Transport Tycoon Lured Back to Hauler by $230 Million Discount
Transport Tycoon Lured Back to Hauler by $230 Million Discount
(Bloomberg) -- Gyorgy Waberer is back at his namesake road hauler, which he built into one of Europe’s biggest and sold four years ago. The shares, worth less than a quarter of the 2017 public offering price at yesterday’s close, jumped the most on record.
The businessman is buying a 20% stake in Budapest-based Waberer’s International Nyrt. from Mid Europa Partners LLP for an undisclosed price, according to a regulatory statement on Tuesday. He is joining a bid by Indotek Group -- a company that’s conducted business with relatives of Prime Minister Viktor Orban -- to revive the freight company that hasn’t made a profit for 10 quarters as wages soared, competition sharpened and the pandemic upended supply chains.
For the company, in the midst of a protracted corporate restructuring, its founder’s 30-year of experience in the industry may be invaluable to the turnaround effort. For Waberer himself, the move has the promise of a lucrative investment at a fraction of his sale price that may complement recent ventures into real estate, logistics and healthcare.
“If somebody knows the company and industry well enough to turn it around, it’s him,” said Gabor Bukta, an analyst at the Concorde Securities brokerage in Budapest.
Waberer’s shares rallied as much as 20% to 1,470 forint in Budapest on Tuesday, its biggest daily leap on record. Even so, the stock has lost almost three quarters of its value since an initial public offering in 2017 at 5,100 forint.
Indotek bought an initial 24% stake in the hauler in October, while also acquiring options for the remaining 48% owned by Mid Europa Partners, a private-equity firm focusing on eastern European investments. On Tuesday, the company said Indotek had added 7% ownership via the options, while passing on the rights to buy 20% to the former CEO’s holding company and another 21% to MHB Optimum Zrt.
A spokesman for Gyorgy Waberer didn’t immediately respond to a request for comment.
Mid Europa’s exit marks an end to a decade-long involvement with the company that started in 2011 with an initial investment of 12 million euros ($15 million). At the time of the share offering six years later, it lauded plans for foreign acquisitions, including the purchase of a Polish competitor Link.
But the expansion became increasingly difficult to manage, with an eastern European wage boom and adverse regulation testing the company’s low-cost business model. In recent years, Waberer’s has relied on a regional logistics unit to help plug in losses from its international haulage operations. Earlier this year, it halted a “significant proportion” of its trucks to mitigate the impact of the coronavirus pandemic.
“This was probably an enormous flop for Mid Europa,” said Bukta, the analyst at Concorde Securities, who says the new owners may have acquired their stake for as little as half the market share price.
Mid Europa didn’t respond to an email and a call seeking comment. In October, it welcomed Indotek’s investment as a transaction that would help Waberer’s complete its transformation.
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