Board unanimously adopts independent expert position on Rodon acquisition

The Board of Directors of Agros Development Company "Proodos" Public Ltd, the owner of the Rodon Mount Hotel & Resort in Agros, has decided to adopt the position of the independent expert (PwC) in its entirety, judging that the proposed consideration of €3 per share is fair and reasonable on the date of the formulation of the public offer.

The Board of Directors at a meeting held on 17 February, 2025, after studying the evaluation report prepared by the independent expert, PwC regarding the public offer by Balram Chainrai for the acquisition of up to 100% of the issued share capital of the company under acquisition, prepared a document containing the reasoned opinion of the Board of Directors of the company under acquisition on the public offer (opinion document).

The Board of Directors, taking into account the broader interest of all shareholders of the company under acquisition and taking into account the evaluation report and all other factors mentioned above and in particular the following, the opportunity given to the shareholders of the company under acquisition, to immediately liquidate their investment, taking into account the low marketability of the shares. The trading volume of the share during the 12 months prior to the official announcement of the public offer was significantly low liquidity (0.29%).

Goodwill up to 146%

Moreover, the proposed consideration of €3.00 represents a premium of 105% compared to the closing price of the stock exchange meeting that preceded the announcement of the public offer (€1.46 on 9 December, 2024).

At the same time, a capital gain of 122%, 134% and 139% arises in relation to the average share price during the 3, 6 and 12 months preceding the official announcement, respectively, and up to 146% in relation to the information provided for in the provisions of article 4(1) paragraph (k) and (l) of Directive DI41-2007-03 of 2012 of the Capital Market Commission (i.e. on the first business day of each month for the last six (6) months preceding the Official Announcement and the average closing price on the last business day preceding the Official Announcement).

At the same time, the proposed consideration of €3.00 fully covers the Net Asset Value (NAV) of the company. Specifically, the proposed consideration of €3.00 represents a premium of 31.8% compared to the NAV per share as of 30 June, 2024 (unaudited results), and a premium of 30.6% compared to the NAV per share as of 31 December, 2023 (audited results).

Based on the valuation report, the proposed consideration of €3.00 per share appears to fall within the range of NAV per share based on the company's restated unaudited interim balance sheet as of June 30, 2024 (€2.60 to €3.35) and marginally higher than the average of the said range (average: €2.97).
The Board of Directors of the company unanimously decided to adopt the position of the independent expert in its entirety and that the proposed consideration of €3.00 per share is fair and reasonable as of the date of the formulation of the Public Offer.

Furthermore, the Board of Directors of the Company emphasizes that the shareholders of the company should obtain their own professional advice in relation to their decision to accept or not the Public Offer. In any case, it is emphasized that the public offer by the proposer constitutes a proposal and does not aim in any way to prejudice the shareholders of the company under acquisition to accept it, and the responsibility for making the decision ultimately lies with them.

Conclusions on the evaluation of the public offer - PwC's position
Balram Chainrai uses the NAV method, which is generally considered one of the accepted valuation bases. The Proposed Consideration of €3.00 per share appears to fall within the range of NAV per share based on the Company's restated Balance Sheet as of June 30, 2024 (€2.60 to €3.35) and marginally higher than the average of this range (average: €2.97).

It is noted that the adjustments applied to the Company's Balance Sheet as of June 30, 2024, mainly concern adjustments to the Net Book Value of the Company's Properties to Fair Values, as calculated by independent property appraisers.

The Proposed Consideration also includes goodwill from the NAV per share on December 31, 2022 (€2.20), December 31, 2023 (€2.30) and June 30, 2024 (€2.28) according to the Company's financial statements.

Although the proposer did not take into account the stock market value or the marketability/liquidity and trading volume of the company's shares in determining the proposed consideration, for the purposes of evaluating the amount of the proposed consideration, the following have also been taken into account:

• The proposed consideration is 140% higher than the average closing price of the company's share in the last 12 months prior to the official announcement of the public offer.
• The trading volume of the share in the 12 months prior to the official announcement of the public offer was significantly low (0.29%). Therefore, the share price may not reflect the true value of the company, as small transactions can cause significant variations in the stock market value, without correspondingly affecting the value of the assets, cash flow or prospects of the company.
• Based on the above, with the proposed consideration, the shareholder is given the opportunity to immediately liquidate his investment at a price higher than the average closing price of the share in the 12 previous months prior to the official announcement, given the very low marketability of the share on the CSE.

Taking into account all methods, elements and data, the proposed consideration of €3.00 per share appears to be fair and reasonable at the date of the public offer.

(Source: InBusinessNews)