AlphaSituations-Event/Catalyst Driven Research, AlphaSituations

Robert Sassoon

AlphaSituations-Event/Catalyst Driven Research

AlphaSituations

Since its establishment, AlphaSituations has delivered a track record of outperformance with a hit rate of winners of more than 70% of its portfolio of ideas generating annualized average returns of 20%. In January 2022, AlphaSituations was contracted by Water Tower Research, an investor engagement and stakeholder communication platform to provide coverage of Special Situations

Event-Driven

Following resolution of the LVMH/TIF merger spat, the focus now shifts on the looming court case starting November 16 in Michegan set to hear the arguments for and against <a href="https://www.smartkarma.com/entities/simon-property-group-inc" target="_blank" data-smartkarma-citation="entities:6472:1" rel="noopener">Simon Property Group (SPG US)</a>'s attempt to walk away from its Merger Agreement with <a href="https://www.smartkarma.com/entities/taubman-centers-inc" target="_blank" data-smartkarma-citation="entities:11757:1" rel="noopener">Taubman Centers (TCO US)</a> .  Below, we look to answer the following questions.Are there any takeaways from the <a href="https://www.smartkarma.com/entities/lvmh-moet-hennessy-louis-vui" target="_blank" data-smartkarma-citation="entities:21072:1" rel="noopener">Lvmh Moet Hennessy Louis Vuitton (MC FP)</a> / <a href="https://www.smartkarma.com/entities/tiffany-co" target="_blank" data-smartkarma-citation="entities:14729:1" rel="noopener">Tiffany &amp; Co (TIF US)</a> case that can be applied to the SPG/TCO situation?Does it make a difference whether the arguments are heard in Michegan or Delaware, where merger agreement disputes are most commonly litigated in the US?We also assess the likely outcome and suggest the best way to play this event.

Following resolution of the LVMH/TIF merger spat, the focus now shifts on the looming court case starting November 16 in Michegan set to hear the arguments for and against Simon Property Group (SPG US)'s attempt to walk away from its Merger Agreement with Taubman Centers (TCO US) .  Below, we look to answer the following questions.Are there any takeaways from the Lvmh Moet Hennessy Louis Vuitton (MC FP) / Tiffany &amp; Co (TIF US) case that can be applied to the SPG/TCO situation?Does it make a difference whether the arguments are heard in Michegan or Delaware, where merger agreement disputes are most commonly litigated in the US?We also assess the likely outcome and suggest the best way to play this event.

MergerTalk: Simon Property Group/Taubman Centers Update - The Preferred Way To Play This Event

European Event-Driven Analyst

Jesus Rodriguez Aguilar

On 26 October the European Commission cleared <a href="https://www.smartkarma.com/entities/lvmh-moet-hennessy-louis-vui" target="_blank" data-smartkarma-citation="entities:21072:1" rel="noopener">Lvmh Moet Hennessy Louis Vuitton (MC FP)</a> proposed acquisition of <a href="https://www.smartkarma.com/entities/tiffany-co" target="_blank" data-smartkarma-citation="entities:14729:1" rel="noopener">Tiffany &amp; Co (TIF US)</a>, the U.S. jeweler said in an October 26 filing.
The <a href="https://www.wsj.com/articles/tiffany-lvmh-near-agreement-on-new-deal-terms-11603899275" target="_blank" rel="noopener">WSJ has reported today</a> that Tiffany is nearing an agreement to accept a lower price in its takeover by LVMH.
<ul>
<li>The companies have come to a preliminary agreement on new deal terms that would call for LVMH to pay $131.50, down from the prior $135.</li>
</ul>
I believe that the update shows a strong rebound from the lows brought upon by the Covid pandemic. Moreover, pessimism about Tiffany may be past the corner as the turnaround plan may finally be bearing fruit.
By applying a 26x to Capital IQ consensus estimate of $4.91 (EPS at FY 31 March 2023), I arrive at my price target of $127.66 per share of Tiffany. I believe that Tiffany should trade in line with LVMH's and Richemont's P/E.
The last months have witnessed a high stakes negotiation with threats of pulling the deal off and lawsuits, but Bernard Arnault likes to win, and he will presumably save $420 mn from the final tag. LVMH wants to grow in hard luxury and Tiffany represents a unique opportunity that will benefit from LVMH's savoir-faire. I believe that downside is limited and Tiffany's valuation is well supported by its future prospects. Gross spread is 1.2%. Recommendation is LONG TIF.

On 26 October the European Commission cleared Lvmh Moet Hennessy Louis Vuitton (MC FP) proposed acquisition of Tiffany &amp; Co (TIF US), the U.S. jeweler said in an October 26 filing.
The WSJ has reported today that Tiffany is nearing an agreement to accept a lower price in its takeover by LVMH.

The companies have come to a preliminary agreement on new deal terms that would call for LVMH to pay $131.50, down from the prior $135.

I believe that the update shows a strong rebound from the lows brought upon by the Covid pandemic. Moreover, pessimism about Tiffany may be past the corner as the turnaround plan may finally be bearing fruit.
By applying a 26x to Capital IQ consensus estimate of $4.91 (EPS at FY 31 March 2023), I arrive at my price target of $127.66 per share of Tiffany. I believe that Tiffany should trade in line with LVMH's and Richemont's P/E.
The last months have witnessed a high stakes negotiation with threats of pulling the deal off and lawsuits, but Bernard Arnault likes to win, and he will presumably save $420 mn from the final tag. LVMH wants to grow in hard luxury and Tiffany represents a unique opportunity that will benefit from LVMH's savoir-faire. I believe that downside is limited and Tiffany's valuation is well supported by its future prospects. Gross spread is 1.2%. Recommendation is LONG TIF.

Tiffany - LVMH: Preliminary Agreement at a Lower Price

IPO and L/S equity, 2015 Starmine top stock picker, Global Equity Research Ltd

Rickin Thakrar

IPO and L/S equity, 2015 Starmine top stock picker

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<a href="https://www.smartkarma.com/entities/tiffany-co" target="_blank" data-smartkarma-citation="entities:14729:1" rel="noopener">Tiffany &amp; Co (TIF US)</a> shares have recovered strongly after Reuters reported that Tiffany and LVMH are near a deal to agree to a 131.5 USD deal price (original at 135 USD) which represents c.2.5% discount to the original deal terms, despite previous attempts by LVMH to walk away from the deal. Our updated thoughts are below.

Tiffany &amp; Co (TIF US) shares have recovered strongly after Reuters reported that Tiffany and LVMH are near a deal to agree to a 131.5 USD deal price (original at 135 USD) which represents c.2.5% discount to the original deal terms, despite previous attempts by LVMH to walk away from the deal. Our updated thoughts are below.

LVMH-Tiffany – Reported Deal Between LVMH and Tiffany at Mild Discount to Original Price

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Last Week in Event SPACE: Vedanta, Cardinal Res., Japan Retail Fund, HSBC, Opticomm, Tiffany/LVMH

Managing Director

Elan Gore

TMI Data Science

TMI Data Science utilizes Natural Language Processing to build custom leading indicators using unstructured data sourced from the global financial, trade & traditional media.  Our proprietary software, TMI Machine, is a text-mining platform designed with the buy-side & capital markets professional in mind, text-mining the global media to discern and quantify nuanced qualitative shifts in press coverage as they apply to macroeconomics, equity indexes/ETFs, commodities, currencies, fixed income & individual equities.  TMI provides custom leading indicators and systematic trading strategies, operating at the nexus of linguistics & statistics drawing on vast experience in investment banking and hedge fund settings in senior quantitative and fundamental roles.  

TMI Data Science was founded by Elan Gore, an award-winning Senior Global Basic Materials Equity Analyst & China Economist with 15 years of experience in North American hedge funds & institutional managers; and Alessandro Porrino, Ph.D., an Algorithmic Trading Analyst and Programmer with 10 years of front-office experience ranging from complex FX option pricing to auto-hedging strategies at Bank of America Merrill Lynch and Standard Chartered.  Mr. Gore holds an MBA in Finance from New York University Stern School of Business, and Mr. Porrino holds a Ph.D. in Systems Engineering from Brunel University London.

Quantitative Analysis

In light of recent LVMH/Tiffany headlines, we went back to TMI's Luxury Goods Sentiment Indicator and app analytics for a quick update on the state of luxury via alt-data.  TMI's Luxury Goods Sentiment Indicator has been consistently in positive territory since May, having been boosted by somewhat controversial notions of "revenge spending" popularized earlier in the pandemic with mostly anecdotal evidence.  We have also aggregated App Store data for key luxury shopping apps in key jurisdictions to find that overall App performance has been robust, aided by a recent surge in US downloads and continued growth in China, while HK and Singapore recently lag.

In light of recent LVMH/Tiffany headlines, we went back to TMI's Luxury Goods Sentiment Indicator and app analytics for a quick update on the state of luxury via alt-data.  TMI's Luxury Goods Sentiment Indicator has been consistently in positive territory since May, having been boosted by somewhat controversial notions of "revenge spending" popularized earlier in the pandemic with mostly anecdotal evidence.  We have also aggregated App Store data for key luxury shopping apps in key jurisdictions to find that overall App performance has been robust, aided by a recent surge in US downloads and continued growth in China, while HK and Singapore recently lag.

TMI Snapshot:  Luxury Goods Sentiment Steadily Positive, As App Analytics Show Ongoing Recovery

France

LVMH Moet Hennessy Louis Vuitton SE is a diversified luxury goods group. The Company produces and sells wine, cognac, perfumes, cosmetics, luggage, and watches and jewelry.

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Lvmh Moet Hennessy Louis Vuitton (MC FP)

MergerTalk: Simon Property Group/Taubman Centers Update - The Preferred Way To Play This Event

We set out the arguments why we expect the SPG/TCO merger dispute will likely result in a settlement and why the Preferreds and not the Common may...

Robert Sassoon

Tiffany - LVMH: Preliminary Agreement at a Lower Price

The last months have witnessed a high stakes negotiation, but Bernard Arnault likes to win. I believe that the deal will close, downside is limited...

Jesus Rodriguez Aguilar

LVMH-Tiffany – Reported Deal Between LVMH and Tiffany at Mild Discount to Original Price

Tiffany shares have recovered strongly after the press reported that Tiffany and LVMH are near a 131.5 USD deal price (original at 135 USD), a 2.5%...

Rickin Thakrar

Last Week in Event SPACE: Vedanta, Cardinal Res., Japan Retail Fund, HSBC, Opticomm, Tiffany/LVMH

Last Week in Event SPACE ... Plus, other events, CCASS movements and Mood Spins. (This insight covers specific insights & comments...

David Blennerhassett

TMI Snapshot: Luxury Goods Sentiment Steadily Positive, As App Analytics Show Ongoing Recovery

In light of recent LVMH/TIF headlines

Elan Gore

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