Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Event-Driven

<ul><li>
<a href="https://www.smartkarma.com/entities/christian-dior-se" target="_blank" data-smartkarma-citation="entities:21415:1" rel="noopener">Christian Dior SE (CDI FP)</a>’s 41.2% owned listed subsidiary, <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>, has outperformed Christian Dior shares by over 31% since LVMH made a non-binding proposal to acquire the US luxury jewellery and speciality retailer <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>.</li></ul><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/184/744/original/image_9822495321611673131890.png?1611673132" class="editor-image img-responsive" data-smartkarma-image-id="184744"></figure><ul>
<li>After a lawsuit and a counter lawsuit by Tiffany and LVMH respectively, (LVMH requested an amended deal due to COVID-19 led disruptions) LVMH finally managed to complete the acquisition on 7th January for $15.8bn, a 3% discount to LVMH’s original offer.</li>
<li>Dior is 97.4% owned by the Arnault Family and therefore has a very low free float compared to LVMH’s 50% free float. The lack of liquidity meant that Dior failed to keep up with LVMH’s share price movement, even though Dior’s only source of revenue/income is LVMH.</li>
<li>Dior’s current NAV discount is 23.9%, compared to an average of 4.0% during 2018-3Q2019. As the trading volume of LVMH normalises following the Tiffany transaction, we expect Dior’s NAV discount to return to the undisturbed long-term average discount range of 10-18%.</li>
</ul>


Christian Dior SE (CDI FP)’s 41.2% owned listed subsidiary, Lvmh Moet Hennessy Louis Vuitton (MC FP), has outperformed Christian Dior shares by over 31% since LVMH made a non-binding proposal to acquire the US luxury jewellery and speciality retailer Tiffany &amp; Co (TIF US).
After a lawsuit and a counter lawsuit by Tiffany and LVMH respectively, (LVMH requested an amended deal due to COVID-19 led disruptions) LVMH finally managed to complete the acquisition on 7th January for $15.8bn, a 3% discount to LVMH’s original offer.
Dior is 97.4% owned by the Arnault Family and therefore has a very low free float compared to LVMH’s 50% free float. The lack of liquidity meant that Dior failed to keep up with LVMH’s share price movement, even though Dior’s only source of revenue/income is LVMH.
Dior’s current NAV discount is 23.9%, compared to an average of 4.0% during 2018-3Q2019. As the trading volume of LVMH normalises following the Tiffany transaction, we expect Dior’s NAV discount to return to the undisturbed long-term average discount range of 10-18%.


Christian Dior: Holdco Discount Could Normalise Following the Completion of Tiffany Acquisition

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

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

United States

Tiffany & Co. operates jewelry stores and manufactures products through its subsidiary corporations.   The Company operates retail stores in the Americas, Asia-Pacific, Japan, Europe and the United Arab Emirates, and also engages in direct selling through Internet, catalog and business gift operations.

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Tiffany & Co (TIF US)

Christian Dior: Holdco Discount Could Normalise Following the Completion of Tiffany Acquisition

Dior’s current NAV discount is 23.9%, compared to an undisturbed long-term average discount range of 10-18%. As trading volumes of LVMH normalises...

Oshadhi Kumarasiri

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

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