Ocean Wilsons Holdings (OCN)

[SalvorHardin]

Ocean Wilsons Holdings (OCN) is a Bermudan investment company, listed in London. Share price 940p, yield 5.8%. I forgot to post about OCN this morning and as I'm at a village cricket match I only have my phone. Anyway, here's a summary (OCN is my 9th largest shareholding, I topped up last Thursday).

OCN's main asset is 57% of Wilson Sons, a Brazilian shipping and logistics company listed on Sao Paolo. Just over 7 Wilson Sons shares per OCN share, that's an NAV of about 1,400p.

The rest of OCN is an investment portfolio. Valuations every 3 months, I reckon that it is currently worth between 650p and 700p per OCN share. So my NAV for OCN is 2,050p to 2,100p.

OCN has traditionally traded at a big discount to NAV, part of which is because it is family controlled (Salomon, linked with Hansa Trust) A 57% discount is much bigger than we're used to seeing.

Intriguingly there are reports from Brazil that OCN is considering selling its Wilson Sons shares to the Swiss company MSC, who may takeover Wilson Sons for about US$1 billion. That's a premium of about 50% (an extra 700p to OCN's NAV). Story below

https://www.seatrade-maritime.com/ports/msc-reported-be-talks-acquire-wilson-sons

The ADVFN thread is very useful

[UncleEbenezer]

Ocean Wilsons Holdings (OCN) is a Bermudan investment company, listed in London. Share price 940p, yield 5.8%. I forgot to post about OCN this morning and as I'm at a village cricket match I only have my phone. Anyway, here's a summary (OCN is my 9th largest shareholding, I topped up last Thursday).

OCN's main asset is 57% of Wilson Sons, a Brazilian shipping and logistics company listed on Sao Paolo. Just over 7 Wilson Sons shares per OCN share, that's an NAV of about 1,400p.

The rest of OCN is an investment portfolio. Valuations every 3 months, I reckon that it is currently worth between 650p and 700p per OCN share. So my NAV for OCN is 2,050p to 2,100p.

OCN has traditionally traded at a big discount to NAV, part of which is because it is family controlled (Salomon, linked with Hansa Trust) A 57% discount is much bigger than we're used to seeing.

Intriguingly there are reports from Brazil that OCN is considering selling its Wilson Sons shares to the Swiss company MSC, who may takeover Wilson Sons for about US$1 billion. That's a premium of about 50% (an extra 700p to OCN's NAV). Story below

https://www.seatrade-maritime.com/ports/msc-reported-be-talks-acquire-wilson-sons

The ADVFN thread is very useful

Thanks for posting.

Note that Hansa gives you that discount twice over, as Hansa has a major holding in OCN and in addition trades at a discount.

[SalvorHardin]

Thanks for posting.

Note that Hansa gives you that discount twice over, as Hansa has a major holding in OCN and in addition trades at a discount.

Glad to help. I've complained enough about the lack of investment posts on TLF, so I thought that maybe I should post some!

There was some intriguing speculation on ADVFN that the family could be looking to tidy up their holdings, by selling Wilson Sons and then merging Hansa Investment Company and Ocean Wilsons.

ISTR that Hansa's holding of Ocean Wilsons was around 20% of Hansa.

[Dod101]

Very interesting and I enjoy reading ADVFN share chat. I held Hansa for a long time but got fed up of it as it was going nowhere and sold, but this is interesting. The trouble is that the Salomon family play their cards very close to their chest and I know nothing of them . They make the Cayzers look like an open book. They are both dealing in heavily discounted assets but beyond that there is no much comparison of course. OCN is a decent enough income share and with the discount to NAV well who knows? But as ADFVN chat says, any shareholder is entirely in the hands of the Salomon family.

Dod

[formoverfunction]

I've held OCN for a long time. If I take the dividends as returned capital, then I average out at £5.60 cost per share as of today.

Not mt largest holding by a country mile.

According to SalvorHardin article "The potential transaction would represent an approximate value of $1.02bn." against a Market cap. of £332.41 million (according to HL). Thank's SalvorHardin. I believe Spash247 have also written about it, but I can't find the article https://splash247.com/

The last report from OCN, suggested the investment portfolio, excluding Wilson & Sons, as of May '23:

The investment portfolio was valued at approximately US$298.1 million which represents US$8.43 (£6.83) per Ocean Wilsons share

I also wait with interest to see what happens next.

[SalvorHardin]

I believe Spash247 have also written about it, but I can't find the article https://splash247.com/

I've found two articles on splash247

From 12th June "Ocean Wilsons reviewing Wilson Sons ownership"
https://splash247.com/ocean-wilsons-reviewing-wilson-sons-ownership/

From 19th June "Local media in Brazil is widely reporting that Mediterranean Shipping Co (MSC) is looking to buy out Wilson Sons, a well known port and maritime logistics firm with operations across Latin America’s largest country."
https://splash247.com/msc-tipped-to-be-chasing-brazils-wilson-sons/

[formoverfunction]

Thanks, I have been trying out ProtonVPN's Browser extension, it provides an addition level of browser privacy, it allows you to have a machine IP that's different to the browser IP, alongside some tunneling functionality.

I am not convinced I am using it properly, but it's working better today, so I'll read those article from Brazil in a moment, whilst enjoying a beer in Devon...or was that Dublin or maybe London.


Cheers

[bruncher]

I recently bought Hansa Trust on a dip (before anything was announced about OCN sale of Wilsons stake), and sold OCN on the bounce from the rumour about selling Wilsons.

I have found the FT info about the shareholding of OCN almost always wrong.

If you look at the FT Profile for OCN, Institutional Holders, it states that Hansa has sold 3.74 million shares - 100% of its holding.

But if you go to Hansa's website (or look at Assets listed for HAN or HANA on FT), OCN is still listed as top holding.

This has been a frequent problem for me trying to monitor OCN. FT have corrected it a couple of times over the years, but it keeps reverting to Hansa Trust disposing of 100% of OCN. Weird.

[SalvorHardin]

Nothing to report. I've been trawling the Internet for any news about MSC and haven't found anything significant.

A Portugeuse friend (who also owns some shares in Ocean Wilsons) hasn't found anything either.

Meanwhile interim results are due on Thursday (10th). Hopefully there will be an update

[SalvorHardin]

Very little to report. All I've found in the last few weeks is a brief reference in an article on a cargo and shipping website behind a paywall). This is everything outside the paywall:

"Looking inside the MSC family on Monday 7 August was quite convenient, keeping in mind their hunger for expansion and… the Q2 23 numbers released today by Ocean Wilsons Holdings Limited (OW), which controls Wilson Sons (WS) from Rio de Janeiro. It’s unknown yet if the Italo-Swiss firm will win over the Brazilian maritime outfit, with its appealing towage and container handling units, but what clearly emerges from MSC insiders is that the interest in multiple assets is there."

https://theloadstar.com/takeover-target-wilson-sons-towage-shines/

In the last three months the share price has been fluctuating between 915p and 1,035p. My spreadsheet has the share price on a discount of roughly 55% of the NAV (I build in a pessimistic return for the portfolio since last valuation based on changes in the MSCI Index (50% of any gains, 150% of any losses)).

Wilson Sons has been trading between 12.50 and 14.30 Brazilian Reals over the last three months.

[SalvorHardin]

Looks as though there might be something to the reports of a possible sale of Ocean Wilsons' stake in Wilson Sons. Yesterday's third quarter update included the following (my bold):

"Further to the announcement of 12 June 2023 regarding the Company's strategic review of its investment in Wilson Sons, the Company has retained Banco BTG Pactual S.A. as adviser to Ocean Wilsons Overseas Limited ("OWOL"), the holding company for the Group's indirect investment in OW Overseas (Investments) Limited ("OWOIL") and in Wilson Sons. Ocean Wilsons also confirms that BTG Pactual has received a number of indicative non-binding offers for its indirect investment in OWOIL and in Wilson Sons."

https://www.investegate.co.uk/announcement/rns/ocean-wilsons-holdings-ltd---ocn/quarterly-update-q3-2023/7881729

Ocean WIlsons' share price is 1,125p as I type this. I reckon that the current NAV is about 2,400p (this assumes that the portfolio has grown by 50% of the increase in the MSCI World Index since the last valuation). If the rumours about Wilson Sons being valued at 5 billion Brailian Reals the NAV increases to just over 3,000p.

Bear in mind that Ocean Wilsons has traditionally traded at a discount to NAV of at least 25%, in large part because it is controlled by two families.

[formoverfunction]

Conference call today at 15:00 (London)

hosted via ri.wilsonsons.com.br/en/

Held in Portuguese with translation to English

[feste]

There's this update
Https://www.infomoney.com.br/mercados/w ... ara-acoes/

BBI Review

Wilson Sons (PORT3): Retention plan indicates "imminent" purchase deal and could be catalyst for shares

In Bradesco BBI's view, MSC seems to be the favorite candidate to acquire Wilson Sons

InfoMoney Team

2023-12-21 10:13 AM • Updated 21 hours ago

Yesterday (20), after the market closed, Wilson Sons called an extraordinary general meeting (EGM) for January 23, 2024 to propose a non-compete and key executive retention plan.

The move is due to the possibility of an M&A transaction confirmed by its controlling shareholder, Ocean Wilson Holdings Limited (OWHL), on June 12 and November 14.

In Bradesco BBI's view, the news indicates that a deal seems imminent and MSC appears to be the favorite candidate to acquire Wilson Sons. PORT3 shares recorded gains of 0.68%, at R$ 16.33, at 10:06 am (Brasília time) in the session this Thursday (21)...."


But this may be Bradesco just drumming up business/interest.

Story continues

"..It is worth noting that, according to a June report in the newspaper O Globo, MSC was negotiating the purchase of 57% of Wilson Sons in a transaction of approximately R$5 billion or R$8.8 billion for 100%, which caused the shares to soar at the time.

However, as reported by the company on November 14, Ocean Wilson confirmed that during the competitive process, the controlling shareholder received several non-binding offers.

In the house's view, the offers could raise the acquisition price to the upper range of R$19.90 to R$25.60 per PORT3 asset or a multiple of 9 times to 11 times the EV/Ebitda multiple (EV = market value + debt; Ebitda = earnings before interest, taxes, depreciation and amortization) for 2024. "This could lead to a 23% to 58% rise in the shares compared to Wednesday's closing price," says the bank.

In addition, this unexpected proposal to approve a non-compete and retention plan could also be part of the closing conditions of the deal, suggesting that a binding offer and, consequently, the announcement of the deal seem imminent.

BBI continues with an outperform recommendation for Wilson Sons' shares with a target price of R$ 18.00 for the end of 2024..."

[feste]

What appears to have piqued Bradesco's interest is this RNS :

https://ri.wilsonsons.com.br/ultimas-atualizacoes/

.."Rio de Janeiro, 20 December 2023 - Wilson Sons S.A. (Ticker: PORT3).. hereby
informs its shareholders and the market in general that its Board of Directors, at a meeting held on this date, approved a retention and non-competition plan for key Company professionals (“Retention and Non-Competition Plan”) with the objective of not only protecting but also maximising value for the Company, the effects of which will be conditioned upon a possible operation resulting from the strategic review being carried out by its indirect controlling shareholder, Ocean Wilsons Holdings Limited (“OWHL”), as per the Material Facts disclosed on 12 June 2023 and 14 November 2023, as well as the suspension of the Long-Term Incentive Plan approved at the Company’s ordinary and extraordinary general meeting held on 24 April 2023. The Retention and Non-Competition Plan and the suspension of the Long-Term Incentive Plan are subject to the approval of the overall compensation proposal for the Company's management, encompassing the amounts related to the Retention and Non-Compete Plan, referring to the fiscal year of 2024, by the extraordinary general meeting to be held on 23 January 2024 (“EGM”).

As previously informed, the strategic review being carried out by OWHL will consider all possible options, and there can be no certainty as to its outcome..."

ATB

[feste]

Here's the detail
hxxps://api.mziq.com/mzfilemanager/v2/d ... 6?origin=1

Extract

.."In view of the strategic review being carried out by the Company's indirect controlling shareholder, Ocean Wilsons Holdings Limited (“OWHL”), which has the potential to result in an operation involving the transfer of its direct or indirect equity interest in the Company (“Potential Operation”), as disclosed in the Material Facts released to the market on 12 June 2023 and 14 November 2023, the management has structured, with the assistance of specialised advisors, as a way of preserving and maximising the Company's value in a Potential Operation, as well as compensating and retaining the Company professionals, a retention and non-competition plan for the management, comprising the Company's executive officers and the Chairman of the Board of Directors, and key employees of the Company, the overall value of which will be up to R$141,864,604.00 ....

Until the closing of a Potential Operation, the Company will have the challenge of maintaining its activities and the attractiveness of its operations without interruptions, as well as requiring the support and contribution from some of its key employees to engage in extraordinary activities to assist in the execution and closing of a Potential Operation. Therefore, retaining key employees is a critical success factor for the smooth functioning of the Company, for a Potential Operation, and consequently, for maximising the value of the Company in the context of a Potential Operation.

In this sense, the Retention and Non-Competition Plan has been structured with an initial term of 24 (twenty-four) months, which may be extended by decision of the Board of Directors for a further 12 (twelve) months (“Term of the Plan”), and in such a way as to make possible payments contingent upon the execution and closing of a Potential Operation. Therefore, the payment of any amount will serve as compensation (i) for the employee's continued tenure and (ii) for non-competition and non-solicitation obligations to be entered into with the key employees, as necessary, for terms that may vary from 3 (three) to 10 (ten) years, in accordance with the employee’s relevance to the Company's normal course of business, their access to confidential and strategic information of the Company, and the potential harm to the Company if they were to compete directly or etc etc..."

Smoke, fire, any without?

GLA

[feste]

Other thoughts :

It looks as though the previous strategic review was 4 years ago, July 2019, timing of the current review seems to coincide with the MSC approach.

.."on digging into the actual source document - an RNS, calling for an EGM, to discuss implications of a 'Potential Operation' - it seemed (and seems) to me that there might be more substance, viz:

- [could] result in an operation involving the transfer of its direct or indirect equity interest in the Company (“Potential Operation”);

- possibility taken sufficiently seriously to retain specialist advisors;

- it looks as though there's an 'issue' with the recently-approved LTIP (no idea what this is about? maybe not 'generous' enough?). The issue is mentioned in the covering RNS, but not in the separate detailed proposal....

NAI, DYOR, etc

Comments invited!
(especially informed, this is my first Brazilian exposure and first port logistics exposure)

[SalvorHardin]

Other thoughts :

It looks as though the previous strategic review was 4 years ago, July 2019, timing of the current review seems to coincide with the MSC approach.

.."on digging into the actual source document - an RNS, calling for an EGM, to discuss implications of a 'Potential Operation' - it seemed (and seems) to me that there might be more substance, viz:

- [could] result in an operation involving the transfer of its direct or indirect equity interest in the Company (“Potential Operation”);

- possibility taken sufficiently seriously to retain specialist advisors;

- it looks as though there's an 'issue' with the recently-approved LTIP (no idea what this is about? maybe not 'generous' enough?). The issue is mentioned in the covering RNS, but not in the separate detailed proposal....

NAI, DYOR, etc

Comments invited!
(especially informed, this is my first Brazilian exposure and first port logistics exposure)

Thanks for the updates. These and the recent performance of Wilson Sons' shares IMHO is a case of "there's no smoke without fire". Wilson Sons closed last Friday at a high for the last couple of years of R$17.05, which is an increase of 62% since the sale rumours started in June. In contrast, Ocean Wilsons shares are up by 42% since the same date.

We need to bear in mind that if the Wilson Sons stake is sold, there's a good chance that little or nothing will be distributed to shareholders but is instead invested by the current managers (more like a job creation scheme for connected persons). There might be a merger with Hansa Investment Company (what used to be Hansa Trust) which currently trades at a discount to NAV of 40% (Ocean Wilsons current discount is around 55%).

I might buy a few more shares when markets reopen on Wednesday 27th. Merry Christmas!

[TUK020]

I had seemed to recall that OCN was a major holding of CLDN I.T. but when I checked it wasn't.
Misremembered? or changed?

[SalvorHardin]

I had seemed to recall that OCN was a major holding of CLDN I.T. but when I checked it wasn't.
Misremembered? or changed?

The IT that had a big holding of Ocean Wilsons is Hansa Trust, which changed its name to Hansa Investment Company and kept the OCN shareholding.

Hansa and Ocean Wilsons are closely connected through the families which control the investment manager, Hanseatic, and Ocean Wilsons.

[SalvorHardin]

The shares closed at 1,350p today (up 12.5% year to date), though bear in mind that there's a big spread and only the last two trades (for 1,060 shares in total) were done at this price. Most of the trades today were done at 1,312p or less.

So whilst this is probably just a spike caused by late/after hours buy orders, it's a possible indicator that something is going on if only that it's more rumours about a possible sale (I haven't seen anything online, neither has my Portuguese speaking contact).

The Wilson Sons' share price is about 6% off its recent peak on 15th January. I estimate that the discount of Ocean Wilsons' share price to NAV is about 47% which is smaller than it has been for quite some time. Interesting times, methinks!