Founder at Stock Spin-off Investing, Stock Spin-Off Investing

Richard Howe

Founder at Stock Spin-off Investing

Stock Spin-Off Investing

Generate attractive returns by taking advantage of inefficiencies in the stock spin-off market.

Stock Spin-offs

Event-Driven

Havas SA offers advertising, and media consultation and production services. The Company operates in many countries throughout Europe, North America, and the Asia Pacific Region.  Havas provides public relations, sales promotion, media planning, and advertising services to major corporations.

<ul><li>Havas is a recent spin-off from Vivendi.</li><li>Havas delivered record financial results in 2024, with net revenue of €2,736 million (+1.5% y/y) and all-time high adjusted EBIT of €338 million (12.4% margin).</li><li>The company exited 2024 in a net cash position of €211 million, providing a strong balance sheet to fund growth and shareholder returns.</li></ul>

Havas is a recent spin-off from Vivendi.Havas delivered record financial results in 2024, with net revenue of €2,736 million (+1.5% y/y) and all-time high adjusted EBIT of €338 million (12.4% margin).The company exited 2024 in a net cash position of €211 million, providing a strong balance sheet to fund growth and shareholder returns.

European Event-Driven Analyst

Jesus Rodriguez Aguilar

Rio Tinto plc is an international mining company. The Company has interests in mining for aluminum, borax, coal, copper, gold, iron ore, lead, silver, tin, uranium, zinc, titanium dioxide feedstock, diamonds, talc and zircon. Dually-listed company with RIO AU.

<ul>
<li>Discounts to NAV of covered holdcos <strong>didn't show a clear trend during March</strong>. Discounts: C.F.Alba, 14.9% as of 31 March (vs 14.1% as of 28 February); GBL, 37.6% (vs. 38.7%);</li>
<li>Heineken Holding, 11.2% (vs. 13%); Industrivärden C, 2.9% (vs. 5.1%); Investor B, 4.2% (vs. 2.3%); Porsche Automobile Holding, 31.9% (vs. 38.1%); Rio DLC 21.7% (vs. 17%). Vivendi 40.1% (vs. 38.7%). </li>
<li>What seems interesting (unchanged views): Porsche SE vs. listed assets and the Rio DLC (long RIO LN/short RIO AU).</li>
</ul>


Discounts to NAV of covered holdcos didn't show a clear trend during March. Discounts: C.F.Alba, 14.9% as of 31 March (vs 14.1% as of 28 February); GBL, 37.6% (vs. 38.7%);
Heineken Holding, 11.2% (vs. 13%); Industrivärden C, 2.9% (vs. 5.1%); Investor B, 4.2% (vs. 2.3%); Porsche Automobile Holding, 31.9% (vs. 38.1%); Rio DLC 21.7% (vs. 17%). Vivendi 40.1% (vs. 38.7%). 
What seems interesting (unchanged views): Porsche SE vs. listed assets and the Rio DLC (long RIO LN/short RIO AU).


Selected European HoldCos and DLC: March 2025 Report, Adding Vivendi

Grifols S.A. develops, manufactures, and markets plasma derivatives, IV Therapy, enteral nutrition, diagnostic systems, and medical materials.

<ul>
<li>Brookfield has renewed takeover interest in Grifols after a failed bid, signaling confidence in the company’s turnaround and prompting investor speculation about a significantly improved future offer.</li>
<li>Grifols’ financial position has strengthened with a 4.6x Net Debt/EBITDA, €504 million in free cash flow, and strategic refinancing, reducing the likelihood of a capital increase and supporting shareholder value.</li>
<li>Grifols B shares trade at a 21.6% discount to A shares, offering an attractive convergence opportunity, as bylaws mandate equal treatment in the event of a public acquisition offer.</li>
</ul>


Brookfield has renewed takeover interest in Grifols after a failed bid, signaling confidence in the company’s turnaround and prompting investor speculation about a significantly improved future offer.
Grifols’ financial position has strengthened with a 4.6x Net Debt/EBITDA, €504 million in free cash flow, and strategic refinancing, reducing the likelihood of a capital increase and supporting shareholder value.
Grifols B shares trade at a 21.6% discount to A shares, offering an attractive convergence opportunity, as bylaws mandate equal treatment in the event of a public acquisition offer.


Blood, Sweat, and Bids: Grifols Draws Renewed Interest from Brookfield

Vivendi SE provides culture, entertainment, media, and communication services. The Company specializes in audiovisual and cinema, communications, magazines, gaming, live performance, and distribution platform activities. Vivendi serves customers worldwide.

<ul>
<li>Vivendi executed a landmark three-way spin-off in December 2024, <em>aiming</em> (but not succeeding) to eliminate its conglomerate discount and unlock shareholder value by listing Canal+, Havas, and Louis Hachette separately.</li>
<li>Following Telecom Italia's strategic unwinding, Vivendi incurred over €2 billion in losses but recovered nearly €1 billion in cash through divestments, highlighting its shift toward portfolio streamlining and deleveraging.</li>
<li>Vivendi now operates as a focused investment holding with UMG comprising over 60% of its asset base, but high concentration and equity beta expose the group to significant portfolio risk.</li>
</ul>


Vivendi executed a landmark three-way spin-off in December 2024, aiming (but not succeeding) to eliminate its conglomerate discount and unlock shareholder value by listing Canal+, Havas, and Louis Hachette separately.
Following Telecom Italia's strategic unwinding, Vivendi incurred over €2 billion in losses but recovered nearly €1 billion in cash through divestments, highlighting its shift toward portfolio streamlining and deleveraging.
Vivendi now operates as a focused investment holding with UMG comprising over 60% of its asset base, but high concentration and equity beta expose the group to significant portfolio risk.


Initiating Coverage Of "New" Vivendi, Latest Portfolio Disposals

Fortnox AB provides internet-based business software programs for office applications including accountancy, bookkeeping, payroll, and invoicing.

<ul>
<li>EQT and First Kraft’s SEK 90 per share bid values Fortnox at SEK 54.9 billion, offering a 38% premium and reflecting confidence in Fortnox’s high-growth, high-margin SaaS model.</li>
<li>Fortnox’s Board, supported by a fairness opinion, unanimously recommends the offer. Olof Hallrup’s 18.9% stake is committed, making competing bids highly unlikely.</li>
<li>The current gross spread is 4.36%, offering an estimated annualized return of 20.1% to arbitrage investors, assuming a purchase at SEK 86.24 and settlement by late June.</li>
</ul>


EQT and First Kraft’s SEK 90 per share bid values Fortnox at SEK 54.9 billion, offering a 38% premium and reflecting confidence in Fortnox’s high-growth, high-margin SaaS model.
Fortnox’s Board, supported by a fairness opinion, unanimously recommends the offer. Olof Hallrup’s 18.9% stake is committed, making competing bids highly unlikely.
The current gross spread is 4.36%, offering an estimated annualized return of 20.1% to arbitrage investors, assuming a purchase at SEK 86.24 and settlement by late June.


European event-driven, risk-arb & special-sits