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.

Liquid Universe of European Ordinary and Preferred Shares: December Report

Liquid Universe of European Ordinary and Preferred Shares: January Report

Event-Driven

On 19 November, the shareholders' meetings approved the mandatory conversion of savings shares into ordinary shares as well as the distribution of the extraordinary dividend.
<ul>
<li>The mandatory conversion of savings shares into ordinary shares, on the basis of a conversion ratio equal to 0.67 ordinary shares for each savings share.</li>
<li>As an incentive, subject to the carrying out of the conversion, the distribution of an extraordinary dividend of €0.75 for each existing and newly issued ordinary share.</li>
</ul>
The rationale for the conversion is:
<ul class="">
<li>Simplifying the capital structure of Buzzi and reducing corporate obligations and costs.</li>
<li>Untangling the governance, increasing the total free float of the ordinary shares, thus allowing even greater liquidity.</li>
<li>Jumping on a trend towards simplification of the share structure of Italian listed companies, where some companies have converted their savings shares into ordinary shares.</li>
</ul>
The difference advantage of the savings shares is not a large amount, just €976,800.
Since announcement of the conversion ratio, the spread has moved between 2.5% and 0.45%.
<ul>
<li>The current spread is 0.84%.</li>
<li>There is not definitive date for the conversion, but the market believes it will happen very soon.</li>
</ul>
Recommendation is to monitor the spread to set up the trade long savings shares / short ordinary shares if and when the spread widens.
Since the conversion announcement, the average daily liquidity of the savings shares has been 484k. There were very large volumes traded on 12 October (3.4 mn and 2.5 mn respectively) and 6 November.

On 19 November, the shareholders' meetings approved the mandatory conversion of savings shares into ordinary shares as well as the distribution of the extraordinary dividend.

The mandatory conversion of savings shares into ordinary shares, on the basis of a conversion ratio equal to 0.67 ordinary shares for each savings share.
As an incentive, subject to the carrying out of the conversion, the distribution of an extraordinary dividend of €0.75 for each existing and newly issued ordinary share.

The rationale for the conversion is:

Simplifying the capital structure of Buzzi and reducing corporate obligations and costs.
Untangling the governance, increasing the total free float of the ordinary shares, thus allowing even greater liquidity.
Jumping on a trend towards simplification of the share structure of Italian listed companies, where some companies have converted their savings shares into ordinary shares.

The difference advantage of the savings shares is not a large amount, just €976,800.
Since announcement of the conversion ratio, the spread has moved between 2.5% and 0.45%.

The current spread is 0.84%.
There is not definitive date for the conversion, but the market believes it will happen very soon.

Recommendation is to monitor the spread to set up the trade long savings shares / short ordinary shares if and when the spread widens.
Since the conversion announcement, the average daily liquidity of the savings shares has been 484k. There were very large volumes traded on 12 October (3.4 mn and 2.5 mn respectively) and 6 November.

Buzzi Unicem

Buzzi Unicem's Savings Shares Conversion