Silver Point

Thomas J. Monaco

Independent Insight Provider

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

Equity Bottom-Up

*Major US Merchant Deal: Tencent Holding’s (700.HK) [Tencent] Afterpay Touch's (APT.AU) [Afterpay] recently announced an integrated, multi-year national partnership with Unibail-Rodamco-Westfield (URW.AU), the owner of <a href="https://www.westfield.com/" target="_blank" rel="noopener">Westfield</a> shopping centers in the US, to support retailers by offering its Buy Now, Pay Later (BNPL) to consumers as they return to shopping malls; and*Tencent’s Midas Touch: Tencent continues to hit it out of the park with its Afterpay stake. In addition to its superb return on investment over the past ten months since the stake announcement - -even after giving back some of its gains, this alliance with Australia’s premier financial technology BNPL company is paying dividends to Tencent in numerous other ways.

*Major US Merchant Deal: Tencent Holding’s (700.HK) [Tencent] Afterpay Touch's (APT.AU) [Afterpay] recently announced an integrated, multi-year national partnership with Unibail-Rodamco-Westfield (URW.AU), the owner of Westfield shopping centers in the US, to support retailers by offering its Buy Now, Pay Later (BNPL) to consumers as they return to shopping malls; and*Tencent’s Midas Touch: Tencent continues to hit it out of the park with its Afterpay stake. In addition to its superb return on investment over the past ten months since the stake announcement - -even after giving back some of its gains, this alliance with Australia’s premier financial technology BNPL company is paying dividends to Tencent in numerous other ways. 

Tencent Holdings – Celebrating The Return Of Retail

European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<a href="https://www.smartkarma.com/entities/unibail-rodamco-westfield-30ce548a-619c-4f94-9cdc-69d80f811709" target="_blank" data-smartkarma-citation="entities:27912:1" rel="noopener">Unibail-Rodamco-Westfield (URW NA)</a> has <a href="https://cdn.urw.com/-/media/Corporate~o~Sites/Unibail-Rodamco-Corporate/Files/Homepage/INVESTORS/Press-Releases/Others/2020/20200916-URW-announces-9Bn-RESET-plan.ashx?revision=" target="_blank" rel="noopener">announced a plan</a> to restore financial health, which involves €4.0 Bn of disposals and a massively dilutive €3.5 Bn fully underwritten rights issue to be conducted before year-end.
<ul>
<li>the rights issue is equivalent to c. 83% of the current market cap (it was two-thirds of the market cap pre-announcement)</li>
</ul>
URW is exposed to a highly cyclical and structurally declining retail sector. Moreover, the not-so-new URW's leverage woes have been compounded by the Covid-19 pandemic and fear of rebounds, which has indeed brought along a lower demand from public, affected the ability of tenants to pay rent and accelerated the penetration of eCommerce.
Although URW's portfolio has some of the best European shopping centres, the company has been forced to shed some high quality assets in Europe to reduce leverage. This may weaken future income.
As a result of the current economic downturn, URW has found itself in the wrong place of real estate: retail is lagging other sectors such as industrial, logistics or residential, with implications for index compositions. On a comps basis, URW seems overvalued (18.3x EV/Forward EBITDA vs. 15.5x for comparable companies).
<div>
The rights issue will be massively dilutive, which explains the share price weakness. Institutional holders will subscribe for the new shares, which is the only way they can recover some of the money, and probably not all retail shareholders (up to 49% of shareholders according to Capital IQ) will subscribe the cash call. The size of the issue makes it akin to an IPO, a massive wave of shares coming onto market; hedge funds are positioning for it (please see table further in the insight).
</div>
I recommend a straight short in URW.
Depending on the sources, between 15% and 20.3% of URW's shares are on loan, with up to 16 days to cover.

Unibail-Rodamco-Westfield (URW NA) has announced a plan to restore financial health, which involves €4.0 Bn of disposals and a massively dilutive €3.5 Bn fully underwritten rights issue to be conducted before year-end.

the rights issue is equivalent to c. 83% of the current market cap (it was two-thirds of the market cap pre-announcement)

URW is exposed to a highly cyclical and structurally declining retail sector. Moreover, the not-so-new URW's leverage woes have been compounded by the Covid-19 pandemic and fear of rebounds, which has indeed brought along a lower demand from public, affected the ability of tenants to pay rent and accelerated the penetration of eCommerce.
Although URW's portfolio has some of the best European shopping centres, the company has been forced to shed some high quality assets in Europe to reduce leverage. This may weaken future income.
As a result of the current economic downturn, URW has found itself in the wrong place of real estate: retail is lagging other sectors such as industrial, logistics or residential, with implications for index compositions. On a comps basis, URW seems overvalued (18.3x EV/Forward EBITDA vs. 15.5x for comparable companies).

The rights issue will be massively dilutive, which explains the share price weakness. Institutional holders will subscribe for the new shares, which is the only way they can recover some of the money, and probably not all retail shareholders (up to 49% of shareholders according to Capital IQ) will subscribe the cash call. The size of the issue makes it akin to an IPO, a massive wave of shares coming onto market; hedge funds are positioning for it (please see table further in the insight).

I recommend a straight short in URW.
Depending on the sources, between 15% and 20.3% of URW's shares are on loan, with up to 16 days to cover.

Unibail-Rodamco-Westfield Looming Rights Issue

France

Unibail-Rodamco-Westfield operates as a real estate investment trust. The Company leases and rents building space, finances real estate investments, and renovates real estates for sale. Unibail-Rodamco-Westfield's properties are shopping centers, office buildings, and convention-exhibition centers.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Unibail-Rodamco-Westfield (URW NA)

Tencent Holdings – Celebrating The Return Of Retail

TENCENT HOLDINGS: Tencent's Afterpay recently announced an integrated, multi-year national partnership with Westfield shopping centers in the US,...

Thomas J. Monaco

Unibail-Rodamco-Westfield Looming Rights Issue

Unibail-Rodamco-Westfield (URW NA) XXXXX XXXXX

Jesus Rodriguez Aguilar

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)