Logicom Services Ltd, a wholly owned subsidiary of Logicom Public Limited, has announced a public offer to acquire all outstanding shares of Demetra Investments.

However, as reported by Stockwatch, analysts have cast doubt on whether this offer will be accepted, primarily due to a mismatch in valuation.

The public offer, officially launched on January 17, was triggered by Logicom’s acquisition of 17,152,353 Demetra shares from Eurobank, representing 8.576 per cent of Demetra’s issued share capital.

As announced last week, the purchase was made at €1.55 per share, totalling €26,586,147.15.

Currently, Logicom directly holds 76,984,453 Demetra shares, equivalent to 38.492 per cent of the company’s issued share capital.

Including affiliated parties, this figure rises slightly to 38.493 per cent.

For the offer to succeed under Article 10(1) of the law, Logicom would need to secure acceptances exceeding 50 per cent of voting rights.

The proposed price of €1.55 per share is 13.9 per cent below Demetra’s last trading price of €1.80 and undervalued compared to its internal share value of €2.4979. The internal share figure was reported by analysts earlier this month.

Moreover, Demetra’s portfolio valuation is expected to increase further upon completing a €426.5 million transaction with Eurobank for its stake in Hellenic Bank.

Post-transaction, Demetra’s cash reserves will amount to €428.7 million, equivalent to €2.144 per share.

The proposed offer price is 37.9 per cent below this internal valuation and 27.7 per cent below Demetra’s anticipated cash value.

It has been reported that given the dispersed shareholder base, some shareholders may still accept the offer despite the undervaluation.

However, the market is expecting that Demetra’s board will recommend rejecting the proposal based on these financial discrepancies.

It should be noted that regulations prevent Logicom from acquiring Demetra’s shares above €1.55 for six months following the offer.

A similar situation occurred during Eurobank’s acquisition of Hellenic Bank shares from Demetra and Logicom, where an initial offer of €2.56 was later raised to €4.843 after the six-month restriction expired.

*This article is a translated version of content originally published on StockWatch.