(News Bulletin 247) – The title recovers around 40% in three sessions. Analysts are potentially raising speculation about hypothetical changes to the company’s mega-dilutive financial restructuring plan.

To say that the Orpea share is very volatile is an understatement. Now that the capitalization of the group weighs more than about 170 million euros, the title regularly registers significant sinusoids on the stock market.

This is still the case for a few sessions. On Wednesday the title gained 17.8% then 15% on Thursday and it won another 5% this Friday around 11 a.m. That is a gain of more than 40% cumulatively.

Again, it is difficult to determine exactly what may trigger this outbreak. “Certain individual shareholders may perhaps position themselves hoping for better treatment of minority shareholders in the group’s financial restructuring, which is currently disputed”, however attempts an analyst who recalls that such movements have taken place on several occasions since the start of the ‘year. “And in volumes that drop each time,” he adds.

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“Rebellion” of the minorities

“It’s an option: that the financial restructuring, which provides for a mega-dilution, be amended, while there is a rebellion on the part of certain minorities, with arguments that can be agreed”, considers of his side an analyst.

The financial restructuring of Orpea, which is crumbling under a net debt of just under 8.8 billion euros, provides for the cancellation of just under 4 billion euros in debt and the takeover of the group by a group of shareholders led by the Caisse des dépôts (CDC). It must result in a mega-dilution for the group’s holders, of 99.6% or even 99.96% under certain conditions.

A shareholders’ association, called Adamo, formed in February, disputes this project, preferring the alternative plan of Concert’O, which brings together two minority shareholders.

Last week, Concert’O highlighted an analysis by Ricol & Lasteyrie commissioned by a group of Orpea creditors. This document criticized the expert report by the Sorgem firm, which supported Orpea’s recapitalization project and which deemed the restructuring “fair” for the group’s holders.

Ricol&Lasteyrie emphasizes that the expert report has set aside all the references usually used to value a company in favor of the sole approach by discounting future cash flows (discounted cash flow). “All of these elements lead to an undervaluation of the enterprise value of Orpea”, judged this report.

MPs get involved

These questions of valuation have moved to the political field. The director general of the Caisse des dépôts, Eric Lombard, and the chairman of its supervisory committee, Alexandre Holroyd, were heard on Wednesday by the deputies on the recapitalization of the group. Several elected officials have questioned and worried about the treatment of the group’s current shareholders. Alexandre Holroyd then referred to the analysis of the firm Ricol & Lasteyrie.

“This report was sponsored by funds, not from small shareholders, this report says that if we apply an ultra profitable model, the box has more value,” he said. “There is a deep philosophical difference: some actors consider that the objective is to squeeze the lemon, we consider that the objective is to cultivate the lemon tree”, he added.

“These shareholders are doing everything they can to try to question this operation and I note that some of these shareholders are very recent shareholders, who returned after the beginning of Orpea’s public setbacks, so we can assume that some shareholders are more interested in the financial operation than in the general interest”, continued Alexandre Holroyd.

Contacted by News Bulletin 247, Orpea did not comment on the stock market price and the Ricol&Lasteyrie report.