Topic: yesterday, private equity investor KKR announced a public voluntary takeover offer for 30% of shares at a price of € 44 per share, implying a 36% premium on Friday's closing price.

The Fuchs Family will remain majority shareholder (63% post capital increase) and plans to delist OHB with KKR afterwards. Additionally, KKR intensifies its financial commitment by solely subscribing a 10% cash capital increase (implied ownership of 9.1% ex takeover tenders) in order to fund OHB's future growth path. Further, KKR also provides a € 30m convertible bond to OHB's subsidiary Rocket Factory Augsburg (RFA). This will further finance RFA's road to launchpad (launch planned Q2 2024). In sum, KKR plans to invest € 339m into OHB and its subsidiary. (see p.2)

Here are our key takeaways:

• The offer price of € 44 is close to our old PT of € 48 per share. Therefore, the takeover price seems fair for a minority stake (37% post capital increase assuming 100% of free float fully tendered).
• Given the low liquidity of the stock over the past years, which, should have been a key reason behind the undervaluation in the past, the tender of shares to KKR offers a good opportunity to liquidate existing positions at a sensible premium.
• With the intention of a delisting, the stock's liquidity is likely to decrease even further or the stock will eventually be fully suspended from trading.

In sum, we like the offer and hence recommend to tender the shares. As a result, we downgrade OHB to SELL (old: BUY) and reduce our PT to the offer price of € 44 per share (old: € 48).

On a side note, OHB also released solid Q2 figures: Q2 total sales came in at € 254m, -2% yoy (H1: € 457m, +3% yoy) driven by strong growth in the segment Aerospace (€ 32.4m, + 7% yoy; H1: € 60m, +12% yoy) as well as Digital (€ 26.2m, +6.4% yoy; H1: 51.6m, +6% yoy). Order intake stood at € 296m, implying 1.2x book-to-bill.

Q2 EBIT came in at € 13.4m

, -4% yoy; EBIT margin: 5.3% (H1: € 26m, +2% yoy, 5.7% EBIT margin) driven by the segment Space Systems (€ 11.8m, +38% yoy, 5.9% EBIT margin; H1: € 21.1m, +21% yoy, 5.9% EBIT margin) marking a record high H1 profit. The FY23 guidance was confirmed.