Tecnotree purchase offer subject to Niemis and Kakkones – Inderes: Offer increase possible

From serving telecom operators Tecnotreesta the purchase offer made may still rise, Inderes estimates. It seems that the offered price does not please the company’s largest minority shareholders. The company’s second largest Finnish owner Kösti Kakkonen commented earlier that he thought the price offered was too low.

The company’s largest Finnish owner Jorma J. Nieminen has not publicly commented on the offer so far. However, based on the flagging notice that came late on Friday evening, Nieminen has bought Tecnotree shares from the market after the purchase offer, based on which Nieminen is not satisfied with the offer either. According to the flagging announcement, Nieminen’s ownership exceeded 10 percent of Tecnotree’s shares.

Shortly after the flagging announcement, Tecnotree announced the conversion of convertible bonds into shares. Convertible bonds are converted into shares by the managing director of the buyer consortium Padma Ravichander and principal owner of Tecnotree Fitzroy. Conversion, on the other hand, dilutes the ownership of other owners.

According to Inderes’ calculations, the ownership of Jorma J. Nieminen and his companies, which temporarily increased to more than ten percent, would be diluted to 7.6 percent of the stock with the conversions. Together, however, Kakkonen and Nieminen own more than 10 percent of Tecnotree’s shares even after the dilution.

“However, together with Kyösti Kakkonen’s ownership, the ownership of more than 10 percent would be exceeded, and thus together Nieminen and Kakkonen would be able to reject the current offer. If the 90 percent limit is not met, we see the possibility of raising the offer as well,” Inderes assessed in his morning review.

Inderes has said that it considers the offer good considering Tecnotree’s weak cash flow guidance for 2026 and the dilution of ownership caused by the convertible bonds. However, Inderes recommends keeping the shares, because if the consortium does not get the 90 percent of the shares it is aiming for, the offer may rise, according to Inderes.

Investment company of Heliosthe takeover bid by a consortium formed by Tecnotree’s principal owner Fitzroy and CEO Padma Ravichander was announced last week. The consortium is offering 5.70 euros per share for Tecnotree. On Monday morning, when the stock market opened, Tecnotree’s share price was 5.60 euros.

The price per share of EUR 5.70 in the purchase offer is a fairly standard premium of more than 40 percent to the previous day’s closing price and more than 36 percent to the average price of the previous 12 months. However, many investors may be disappointed by the offer, as Tecnotree’s price has recently fallen, reflecting investors’ mistrust of the company.

Tecnotree, which also operates in developing markets, has, in addition to fluctuating exchange rates, had problems e.g. repatriating receivables from customers, which is why the business has produced a weak cash flow.

Confidence was also weakened by the ambiguities regarding the entries of the previously issued debenture exchange bond and the information about them. The course has also been affected by the arguments related to related party connections that have arisen from discussion forums.

Jorma J. Nieminen and Nieminen’s portfolio manager Pauli Haarala have previously said that they demanded from Tecnotree to address the shortcomings of the administration and, among other things, to moderate the remuneration of the management, and said that they had been actively in contact with the company’s management.

Nieminen has steadily increased his ownership in the company.

“Ownership has swelled in the belief that there are prerequisites,” Nieminen told Arvopaper in 2024.