытие» UniCredit

Пачка инвестновостей: Citrix и «Открытие» UniCredit

No matter how cheap. Citrix are going to buy at a price 104 $ per share is approximately $13 billion per company. This can hardly be considered a great success for its shareholders.: it's less 105,5 $, which are already asking for the company's shares. The fact, that messages on possible sale of Citrix appeared in December, and by and large, the share price has risen over the past month to its current level on rumors of a sale.

Citrix buy with P / S in the area 4,10 and with P / E — 41. It is not cheap, but still less, than when the company's stock was at its peak, - over 155 $. That's why, maybe, it makes sense to look for shares of companies from the “promising sector” that have fallen from heaven, but with "problems" - with an eye to their possible sale to someone.

"Mutiny on the Bounty". Before the news of the sale, there was a shareholder riot, which led to the resignation of the director of the company. Later there were reports of, what a new guide, more precisely those, who performs his duties, - the appointment of a new director did not happen - looking for buyers for Citrix. This led to an increase in quotes..

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This is good news.: means, high probability, what other IT issuers have, whose quotes do not justify the credibility of investors, there will be the same revolt of shareholders, which will lead to the sale of the company and the growth of shares.

Two in one. Citrix, probably, after the sale will be combined with software manufacturer Tibco. Tibco was bought by Vista for $4 billion in 2014. And since then, Vista has tried to sell Tibco many times - but without success.. Expected, that an enlarged Citrix could thus reduce costs and become more attractive to a potential buyer or even investors during the next IPO.

In favor of the option with a new IPO in the future, says, that the second buying fund, Elliott Management, is a major shareholder of Citrix: Elliott has a stake in the company 10%. The fund previously required Citrix management to take action, which will lead to an increase in prices. And as we see, decided to buy the company.

Activist funds are now ready to act as if not buyers themselves, then at least the organizers of the purchase. In this case, co-buyers: Elliott found her Vista accomplices. More recently, almost the same case was with the Kohl's department store chain..

This is good news too. Means, funds are ready even for complex events, such as a joint purchase of an expensive IT enterprise for a large sum. And this again increases the possibility of selling some IT startups to groups and consortiums of investors.

There is a theoretical possibility, that the deal won't go through. Still, Citrix is ​​not a loss-making enterprise, and a significant portion of the company's revenue is projected recurring revenue from subscriptions and renewals of existing contracts. With that in mind, Elliott and Vista's offer doesn't look particularly generous, and it certainly won't be seen as a bailout of shareholders by those, who bought Citrix shares at the peak.

The closure: UniCredit refuses to acquire Russian assets

Italian bank UniCredit abandons plans to buy Russian bank Otkritie. It's sad for UniCredit, and for the Russian stock market as a whole.

In Russia, UniCredit only makes 3% proceeds, but here you need to take into account the business context: the bank has long suffered from declining revenues, which has an extremely negative effect on the quotes, while Otkritie shows excellent dynamics in terms of revenue and profit.

  Billionaire 2011-04-14 14:04:37

By the way,, Russian assets of UniCredit are more than profitable: they give 6% pre-tax profit of the entire banking group, which is twice their share in total revenue. Joining Otkritie could make the Russian division even more marginal.

Otkritie is the ninth bank in the Russian Federation in terms of assets, and the Russian branch of UniCredit is in 14th place. So their merger would be a significant event for the Russian financial sector as a whole., and for UniCredit in particular: the new bank would become the sixth in Russia in terms of volume.

Certainly, buying Otkritie would not be the solution to all UniCredit's problems. But it would still be a sure step towards increasing the profitability of the company's business in the long term.. But politics intervened.

Пачка инвестновостей: Citrix и «Открытие» UniCredit

Пачка инвестновостей: Citrix и «Открытие» UniCredit

Rating of banks in terms of assets for 1 December 2021

Place on 1 January 2021 Place on 1 December 2021 The volume of assets per 1 December 2021, billion rubles Asset growth in 2021
PAO Sberbank 1 1 40 074,6 14,3%
VTB Bank 2 2 20 159,1 16%
GPB Bank 3 3 8491,5 13%
NKO NKC 4 4 6206,1 27,5%
JSC "ALFA-BANK" 5 5 5909,3 22,1%
JSC Rosselkhozbank 6 6 4375,6 4,8%
PJSC Promsvyazbank 7 7 4307,4 32,3%
PJSC Bank FC Otkritie 9 8 3514,9 18,5%
PJSC Sovcombank 11 10 2089,4 34,2%
TRUST Bank 10 11 1840,7 9,2%
JSC Raiffeisenbank 12 12 1578,1 5,1%
PAO ROSBANK 13 13 1536,1 8,5%
JSC UniCredit Bank 14 14 1328,9 −0,2%
JSC JSB ROSSIYA 15 15 1217,1 13%

The European Central Bank threatened problems with European banks with a significant share of business in Russia, if sanctions are imposed on Russia. That's why, weighing all the pros and cons, UniCredit management abandoned the idea of ​​buying Otkritie.

Truth, should be taken into account here, what for the current management of UniCredit, who took office in the spring of 2021, increasing returns for shareholders is a priority. UniCredit's new management has pledged to shareholders to spend €16bn for this purpose by 2024 - more than half the market value of UniCredit's own shares - mostly in the form of share buybacks., but also dividends. Possible sanctions and the resulting increase in costs would clearly interfere with these goals..

For a potential IPO, Otkritie is rather bad news: minus one prospective buyer of this business. And not a fact, that someone else will take his place. Although this does not at all cancel the possibility of a successful IPO of Otkritie in the future.

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For the Moscow Exchange, the news about UniCredit is also not very good - the position of UniCredit will be regarded by many investors as a kind of signal for others: times, even those do not want to invest in the Russian Federation, who already has a working efficient business here, then this should not be done by others.

This could limit capital inflows into the Russian market over the next couple of years and negatively impact growth prospects for Russian equities.: given the poverty of the population of Russia and the still not very high level of investments of the country's population in the stock market, I wouldn't count too much, that in the short term, the influx of money from Russian citizens to the stock exchange compensates for the lack of foreign funds.

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