European Event-Driven Analyst

Jesus Rodriguez Aguilar

Jesús is an Insight Provider (Event-driven) on the Smartkarma network, where he looks across sectors at opportunities arising from securities mispricing (both credit and equity), share classes, bid announcements, prospective bids, and special situations. He has served as Economic and Business Advisor at the Spanish Congress in Madrid. Prior to that, he has worked in the City of London: as a Credit Analyst at Bloomberg; Event-driven associate at former boutique European Research; and doubled as Special Situations and Equity-linked VP (convertible bonds) at Merrill Lynch. Jesús has an MBA from the London Business School, a BA (Hons.) degree in Economics from the Complutense University in Madrid, and a BA (Hons.) in Law from U.N.E.D., also in Madrid.

Asterion/Retelit: Sweetened Offer Means Transaction Will Go Ahead

Altice - Next Private: Trading Above Terms

Altice - Next Private Takeover Announcement

Altice Expected to Announce Tower Deal by End of Summer

Event-Driven

On 31 May, Marbles S.r.l., a company owned by Asterion, launched a tender offer to acquire the remaining shares in <a href="https://www.smartkarma.com/entities/retelit-spa" target="_blank" rel="noopener">Retelit SpA (LIT IM)</a> it does not already own for approximately €333.5 mn. As per terms of transaction, Marbles S.r.l will acquire 117.041550 mn shares at €6.85/share.
<div>
The remaining 28.7% stake in Retelit is hold by Fiber 4.0, a wholly owned subsidiary of Marbles S.r.l. Spa. The offer aims to acquire 100% of the share capital of Retelit and delist the company. There is minimum acceptance condition of at least 66.67%.
Several institutions are willing to subscribe for Marbles shares directly. These are the municipal pension managers of Michigan (United States) and Halifax (Canada), together with the Hamilton Lane Infrastructure Fund.
Upon announcement, shares of Retelit rose about 15% to €2.96, above the offer price. On the following days, shares have reached €3.02. The market expects an increase in the offer price.
The launch of the bid came came just ten days after Asterion Industrial Partners obtained AGM approval to directly designate three Board members representatives and propose three new independent ones. Additionally, Asterion supported that both the President and the CEO keep their positions.
Retelit closed on 3 June 4.9% above the offer price (with a decent trading volume over the last four sessions).
Regarding standalone valuation, my TP comes from:
<ul style="list-style-type: disc;">
<li>Multiple of past transactions: 10.5x EV/EBITDA, valuation is €2.95/share</li>
<li>Comparables: valuation is €3.07/share (blended average of median implied 10.96x EV/Fwd EBITDA and median implied 22.5x Fwd P/E).</li>
<li>On a DCF (using estimates from Capital IQ consensus, WACC 7.5% and 8x terminal EBITDA multiple), valuation is €3.1/share </li>
</ul>
By taking the average, my fair value is €3.04/share, 1.6% upside to the last closing price of €2.99 and 6.6% above the offer price.
Positive revision of the offer price is likely, in my view, as it happened in the case of Altice Europe ( <a href="https://www.smartkarma.com/insights/altice-next-private-takeover-announcement" target="_blank" rel="noopener">Altice - Next Private Takeover Announcement</a> and <a href="https://www.smartkarma.com/insights/altice-next-private-trading-above-terms" target="_blank" rel="noopener">Altice - Next Private: Trading Above Terms</a> ). I would rule out a major increase from the current offer price.

</div>

On 31 May, Marbles S.r.l., a company owned by Asterion, launched a tender offer to acquire the remaining shares in Retelit SpA (LIT IM) it does not already own for approximately €333.5 mn. As per terms of transaction, Marbles S.r.l will acquire 117.041550 mn shares at €6.85/share.

The remaining 28.7% stake in Retelit is hold by Fiber 4.0, a wholly owned subsidiary of Marbles S.r.l. Spa. The offer aims to acquire 100% of the share capital of Retelit and delist the company. There is minimum acceptance condition of at least 66.67%.
Several institutions are willing to subscribe for Marbles shares directly. These are the municipal pension managers of Michigan (United States) and Halifax (Canada), together with the Hamilton Lane Infrastructure Fund.
Upon announcement, shares of Retelit rose about 15% to €2.96, above the offer price. On the following days, shares have reached €3.02. The market expects an increase in the offer price.
The launch of the bid came came just ten days after Asterion Industrial Partners obtained AGM approval to directly designate three Board members representatives and propose three new independent ones. Additionally, Asterion supported that both the President and the CEO keep their positions.
Retelit closed on 3 June 4.9% above the offer price (with a decent trading volume over the last four sessions).
Regarding standalone valuation, my TP comes from:

Multiple of past transactions: 10.5x EV/EBITDA, valuation is €2.95/share
Comparables: valuation is €3.07/share (blended average of median implied 10.96x EV/Fwd EBITDA and median implied 22.5x Fwd P/E).
On a DCF (using estimates from Capital IQ consensus, WACC 7.5% and 8x terminal EBITDA multiple), valuation is €3.1/share 

By taking the average, my fair value is €3.04/share, 1.6% upside to the last closing price of €2.99 and 6.6% above the offer price.
Positive revision of the offer price is likely, in my view, as it happened in the case of Altice Europe ( Altice - Next Private Takeover Announcement and Altice - Next Private: Trading Above Terms ). I would rule out a major increase from the current offer price.



Asterion/Retelit: Voluntary Offer, Sweetening Expected