European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>KKR offers €17.50/share for <a href="https://www.smartkarma.com/entities/encavis-ag" target="_blank" data-smartkarma-citation="entities:21595:1" rel="noopener">Encavis AG (ECV GR)</a>, 53% premium, implied equity value of €2,818 million. This shows interest in renewables after the falls on the stock market in 2023-24.</li>
<li>The offer represents 12.7x EV/Fwd NTM EBITDA and 32.4x Fwd P/E. On  a P/E basis, the offer seems fair vs. (depressed) comparables.</li>
<li>Given the current negative perception surrounding renewable energy companies, I think the shareholders are likely to tender at an attractive price. Spread is 3.77%/5.24% (gross/anualised, assuming closing by mid-December).</li>
</ul>


KKR offers €17.50/share for Encavis AG (ECV GR), 53% premium, implied equity value of €2,818 million. This shows interest in renewables after the falls on the stock market in 2023-24.
The offer represents 12.7x EV/Fwd NTM EBITDA and 32.4x Fwd P/E. On  a P/E basis, the offer seems fair vs. (depressed) comparables.
Given the current negative perception surrounding renewable energy companies, I think the shareholders are likely to tender at an attractive price. Spread is 3.77%/5.24% (gross/anualised, assuming closing by mid-December).


<ul>
<li>On June 24, a share purchase agreement was signed between Brookfield and several shareholders, to acquire 53.12% of Neoen's outstanding shares at €39.85/share. Brookfield has also received irrevocables for 4.36%.</li>
<li>The offer price is generous and this looks a done deal. Spread 5.19%/7.29% (gross/annualised) seems interesting in spite of the longer approval process in energy deals.</li>
<li>The convertible NEOEN 2.875 14-SEP-2027 has a balanced profile. It is trading at (mid) 100.75 (vs. €37.82), vs. a fair price estimate of 113.773.</li>
</ul>


On June 24, a share purchase agreement was signed between Brookfield and several shareholders, to acquire 53.12% of Neoen's outstanding shares at €39.85/share. Brookfield has also received irrevocables for 4.36%.
The offer price is generous and this looks a done deal. Spread 5.19%/7.29% (gross/annualised) seems interesting in spite of the longer approval process in energy deals.
The convertible NEOEN 2.875 14-SEP-2027 has a balanced profile. It is trading at (mid) 100.75 (vs. €37.82), vs. a fair price estimate of 113.773.


Brookfield/Neoen: Share Purchase Agreement, Spread and Convertibles

<ul>
<li>
<a href="https://www.smartkarma.com/entities/brookfield-corp-e3b4f84d-56b4-4ae2-87f3-1c3e83138aea" target="_blank" data-smartkarma-citation="entities:25297:1" rel="noopener">Brookfield (BN CN)</a> has entered exclusive negotiations with the top shareholders of <a href="https://www.smartkarma.com/entities/neoen-sa" target="_blank" data-smartkarma-citation="entities:33002:1" rel="noopener">Neoen (NEOEN FP)</a> to acquire a 53.32% stake at €39.85/share, 26.9% premium, which will trigger a mandatory offer.</li>
<li>The offer represents 15.1x EV/NTM Fwd EBITDA vs. the median of peers at 9.3x. My fair-value estimate (DCF-based) is €33.76/share, therefore the offer is generous, in my view.</li>
<li>Expect the shares to close the spread tomorrow and trade around 3% gross spread and the convertibles to price higher (2% 06/25 at around €51.85, 2.875% 09/27 around 111.72%).</li>
</ul>



Brookfield (BN CN) has entered exclusive negotiations with the top shareholders of Neoen (NEOEN FP) to acquire a 53.32% stake at €39.85/share, 26.9% premium, which will trigger a mandatory offer.
The offer represents 15.1x EV/NTM Fwd EBITDA vs. the median of peers at 9.3x. My fair-value estimate (DCF-based) is €33.76/share, therefore the offer is generous, in my view.
Expect the shares to close the spread tomorrow and trade around 3% gross spread and the convertibles to price higher (2% 06/25 at around €51.85, 2.875% 09/27 around 111.72%).


Brookfield to Launch Mandatory Offer for Neoen

Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

<ul>
<li>In this insight, we take a look at the potential ADDs/DELs for the DAX index and the MDAX index in the run up to the June 2024 index rebal event.</li>
<li>There could be two regular MDAX changes in June including the long-anticipated deletion of M&amp;A candidate <a href="https://www.smartkarma.com/entities/morphosys-ag" target="_blank" data-smartkarma-citation="entities:21675:1" rel="noopener">MorphoSys AG (MOR GR)</a>. </li>
<li>We do not see any changes for the DAX index based on the current numbers.</li>
</ul>


In this insight, we take a look at the potential ADDs/DELs for the DAX index and the MDAX index in the run up to the June 2024 index rebal event.
There could be two regular MDAX changes in June including the long-anticipated deletion of M&amp;A candidate MorphoSys AG (MOR GR). 
We do not see any changes for the DAX index based on the current numbers.


Quiddity Leaderboard DAX/MDAX Jun 24: Hellofresh MDAX Deletion Hinges on Encavis Tender Offer Result

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

<ul>
<li>Even if you were an activist, or a trader with an activism tilt, be long <a href="https://www.smartkarma.com/entities/keisei-electric-railway-co" target="_blank" data-smartkarma-citation="entities:10876:1" rel="noopener">Keisei Electric Railway Co (9009 JP)</a> vs. <a href="https://www.smartkarma.com/entities/oriental-land-co-ltd" target="_blank" data-smartkarma-citation="entities:13517:1" rel="noopener">Oriental Land (4661 JP)</a>.</li>
<li>Reportedly, <a href="https://www.smartkarma.com/entities/singapore-telecommunications" target="_blank" data-smartkarma-citation="entities:20:1" rel="noopener">Singtel (ST SP)</a> is negotiating a sale of Optus. Both Singtel and Optus scotch those rumours. </li>
<li>
<a href="https://www.smartkarma.com/entities/alumina-ltd" target="_blank" data-smartkarma-citation="entities:939:1" rel="noopener">Alumina Ltd (AWC AU)</a> and <a href="https://www.smartkarma.com/entities/alcoa-corp" target="_blank" data-smartkarma-citation="entities:6510:1" rel="noopener">Alcoa (AA US)</a> enter into a Scheme. As expected. The key question: is CITIC, with 18.9% of shares out, supportive?</li>
</ul>


Even if you were an activist, or a trader with an activism tilt, be long Keisei Electric Railway Co (9009 JP) vs. Oriental Land (4661 JP).
Reportedly, Singtel (ST SP) is negotiating a sale of Optus. Both Singtel and Optus scotch those rumours. 

Alumina Ltd (AWC AU) and Alcoa (AA US) enter into a Scheme. As expected. The key question: is CITIC, with 18.9% of shares out, supportive?


Last Week in Event SPACE: Keisei Electric /Oriental Land, SingTel, Alumina/Alcoa, Li Ning

Germany

Lechwerke AG generates, procures and distributes electric power, natural gas, district heating and water to commercial and residential customers in Southeastern Germany.  The Company divides its activities in such sectors as: energy production, network management and network services, energy and others.

Mainova AG provides natural gas to households, industrial companies and municipalities in the Frankfurt am Main area. The Company distributes electricity, heat and steam and supplies heating equipment to its customers. Mainova constructs power generating facilities and gas pipelines. The Company also provides services in western Thuringia.

MVV Energie AG generates and distributes electric power and district heating, purchases electricity from a cogeneration plant and operates its own waste-to-energy plant.  MVV Energie also distributes natural gas and water and offers a range of related services including energy trading, energy services, contracting, consulting, and facilities management.

Gelsenwasser AG provides water, natural gas, electricity and local co-generation services to households, municipal distributors and industries primarily located in Ruhr, Muensterland, lower Rhein and Eastern Westphalia.  The Company also offers services in other regions and operates sewage treatment plants.

RWE Aktiengesellschaft is a globally active energy company. The Company generates and trades electricity. RWE has a capacity of about 10 gigawatts based on renewable sources, as well as gas fleet and an internationally active energy trading business. RWE serves clients in Europe, Asia-Pacific, and the United States.

Uniper SE operates as an international energy company. The Company owns and manages a portfolio of power plants located across Europe and Russia, as well as focuses on commodity trading business, such as power, emission certificates, natural gas, liquefied natural gas, coal, and freight. Uniper also operates power and gas storage facilities.

EnBW Energie Baden-Wuerttemberg AG is a full service energy company that provides electricity, , gas as well as energy and environmental services. The Company's environmental services include waste disposal and recycling.

E.ON is one of Europe's largest operators of energy networks and energy infrastructure and a provider of innovative customer solutions for some 51 million customers. The company's operations are energy networks and customer solutions.

Electric Power Development Co.,Ltd. generates, transmits, distributes, and sells electric power using hydroelectric, wind-power, nuclear, coal-fired and other thermal power stations throughout Japan.

Clearway Energy, Inc. owns, operates, and acquires renewable and conventional generation and thermal infrastructure projects. The Company offers natural gas and dual fired, solar and wind generation and distribution services. Clearway Energy serves commercial businesses, universities, hospitals, and government companies in the United States.

Guangzhou Development Group Inc operates an electric power generation plant in Guangzhou, China.  The Company also sells coal, invests in the fiber-optic cable network installation business, and constructs roads and bridges.

An Hui Wenergy Co., Ltd. generates electric power.  Through its subsidiaries, the company also manufactures networking terminal products.

Beijing Jingneng Power Co., Ltd. generates electrical and thermal power.  The Company also maintains and repairs electricity generation equipment.

Drax Group PLC generates and supplies electricity.  The Company owns a coal and biomass-fired power plant in the United Kingdom.

The Renewables Infrastructure Group Limited is an investment company. The Company invests in a range of assets that generate electricity from renewable sources, with a particular focus on onshore wind farms and solar PV parks.

Global Power Synergy Company Ltd. (GPSC) provides utilities services. The Company generates and distributes electricity, steam, and processed water. GPSC serves customers in Thailand.

Global Power Synergy Company Ltd (GPSC TB)

Enel Generacion Chile SA operates as an electricity generation company. The Company generates and distributes electric energy.

Encavis AG provides electricity generation from power plants. The Company produces power from renewable energy sources which includes solar energy plants and wind farms, as well as specializes in the technical operation of solar parks, routine maintenance, monitoring, incident management, and performance analysis. Encavis serves renewable energy sector in Europe.

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Encavis AG (ECV GR)

KKR/Encavis AG: Voluntary Offer

KKR offers €17.50/share for Encavis AG, showing interest in renewables post-stock market falls. Offer seems fair vs. comparables. Shareholders...

Jesus Rodriguez Aguilar

Brookfield to Launch Mandatory Offer for Neoen

Brookfield (BN CN) has entered exclusive negotiations with the top shareholders of Neoen (NEOEN FP) to acquire a 53.32% stake at €39.85/share,...

Jesus Rodriguez Aguilar

Quiddity Leaderboard DAX/MDAX Jun 24: Hellofresh MDAX Deletion Hinges on Encavis Tender Offer Result

Hellofresh could be deleted from the MDAX index in June 2024. However, this depends on the final outcome of the Encavis Tender Offer.

Janaghan Jeyakumar, CFA

Last Week in Event SPACE: Keisei Electric /Oriental Land, SingTel, Alumina/Alcoa, Li Ning

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

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52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

KKR/Encavis AG: Voluntary Offer

​KKR offers €17.50/share for Encavis AG, showing interest in renewables post-stock market falls. Offer seems fair vs. comparables. Shareholders...

Jesus Rodriguez Aguilar

Brookfield/Neoen: Share Purchase Agreement, Spread and Convertibles

On June 24, a share purchase agreement was signed between Brookfield and several shareholders, to acquire 53.12% of Neoen's outstanding shares at...

Jesus Rodriguez Aguilar

Brookfield to Launch Mandatory Offer for Neoen

Brookfield (BN CN) has entered exclusive negotiations with the top shareholders of Neoen (NEOEN FP) to acquire a 53.32% stake at €39.85/share,...

Jesus Rodriguez Aguilar

Quiddity Leaderboard DAX/MDAX Jun 24: Hellofresh MDAX Deletion Hinges on Encavis Tender Offer Result

Hellofresh could be deleted from the MDAX index in June 2024. However, this depends on the final outcome of the Encavis Tender Offer.

Janaghan Jeyakumar, CFA

Last Week in Event SPACE: Keisei Electric /Oriental Land, SingTel, Alumina/Alcoa, Li Ning

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

KKR offers €17.50/share for Encavis AG, showing interest in renewables post-stock market falls. Offer seems fair vs. comparables. Shareholders...