Zardoya-Otis Takeover – Effect on Columbus fund
On Thursday 23rd September Otis Worldwide announced its intention to acquire the outstanding shares of its Spanish subsidiary, Zardoya Otis at a 31% premium to the prior close. This marks the third takeover announcement for a holding in the Columbus fund in as many months. As for the other recent takeovers, Akka Technologies and Zooplus, we are sorry to lose our holding in the business but encouraged that others identify the value that we see.
Otis Worldwide, the $37bn US listed parent holds 51.01% of Zardoya’s shares having originally invested almost 50 years ago. A full takeover has been rumoured for many years but became more likely after Otis was spun out of United Technologies last year.
Zardoya Otis was a relatively recent purchase (May 2021) for the Columbus fund as we felt the stability and visibility of the business was far from reflected in the share price. Indeed even after the 30% premium offered by OTIS the shares still trade at a discount to the peer group (15.5 EV/Ebitda 21 vs. 18.8 EV/Ebitda average for Otis Worlwide, Kone, and Schindler) However, since Otis already held the majority there is unlikely to be a competing bid to provide a fuller valuation for shareholders.
