Smartkarma Research Team, Smartkarma

Smartkarma Research

Smartkarma Research Team

Smartkarma

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Research Reinvented

Event-Driven

For our next Smartkarma Webinar, we have the pleasure of welcoming back Insight Provider <a href="https://www.smartkarma.com/profiles/jesus-rodriguez-aguilar" target="_blank" data-smartkarma-citation="accounts:5842" rel="noopener">Jesus Rodriguez Aguilar</a> to go over ideas in European Event-Driven. Jesus will examine offers that target FTSE 250 companies (particularly in healthcare and financial services); the real estate sector in Central and Eastern Europe; and special situations in European share classes and holding companies.
<h3>The webinar was hosted on Wednesday, 16 June 2021, 17:00 SGT/HKT.<a href="https://share.hsforms.com/1H9pFZOB-RF2J00kbvMmxcw2c5gj?zoom_webinar_id=89974520966" target="_blank" rel="noopener"></a>
</h3>
Watch the session here:
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Jesus Rodriguez Aguilar is an Event-Driven Analyst looking across sectors at opportunities arising from securities mispricing (both credit and equity), share classes, bid announcements, prospective bids, and special situations.

For our next Smartkarma Webinar, we have the pleasure of welcoming back Insight Provider Jesus Rodriguez Aguilar to go over ideas in European Event-Driven. Jesus will examine offers that target FTSE 250 companies (particularly in healthcare and financial services); the real estate sector in Central and Eastern Europe; and special situations in European share classes and holding companies.
The webinar was hosted on Wednesday, 16 June 2021, 17:00 SGT/HKT.

Watch the session here:
Or subscribe to our podcast feed and listen on the go:

Jesus Rodriguez Aguilar is an Event-Driven Analyst looking across sectors at opportunities arising from securities mispricing (both credit and equity), share classes, bid announcements, prospective bids, and special situations.

Smartkarma Webinar | European Event-Driven: Top Ideas

European Event-Driven Analyst

Jesus Rodriguez Aguilar

Societa Cattolica di Assicurazioni / Event-Driven

On 31 May, <a href="https://www.smartkarma.com/entities/assicurazioni-generali-spa" target="_blank" data-smartkarma-citation="entities:21191:1" rel="noopener">Assicurazioni Generali (G IM)</a> SpA launched a voluntary tender offer to acquire the 76.33 of <a href="https://www.smartkarma.com/entities/societa-cattolica-di-assicuraz" target="_blank" data-smartkarma-citation="entities:21168:1" rel="noopener">Societa Cattolica Di Assicuraz (CASS IM)</a> it does not already own.
Generali will offer €6.75/share, cum dividend.
<ul>
<li>
A 15.3% premium to Cattolica's closing share price on 28 May 28, for an implied equity value of €1,541.3 mn and an implied EV of €2,437.3 mn. The offer represents 0.67x P/21e BV and 11.2x Fwd P/E. 
</li>
<li>
In case of total acceptance of the offer, at the current bid price, Generali will pay a consideration of €1.176 bn.
</li>
<li>
Minimum acceptance condition: 66.67% of the share capital, which could be lowered to 50% plus one share.
</li>
<li>
Synergies in operating costs, technical ratios and revenues, are estimated to reach a run-rate pre-tax of more than €80 mn p.a., with cost of synergies €150 mn - €200 mn.
</li>
<li>
Generali expects the transaction to finalize by mid-November 2021, subject to all necessary approvals and authorizations. There should not be any antitrust issues, as in any of the three main segments, combined market share would be around 20%.
</li>
</ul>
On 31 May, shares of Cattolica closed at €6.97, a 15% increase vs. the prior trading session and 3.2% above the offer. Cattolica trades at 0.7x vs an 0.9x average of Italian insurers.
Fair value on a standalone basis is €6.64/share (average of comparables median implied Fwd P/E and discounted excess returns, WACC = 8.5%, g=1.8%, estimates from Capital IQ).
Synergies, taxed and capitalized, could be worth up to €1.28/share. Assuming that Cattolica's shareholders capture 60% of the PV of those synergies, TP of Cattolica as a target is €7.4/share. This represents 8.7% upside to the offer price.
Although the Board of Cattolica has not yet issued a reply, this situation may follow a script similar to <a href="https://www.smartkarma.com/insights/creval-credit-agricole-playing-hard-to-get" target="_blank" data-smartkarma-citation="insights:45742" rel="noopener">Creval - Crédit Agricole: Playing Hard to Get</a>, <a href="https://www.smartkarma.com/insights/creval-credit-agricole-grounds-for-an-improved-offer" target="_blank" data-smartkarma-citation="insights:50036" rel="noopener">CreVal - Crédit Agricole: Grounds for an Improved Offer</a> and <a href="https://www.smartkarma.com/insights/credit-agricole-creval-purchase-obligation" target="_blank" data-smartkarma-citation="insights:50658" rel="noopener">Credit Agricole/CreVal: Purchase Obligation</a>. Therefore, a sweetened offer is highly likely, in my view.
Recommendation is long CASS IM, TP €7.4.

On 31 May, Assicurazioni Generali (G IM) SpA launched a voluntary tender offer to acquire the 76.33 of Societa Cattolica Di Assicuraz (CASS IM) it does not already own.
Generali will offer €6.75/share, cum dividend.


A 15.3% premium to Cattolica's closing share price on 28 May 28, for an implied equity value of €1,541.3 mn and an implied EV of €2,437.3 mn. The offer represents 0.67x P/21e BV and 11.2x Fwd P/E. 


In case of total acceptance of the offer, at the current bid price, Generali will pay a consideration of €1.176 bn.


Minimum acceptance condition: 66.67% of the share capital, which could be lowered to 50% plus one share.


Synergies in operating costs, technical ratios and revenues, are estimated to reach a run-rate pre-tax of more than €80 mn p.a., with cost of synergies €150 mn - €200 mn.


Generali expects the transaction to finalize by mid-November 2021, subject to all necessary approvals and authorizations. There should not be any antitrust issues, as in any of the three main segments, combined market share would be around 20%.


On 31 May, shares of Cattolica closed at €6.97, a 15% increase vs. the prior trading session and 3.2% above the offer. Cattolica trades at 0.7x vs an 0.9x average of Italian insurers.
Fair value on a standalone basis is €6.64/share (average of comparables median implied Fwd P/E and discounted excess returns, WACC = 8.5%, g=1.8%, estimates from Capital IQ).
Synergies, taxed and capitalized, could be worth up to €1.28/share. Assuming that Cattolica's shareholders capture 60% of the PV of those synergies, TP of Cattolica as a target is €7.4/share. This represents 8.7% upside to the offer price.
Although the Board of Cattolica has not yet issued a reply, this situation may follow a script similar to Creval - Crédit Agricole: Playing Hard to Get, CreVal - Crédit Agricole: Grounds for an Improved Offer and Credit Agricole/CreVal: Purchase Obligation. Therefore, a sweetened offer is highly likely, in my view.
Recommendation is long CASS IM, TP €7.4.

Generali/Cattolica: Voluntary Tender Offer

Co-founder & Managing Director, Marketnomix 

Rajan Govil

Co-founder & Managing Director

Marketnomix 

Macroeconomics

The Seasonally adjusted unemployment rate in the Eurozone continued its downward trend, coming in at 10.2% in March 2016 compared to 10.4% in February and 11.2% in March 2015. The unemployment rate was at its lowest level since August 2011, and the gradual improvement in the labor market is expected to continue.The decline in the unemployment was largely across the board amongst the Eurozone members. It decreased to 10% in France in March 2016 compared to 10.2% in February while it fell to 4.2%…

The Seasonally adjusted unemployment rate in the Eurozone continued its downward trend, coming in at 10.2% in March 2016 compared to 10.4% in February and 11.2% in March 2015. The unemployment rate was at its lowest level since August 2011, and the gradual improvement in the labor market is expected to continue.The decline in the unemployment was largely across the board amongst the Eurozone members. It decreased to 10% in France in March 2016 compared to 10.2% in February while it fell to 4.2%…

Eurozone: Seasonally Adjusted Unemployment Rate Continues to Trend Downwards

Italy

Societa Cattolica di Assicurazioni - Societa Cooperativa offers life and non-life insurance in Italy. The Company offers its services through a network of agencies and affiliated banks.  Cattolica's services include life, automobile, health, fire, theft, accident, and property damage insurance and real estate management.

Societa Cattolica di Assicurazioni (CASS IM)

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Societa Cattolica di Assicurazioni (CASS IM)

Smartkarma Webinar | European Event-Driven: Top Ideas

On 16 June, 5pm SGT, join us and Jesus Rodriguez Aguilar to go over top ideas in European Event-Driven, including offers that target FTSE 250...

Smartkarma Research

Generali/Cattolica: Voluntary Tender Offer

Situation similar to bid for CreVal. Assuming that Cattolica's shareholders capture 60% of the PV of synergies, TP of Cattolica as a target is €7.4...

Jesus Rodriguez Aguilar

Eurozone: Seasonally Adjusted Unemployment Rate Continues to Trend Downwards

The Seasonally adjusted unemployment rate in the Eurozone continued its downward trend, coming in at 10.2% in March 2016 compared to 10.4% in...

Rajan Govil

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)