Bid activity was not limited to Saft Groupe, as Premier Farnell (U.K.) and Gategroup (Switzerland) also received cash tender offers at valuations near our estimate of intrinsic value. In addition, ALS Ltd. (ASX:ALQ) (Australia) received a potential private equity bid at an indicative price of AUD$5.30 per share, which was rejected by ALS’ board as they deemed the offer too low. We agree with the board’s assessment; our estimate of intrinsic value is well ahead of the indicative offer price as well. Finally, New Zealand based pay-TV operator Sky Network Television announced its plans to merge with Vodafone NZ, the New Zealand unit of telecommunications operator Vodafone Group (U.K.). We find this merger compelling because it will enable the group to offer a bundled solution of pay-TV, broadband and phone, which has proven successful in many other markets. The financial considerations are also compelling since the deal values Sky’s equity at more than a 20% premium to its trading price prior to the announcement of the merger.
From David Herro (Trades, Portfolio)'s Oakmark International Small Cap Fund second quarter 2016 commentary.
