European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>GIP/Brookfield/ACS weigh launching a €15 billion unsolicited offer for Atlantia. Blackstone may partner with the Benettons to acquire Atlantia at €24/share (26% premium ). Italian Government's role will be key.</li>
<li>Atlantia trades at higher multiples than ACS (EV/22e EBITDA: 12.8x vs 3.2x, Capital IQ consensus). A hypothetical ACS/Abertis would become a world leader in infrastructure, but leverage is key. </li>
<li>The opposition of Edizione makes the operation difficult/more expensive. A joint-bid Edizione/Blackstone, would force the GIP-led group to present an improved offer. Nearly 50% of Atlantia's NAV is cash.</li>
</ul>


GIP/Brookfield/ACS weigh launching a €15 billion unsolicited offer for Atlantia. Blackstone may partner with the Benettons to acquire Atlantia at €24/share (26% premium ). Italian Government's role will be key.
Atlantia trades at higher multiples than ACS (EV/22e EBITDA: 12.8x vs 3.2x, Capital IQ consensus). A hypothetical ACS/Abertis would become a world leader in infrastructure, but leverage is key. 
The opposition of Edizione makes the operation difficult/more expensive. A joint-bid Edizione/Blackstone, would force the GIP-led group to present an improved offer. Nearly 50% of Atlantia's NAV is cash.


<ul>
<li>Hochtief offers A$22/share in cash, a 33% premium to the closing share price on the prior day, and the offer is final. The offer is a relatively low amount.</li>
<li>The deal should complete. The <strong>premium is generous</strong>, as the 15.4x P/22e E paid is high given that Hochtief and ACS are trading at 9.9x and 11.3x, respectively.</li>
<li>ACS trades at 27% discount to NAV. Holding structure rationalization and c. €5 billion received should be a catalyst for discount tightening. <strong>Long 1 ACS SM/short 0.4162 HOT GR</strong>.</li>
</ul>


Hochtief offers A$22/share in cash, a 33% premium to the closing share price on the prior day, and the offer is final. The offer is a relatively low amount.
The deal should complete. The premium is generous, as the 15.4x P/22e E paid is high given that Hochtief and ACS are trading at 9.9x and 11.3x, respectively.
ACS trades at 27% discount to NAV. Holding structure rationalization and c. €5 billion received should be a catalyst for discount tightening. Long 1 ACS SM/short 0.4162 HOT GR.


ACS/Hochtief/CIMIC: Rationalization of Holding Structure

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

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.

Equity Capital Markets

Hyundai Engineering   / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hyundai-engineering-co-ltd" target="_blank" data-smartkarma-citation="entities:33008:1" rel="noopener">Hyundai Engineering Co Ltd (HEC KS)</a> has launched its IPO to raise US$0.8-1.0 billion at the price range of KRW57,900-75,700 per share.</li>
<li>In <a href="https://www.smartkarma.com/insights/hyundai-engineering-ipo-initiation-building-on-good-foundations" target="_blank" data-smartkarma-citation="insights:63360" rel="noopener">Hyundai Engineering IPO Initiation: Building on Good Foundations</a>, we stated that HEC has attractive fundamentals with a strong backlog, healthy book-to-bill, improving 3Q21 revenue growth and improving margins. </li>
<li>In this note, we look at the syndicate's valuation methodology and present our valuation methodology. Our valuation analysis suggests that the IPO price range is unattractive. </li>
</ul>



Hyundai Engineering Co Ltd (HEC KS) has launched its IPO to raise US$0.8-1.0 billion at the price range of KRW57,900-75,700 per share.
In Hyundai Engineering IPO Initiation: Building on Good Foundations, we stated that HEC has attractive fundamentals with a strong backlog, healthy book-to-bill, improving 3Q21 revenue growth and improving margins. 
In this note, we look at the syndicate's valuation methodology and present our valuation methodology. Our valuation analysis suggests that the IPO price range is unattractive. 


Hyundai Engineering IPO: Valuation Insights

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hyundai-engineering-co-ltd" target="_blank" data-smartkarma-citation="entities:33008:1" rel="noopener">Hyundai Engineering Co Ltd (HEC KS)</a>/HEC is a leading global EPC (Engineering, Procurement and Construction) contractor. It is seeking to raise up to $1 billion.  </li>
<li>HEC is offering 16.0 million shares with a primary/secondary split of 25/75 at an indicative price range of KRW57,900-66,800 per share.</li>
<li>HEG has attractive fundamentals with a strong backlog, healthy book-to-bill, improving 3Q21 revenue growth and improving margins. </li>
</ul>



Hyundai Engineering Co Ltd (HEC KS)/HEC is a leading global EPC (Engineering, Procurement and Construction) contractor. It is seeking to raise up to $1 billion.  
HEC is offering 16.0 million shares with a primary/secondary split of 25/75 at an indicative price range of KRW57,900-66,800 per share.
HEG has attractive fundamentals with a strong backlog, healthy book-to-bill, improving 3Q21 revenue growth and improving margins. 


Hyundai Engineering IPO Initiation: Building on Good Foundations

Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

<ul>
<li>The success of this IPO depends on whether Hyundai Engineering can present a growth story that can justify a valuation premium of up to twice that of the local peers.</li>
<li>Of course, Hyundai Engineering is indeed in an advantageous position compared to the local competitors because it can present synergies with Hyundai Motor Group affiliates.</li>
<li>However, it depends on how specific a picture of financial growth is presented, which will be a significant challenge for Hyundai Engineering as well.</li>
</ul>


The success of this IPO depends on whether Hyundai Engineering can present a growth story that can justify a valuation premium of up to twice that of the local peers.
Of course, Hyundai Engineering is indeed in an advantageous position compared to the local competitors because it can present synergies with Hyundai Motor Group affiliates.
However, it depends on how specific a picture of financial growth is presented, which will be a significant challenge for Hyundai Engineering as well.


Hyundai Engineering IPO: Offering Details, Valuation Issues, & Index Fast Entry

France

VINCI SA is a global player in concessions and construction with expertise in building, civil, hydraulic, and electrical engineering. The Company offers construction-related specialities and road materials production, as well as finance, management, operations and maintenance of public infrastructure such as motorways, airports, and road and rail infrastructures.

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Vinci SA (DG FP)

Atlantia in Play?

The GIP/Brookfield/ACS deal seems a priori difficult, due to the size of Atlantia (for ACS) but above all because of the possibility that the...

Jesus Rodriguez Aguilar

ACS/Hochtief/CIMIC: Rationalization of Holding Structure

The offer is well timed, as CIMIC shares had been trading at seven-year lows prior to the offer. Gross spread is nearly inexistent, but worth...

Jesus Rodriguez Aguilar

Hyundai Engineering IPO: Valuation Insights

HEC has launched its IPO to raise US$0.8-1.0 bn. Our valuation analysis suggests that HEC is fairly valued at the low end of the IPO price range....

Arun George

Hyundai Engineering IPO Initiation: Building on Good Foundations

HEC is seeking to raise up to $1 billion. HEG has attractive fundamentals with a strong backlog, healthy book-to-bill, improving 3Q21 revenue...

Arun George

Hyundai Engineering IPO: Offering Details, Valuation Issues, & Index Fast Entry

Hyundai Engineering, another big fish in Korea's local IPO market, put out its listing prospectus. The company offers 16M shares, representing...

Sanghyun Park

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