European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>On 31 May the acceptance period started, it will run until 14 June (inclusive). The adjusted offer price is €7.2 (around 50% of NAV, not too generous in my view).</li>
<li>Slim seeks to build a large real estate landlord and developer. Top shareholders are Santander and BBVA (49.5% and 20.9% respectively), but cannot tender without booking losses on their stakes.</li>
<li>In the long term, this stock should be worth more, albeit it won't be very liquid. For now, gross spread is 1.8% (est. 33% annual return). Long.</li>
</ul>


On 31 May the acceptance period started, it will run until 14 June (inclusive). The adjusted offer price is €7.2 (around 50% of NAV, not too generous in my view).
Slim seeks to build a large real estate landlord and developer. Top shareholders are Santander and BBVA (49.5% and 20.9% respectively), but cannot tender without booking losses on their stakes.
In the long term, this stock should be worth more, albeit it won't be very liquid. For now, gross spread is 1.8% (est. 33% annual return). Long.


Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>The <a href="https://www.smartkarma.com/entities/naspers-ltd" target="_blank" data-smartkarma-citation="entities:21085:1" rel="noopener">Naspers (NPN SJ)</a> / <a href="https://www.smartkarma.com/entities/prosus-nv" target="_blank" data-smartkarma-citation="entities:28104:1" rel="noopener">Prosus (PRX NA)</a> circularity was too complex. Lots of people hated it. It was actually easier than most thought, but optically was difficult to reconcile. </li>
<li>
<a href="https://www.smartkarma.com/entities/swire-pacific-ltd-cl-a" target="_blank" data-smartkarma-citation="entities:10433:1" rel="noopener">Swire Pacific (19 HK)</a> was a clear buy: there is no justification for assigning a similar discount for cash from the US Coke ops as you would to unlisted ops</li>
<li>A residual <a href="https://www.smartkarma.com/entities/nippon-telegraph-telephone-corporation" target="_blank" data-smartkarma-citation="entities:623:1" rel="noopener">NTT (9432 JP)</a> individual small-holder shareholding tenure reward does not get split 25:1 when the stock gets split 25:1. It doesn't mean much, but it's an interesting artefact. </li>
</ul>


The Naspers (NPN SJ) / Prosus (PRX NA) circularity was too complex. Lots of people hated it. It was actually easier than most thought, but optically was difficult to reconcile. 

Swire Pacific (19 HK) was a clear buy: there is no justification for assigning a similar discount for cash from the US Coke ops as you would to unlisted ops
A residual NTT (9432 JP) individual small-holder shareholding tenure reward does not get split 25:1 when the stock gets split 25:1. It doesn't mean much, but it's an interesting artefact. 


Last Week in Event SPACE: Naspers/Prosus, Swire Pacific, NTT, Aussie Tax-Loss Selling

Fomento De Construcciones Y Contratas / Event-Driven

<ul>
<li>On 28 June, after market close <a href="https://www.smartkarma.com/entities/fomento-de-construcciones-y-co" target="_blank" data-smartkarma-citation="entities:21269:1" rel="noopener">Fomento De Construcciones Y Co (FCC SM)</a> announced the repurchase and redemption of 7% of its shares at €12.5/share (38% premium, €5.4 billion implied market cap).</li>
<li>According to my calculations, Carlos Slim will hold, directly and indirectly, c. 88.2% of the share capital post repurchase. That, to me, heralds a delisting offer further down the road.</li>
<li>The offer represents 7.1x EV/Fwd EBITDA, 8.9x Fwd P/E (on IBES forecasts). Median TP is €14.7. Gross spread is 5.3% (plus the €0.5 dividend). It seems a safe long.</li>
</ul>


On 28 June, after market close Fomento De Construcciones Y Co (FCC SM) announced the repurchase and redemption of 7% of its shares at €12.5/share (38% premium, €5.4 billion implied market cap).
According to my calculations, Carlos Slim will hold, directly and indirectly, c. 88.2% of the share capital post repurchase. That, to me, heralds a delisting offer further down the road.
The offer represents 7.1x EV/Fwd EBITDA, 8.9x Fwd P/E (on IBES forecasts). Median TP is €14.7. Gross spread is 5.3% (plus the €0.5 dividend). It seems a safe long.


Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

<ul>
<li>S&amp;P DJI commenced a market consultation for the S&amp;P Global Water Index on 29 July and that could lead to quite a few changes to the index in October.</li>
<li>We currently see 14 deletions and 10 inclusions for the index in October. Most of the changes will have a high impact from passive fund trading.</li>
<li>There could be more changes in April 2023 once stocks listed in Emerging Markets are included in the index.</li>
</ul>


S&amp;P DJI commenced a market consultation for the S&amp;P Global Water Index on 29 July and that could lead to quite a few changes to the index in October.
We currently see 14 deletions and 10 inclusions for the index in October. Most of the changes will have a high impact from passive fund trading.
There could be more changes in April 2023 once stocks listed in Emerging Markets are included in the index.


S&P Global Water Index: Market Consultation Driven Potential Changes

<ul>
<li>
<a href="https://www.smartkarma.com/entities/fomento-de-construcciones-y-co" target="_blank" data-smartkarma-citation="entities:21269:1" rel="noopener">Fomento De Construcciones Y Co (FCC SM)</a> launches an offer to buy 24% of <a href="https://www.smartkarma.com/entities/metrovacesa-sa" target="_blank" data-smartkarma-citation="entities:28925:1" rel="noopener">Metrovacesa SA (MVC SM)</a> for €284 million, €7.8/share, cum dividend, in cash (implied EV €1,271.7 million).</li>
<li>The offer represents 19.4 EV/22e EBITDA, and a whopping c. 50% discount to NAV. Reference shareholders (Santander and BBVA) own 70.21% of Metrovacesa. Gross spread is 3.5%.</li>
<li>Considering recent underperformance of the shares, most free float shareholders will tender, in my view. Closing of the offer should happen in less than six months. Long and tender.</li>
</ul>



Fomento De Construcciones Y Co (FCC SM) launches an offer to buy 24% of Metrovacesa SA (MVC SM) for €284 million, €7.8/share, cum dividend, in cash (implied EV €1,271.7 million).
The offer represents 19.4 EV/22e EBITDA, and a whopping c. 50% discount to NAV. Reference shareholders (Santander and BBVA) own 70.21% of Metrovacesa. Gross spread is 3.5%.
Considering recent underperformance of the shares, most free float shareholders will tender, in my view. Closing of the offer should happen in less than six months. Long and tender.


FCC/Metrovacesa: Opportunistic Voluntary Partial Offer

Spain

Fomento de Construcciones y Contratas S.A. (FCC) offers construction services and manufactures building materials.  The Company offers civil engineering services, constructs housing and commercial buildings, roads, and other infrastructure projects, develops real estate, collects, treats, and disposes of solid waste, markets street cleaning machines, and produces cement.

Fomento De Construcciones Y Contratas (FCC SM)

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Fomento De Construcciones Y Contratas (FCC SM)

FCC/Metrovacesa: Acceptance Period

The acceptance period will last until 14 June. This stock, because of its lower liquidity, has been under the radar, but some hedge funds have...

Jesus Rodriguez Aguilar

Last Week in Event SPACE: Naspers/Prosus, Swire Pacific, NTT, Aussie Tax-Loss Selling

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

Take Private Looming

FCC SM will repurchase and amortise 7% of share capital at €12.5/share (38% premium vs. 6-month VWAP). Post-completion, free float will be c. 6.8%.

Jesus Rodriguez Aguilar

S&P Global Water Index: Market Consultation Driven Potential Changes

S&P DJI's market consultation for the S&P Global Water Index could lead to quite a few changes to the index in October. There are a few potential...

Brian Freitas

FCC/Metrovacesa: Opportunistic Voluntary Partial Offer

The offer price is not particularly generous for Metrovacesa's shareholders, although considering the underperformance of the shares, I believe a...

Jesus Rodriguez Aguilar

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