Værdiansættelse af GN Store Nord A/S: Samt påvirkningen af en aktieemission

Abstract

The goal of this project is to es3mate the fair value of GN Store Nord A/S per March 1st 2023, and compare the found share price with the price on the market on the same date. The basis of a strategic and profitability analysis based on the annual reviews of GN Store Nord A/S in the period between 2017 and 2022 is used as the founda3on of a 10-year forecast with a terminal period aJer the 10th year. This forecast is used to es3mate the fair value of GN with use of the indirect Discounted Cash flow model and Residual income model with a WACC found via an itera3on process in 6 steps. GN announced on February 8th 2023, that they intend to make a seasoned equity offering of 7 billion DKK to reduce the 10 billion DKK debt increase, mainly caused by the acquisi3on of SteelSeries in early 2022 for 8 billion DKK. This was to be issued via a Rights Offering to the exis3ng shareholders in the first half of 2023, that was fully underwriXen by a syndicate of banks to ensure the success of the Rights Offering. The announcement was not well received by the shareholders, and most of them were displeased as they felt it was completely off the mark. The shareholders felt that it was too late, as they had seen the share price already being cut in half in the previous year, where the problem already existed. A smaller issuing would probably have been enough a year ago, but now a share issuing would be too dilu3ng. Also, they felt that there were other op3ons to explore before a need of issuing more shares. The resistance against the seasoned equity offering meant that GN withdrew the proposal on March 14th 2023 and said that they would explore other op3ons keeping the seasoned equity offering open. As a supplementa3on to the fair value es3ma3on of GN, this project therefore also aims to make an es3mate of the consequences on the fair value of GN, if the seasoned equity offering on 7 billion DKK had been effectuated with success. It also explores other op3ons GN has, to reduce their net interest-bearing debt to a reasonable level. In conclusion we es3mated the projected fair value of GN’s share price at 140,99 DKK, only 2 DKK shy of the actual share price of 145,55 DKK observed on March 1st 2023. When making the adjustment for a successful seasoned equity offering of 7 billion DKK, used to reduce the net interest-bearing debt by an equal amount, we found the rights offering price of 2:1 as 102 DKK and a projected fair value of GN’s share price to be 126,86 DKK. The es3mated consequence will therefore be a decrease in value of around 19 DKK per share, but the price will remain over the rights offering price of 102 DKK. GN has other op3ons to explore in their efforts to reduce their debt, as for example a smaller seasoned equity offering not requiring a consent from the shareholders, and an op3miza3on of costs among others.