European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>According to daily Expansion, Ganz MaVag plans to reserve part of <a href="https://www.smartkarma.com/entities/talgo-sa" target="_blank" data-smartkarma-citation="entities:21301:1" rel="noopener">Talgo SA (TLGO SM)</a>'s share capital for one or more Spanish partners chosen by the Spanish Government. </li>
<li>Uncertainty over the approval process has lowered the price to €4.31, given the low likelihood of counteroffers and the uncertainty of a potentially prolonged process.</li>
<li>Gross spread is 13.8%, indicating uncertainty regarding timeline and development. The market is pricing a 39% probability of deal completion. Recommendation is sell on strength.</li>
</ul>


According to daily Expansion, Ganz MaVag plans to reserve part of Talgo SA (TLGO SM)'s share capital for one or more Spanish partners chosen by the Spanish Government. 
Uncertainty over the approval process has lowered the price to €4.31, given the low likelihood of counteroffers and the uncertainty of a potentially prolonged process.
Gross spread is 13.8%, indicating uncertainty regarding timeline and development. The market is pricing a 39% probability of deal completion. Recommendation is sell on strength.


Ganz MaVag Offers Sweetener to Spanish Government

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

EURO STOXX 50 Price EUR / Technical Analysis

<ul>
<li>We continue to view the latest pullback as healthy and normal within the ongoing bull market on MSCI ACWI (ACWI-US) and the EURO STOXX 50, as discussed April 18</li>
<li>Discussed last Thursday(4/18/24) how further downside may be limited with these indexes 4-5% off their highs, combined with ACWI-US testing gap support ($105) and the EURO STOXX50 testing 6-month uptrend. </li>
<li>So far, these supports have held strong, and Japan's TOPIX has also held strong above 2615 support -- with all producing strong bounces far this week.</li>
</ul>


We continue to view the latest pullback as healthy and normal within the ongoing bull market on MSCI ACWI (ACWI-US) and the EURO STOXX 50, as discussed April 18
Discussed last Thursday(4/18/24) how further downside may be limited with these indexes 4-5% off their highs, combined with ACWI-US testing gap support ($105) and the EURO STOXX50 testing 6-month uptrend. 
So far, these supports have held strong, and Japan's TOPIX has also held strong above 2615 support -- with all producing strong bounces far this week.


Upgrading Europe to Overweight; Supports Holding on MSCI ACWI, ACWI Ex-US, EAFE, and EM

<ul>
<li>The Spanish Cabinet has agreed on the acquisition of up to 10% of the share capital of <a href="https://www.smartkarma.com/entities/telefonica-sa" target="_blank" data-smartkarma-citation="entities:21299:1" rel="noopener">Telefonica SA (TEF SM)</a> (c.€2.2 billion), higher than the 5% initially mentioned.</li>
<li>This should move the market as it represents 48 trading days. This also means that the Government will likely authorise the purchase of up to 9.9% by STC.</li>
<li>The Kingdom of Spain 10-y benchmark bond yield is 2.9%, while the 24e dividend yield of Telefonica is 8% (source: IBES), therefore the operation makes financial sense.</li>
</ul>


The Spanish Cabinet has agreed on the acquisition of up to 10% of the share capital of Telefonica SA (TEF SM) (c.€2.2 billion), higher than the 5% initially mentioned.
This should move the market as it represents 48 trading days. This also means that the Government will likely authorise the purchase of up to 9.9% by STC.
The Kingdom of Spain 10-y benchmark bond yield is 2.9%, while the 24e dividend yield of Telefonica is 8% (source: IBES), therefore the operation makes financial sense.


SEPI/Telefonica: Acquisition of a 10% Stake

<ul>
<li>The public holding company SEPI, controlled by the Spanish Treasury, has confirmed to the CNMV that it is studying the possibility of acquiring a stake in <a href="https://www.smartkarma.com/entities/telefonica-sa" target="_blank" data-smartkarma-citation="entities:21299:1" rel="noopener">Telefonica SA (TEF SM).</a>
</li>
<li>Market speculates with a 5% stake to counterbalance the current 4.9% stake of STC (which could execute an option to acquire another 5% pending Government authorisation).</li>
<li>At current market prices, it is equivalent to 22.04 trading sessions. Q3 results and Capital Markets Day, the first major strategic update in years, will take place on 8 November. </li>
</ul>


The public holding company SEPI, controlled by the Spanish Treasury, has confirmed to the CNMV that it is studying the possibility of acquiring a stake in Telefonica SA (TEF SM).

Market speculates with a 5% stake to counterbalance the current 4.9% stake of STC (which could execute an option to acquire another 5% pending Government authorisation).
At current market prices, it is equivalent to 22.04 trading sessions. Q3 results and Capital Markets Day, the first major strategic update in years, will take place on 8 November. 


<ul>
<li>Discounts to NAV of covered holdcos have either remained within same levels or widened during June: Alba, 40.3%; GBL, 34.7%; Heineken Holdings to 20.9%; Industrivärden C, 13.8%; Investor B, 15.6%; </li>
<li>Porsche Automobile Holding to 35.3%. Rio Tinto DLC widened to 23.4%.  Spreads tend to widen in bear markets but short term recoveries provide opportunities to bet on tightening discounts.</li>
<li>Recommended trades: Industrivärden C vs. listed assets, Rio Tinto (DLC).</li>
</ul>


Discounts to NAV of covered holdcos have either remained within same levels or widened during June: Alba, 40.3%; GBL, 34.7%; Heineken Holdings to 20.9%; Industrivärden C, 13.8%; Investor B, 15.6%; 
Porsche Automobile Holding to 35.3%. Rio Tinto DLC widened to 23.4%.  Spreads tend to widen in bear markets but short term recoveries provide opportunities to bet on tightening discounts.
Recommended trades: Industrivärden C vs. listed assets, Rio Tinto (DLC).


Selected European Holdcos and DLCs: June ‘22 Report

Spain

Indra Sistemas, S.A. offers information technology products and services.  The Company offers systems integration and outsourcing services, installs railway management and ticketing systems, installs road traffic toll and signaling systems, constructs satellite communications systems, manufactures radar air defense systems, and installs insurance management systems.

Price Gauge
52-week Range	0.00 - 0.00
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Indra Sistemas Sa (IDR SM)

Ganz MaVag Offers Sweetener to Spanish Government

According to daily Expansion, Ganz MaVag plans to reserve part of Talgo SA (TLGO SM)'s share capital for one or more Spanish partners chosen by the...

Jesus Rodriguez Aguilar

Upgrading Europe to Overweight; Supports Holding on MSCI ACWI, ACWI Ex-US, EAFE, and EM

Upgrading Europe to Overweight EURO $STOXX 50 $FEZ; Supports Holding on MSCI $ACWI, $ACWX, $EFA, and $EEM. Latest 4-6% pullback remains healthy...

Vermilion Research

SEPI/Telefonica: Acquisition of a 10% Stake

The Spanish government plans to acquire up to 10% of Telefonica, a higher percentage than initially mentioned, to counterbalance the acquisitions...

Jesus Rodriguez Aguilar

Back in Telefonica

SEPI, the Spanish Treasury's public holding company, is considering buying a stake in Telefonica SA, possibly around 5% to gain a seat in the...

Jesus Rodriguez Aguilar

Selected European Holdcos and DLCs: June ‘22 Report

Discounts to NAV of covered holdcos have either remained within same levels or widened during June. Spreads tend to widen in bear markets, it pays...

Jesus Rodriguez Aguilar

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Ganz MaVag Offers Sweetener to Spanish Government

According to daily Expansion, Ganz MaVag plans to reserve part of Talgo SA (TLGO SM)'s share capital for one or more Spanish partners chosen by the...

Jesus Rodriguez Aguilar

Upgrading Europe to Overweight; Supports Holding on MSCI ACWI, ACWI Ex-US, EAFE, and EM

Upgrading Europe to Overweight EURO $STOXX 50 $FEZ; Supports Holding on MSCI $ACWI, $ACWX, $EFA, and $EEM. Latest 4-6% pullback remains healthy...

Vermilion Research

SEPI/Telefonica: Acquisition of a 10% Stake

​The Spanish government plans to acquire up to 10% of Telefonica, a higher percentage than initially mentioned, to counterbalance the acquisitions...

Jesus Rodriguez Aguilar

Back in Telefonica

​SEPI, the Spanish Treasury's public holding company, is considering buying a stake in Telefonica SA, possibly around 5% to gain a seat in the...

Jesus Rodriguez Aguilar

Selected European Holdcos and DLCs: June ‘22 Report

Discounts to NAV of covered holdcos have either remained within same levels or widened during June. Spreads tend to widen in bear markets, it pays...

Jesus Rodriguez Aguilar

The Spanish government plans to acquire up to 10% of Telefonica, a higher percentage than initially mentioned, to counterbalance the acquisitions...

SEPI, the Spanish Treasury's public holding company, is considering buying a stake in Telefonica SA, possibly around 5% to gain a seat in the...