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France-based Oberthur Technologies, the world's second-largest smart card producer based on revenue, expects to delist its shares and take the company private following a buyout offer from its parent, François-Charles Oberthur Fiduciaire. The card vendor announced its parent had made an offer of 6.70 euros (US$9.70) per share for the nearly 30 million publicly traded shares it does not already own, which equates to 26.7% of the company. That constitutes a more than 33% premium on Oberthur Technologies' 5.01 euro closing share price Monday in Paris. The vendor's board of directors will meet next week, and industry insiders expect the company to accept the offer. Oberthur Technologies, although profitable, had seen the value of its shares fall by nearly 17% the past year. "The market did not accomplish its task to raise equity," Jean-Michel Guichot, the vendor's chief financial officer, tells CardLine Global sister publication Cards&Payments. "We need to find other solutions. We do value the company better than the market does, so we say, 'fine, we don't have any other option than to get out of the market.'" The move comes less than a year after the vendor took on the banknote and other security-printing businesses of its parent in addition to producing smart cards. It acquired Sweden-based card vendor XponCard Group AB last spring and was widely rumored to be in high-level talks to buy an even larger smart card unit, Sagem Orga, of France-based electronics conglomerate Safran Group. With the acquisitions, Oberthur has been hoping to stay competitive with its larger France-based rival Gemalto NV. Guichot says Oberthur will remain just as competitive with Gemalto, despite the delisting. "Being listed or not, we believe we have the scale to compete," he says. "We'll make sure we can protect the assets and keep on investing in" research and development. A France-based financial analyst, who asked not to be identified, says Oberthur never could hope to raise a lot of capital in the market or see its share price rise more so than its rivals because its parent, owned by the Savare family, declined to part with enough of the company's stock. "This is clearly a family business," he says. Oberthur CEO Philippe Geyres told financial analysts Tuesday the delisting would not change Oberthur's strategy or direction in the market. The vendor Tuesday also announced its first-half earnings. Operating income climbed 38.9%, to 36.8 million euros (US$58.1 million) from 26.5 million euros in the same period last year. Net income grew by 42.7%, to 14.7 million euros from 10.3 million euros. Geyres predicted the vendor would finish the year profitably and see sales grow by at least 10%.
