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.

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Event-Driven

<a href="https://www.smartkarma.com/entities/atlantia-spa" target="_blank" data-smartkarma-citation="entities:21157:1" rel="noopener">Atlantia SpA (ATL IM)</a><a href="https://www.atlantia.it/en/press-release/-/bulletin/view/699a3ebd-81fe-4d51-b275-ded5ffb8613f" target="_blank" rel="noopener">announced</a> on 17 October that it has agreed to sell a 49% stake in Telepass to global private markets investment manager Partners Group, on behalf of its clients.
Blackstone and Macquarie want Atlantia's toll roads in Italy. The funds would join the public bank CDP to acquire 88% of the toll road subsidiary (ASPI). Atlantia shot up 9% on 13 October in the stock market due to the possible agreement that will put an end to a long litigation.
Atlantia has <a href="https://www.atlantia.it/documents/20184/87656/2020-09-24_ASPI_Dual_track.pdf/6ce235e4-bfbd-4959-86bc-daa4d0d8aa81" target="_blank" rel="noopener">released a presentation</a> about the disposal plan for Autostrade per L'Italia (ASPI).
My SOTP valuation shows a NAV per share of €19.10, vs. the last close of €14.61. This means that the implied market valuation for ASPI is low and there is upside on Atlantia.
The value of the other assets ex-ASPI is known and higher than the amount of debt at the holding level. Atlantia receives dividends from them and they could attract interest from other trade buyers or infrastructure funds (ACS is selling its industrial services division and I would not rule out that it could try to buy Atlantia's stake in Abertis, where ACS has 50% minus 1 share, or increase its stake in Hochtief, which it sold to Atlantia during the Abertis JV deal).
On the minus side, there is uncertainty related to both the impact of the Covid pandemic and the collapse of the Genoa Bridge.
So uncertainties are becoming less so, and on the basis of my calculations, I believe there is upside in Atlantia, if and when the regulatory and event related uncertainties become clearer. In spite of leverage, Atlantia's assets are worth more than the debt at holding level. Therefore I recommend LONG Atlantia, target price €19.1.

Atlantia SpA (ATL IM)announced on 17 October that it has agreed to sell a 49% stake in Telepass to global private markets investment manager Partners Group, on behalf of its clients.
Blackstone and Macquarie want Atlantia's toll roads in Italy. The funds would join the public bank CDP to acquire 88% of the toll road subsidiary (ASPI). Atlantia shot up 9% on 13 October in the stock market due to the possible agreement that will put an end to a long litigation.
Atlantia has released a presentation about the disposal plan for Autostrade per L'Italia (ASPI).
My SOTP valuation shows a NAV per share of €19.10, vs. the last close of €14.61. This means that the implied market valuation for ASPI is low and there is upside on Atlantia.
The value of the other assets ex-ASPI is known and higher than the amount of debt at the holding level. Atlantia receives dividends from them and they could attract interest from other trade buyers or infrastructure funds (ACS is selling its industrial services division and I would not rule out that it could try to buy Atlantia's stake in Abertis, where ACS has 50% minus 1 share, or increase its stake in Hochtief, which it sold to Atlantia during the Abertis JV deal).
On the minus side, there is uncertainty related to both the impact of the Covid pandemic and the collapse of the Genoa Bridge.
So uncertainties are becoming less so, and on the basis of my calculations, I believe there is upside in Atlantia, if and when the regulatory and event related uncertainties become clearer. In spite of leverage, Atlantia's assets are worth more than the debt at holding level. Therefore I recommend LONG Atlantia, target price €19.1.

Atlantia SpA

Atlantia, Light at the End of the Tunnel