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.

CSC/Intertrust NV: Conditional Offer Agreement

Event-Driven

On 4 May, Cinven Limited made a proposal (the third one) to acquire <a href="https://www.smartkarma.com/entities/sanne-group-plc" target="_blank" data-smartkarma-citation="entities:22155:1" rel="noopener">Sanne Group PLC (SNN LN)</a> for £1.3 billion, or 830p/share. In addition, eligible Sanne shareholders would also retain the right to receive the final dividend of 9.9p per share declared on 19 March 2021. Cinven cancelled the acquisition on 12 May 12, 2021. The proposal was unanimously rejected by the Board of Sanne on 12 May. The offer represented an implied equity value of £1,346 mn for 100% of the shares, 30.1x Fwd P/E and 4.8x P/Fwd BV.
On 29 May, Sanne said its Board had received and unanimously rejected a fourth unsolicited, nonbinding offer from Cinven for 850p.
Put-up or shut-up: Cinven has until 11 June to announce a firm intention to make an offer for Sanne or to announce that it does not intend to do so.
Sanne is trading at 20.6x EV/Fwd EBITDA, 4.5x P/Fwd BV and 16.7x P/Fwd CFPS.
Capital IQ consensus median TP is 750p and the shares offer a 1.9% dividend yield.
I use a DCF to value the firm (Capital IQ consensus estimates, WACC 5.8%, g 1.5% tax rate of 20%). My estimate of fair value is 915p, a c. 19% upside to the last closing price.
I believe that the Board's rejection is justified, given the quality of Sanne's business, time needed to digest the latest acquisitions and standalone prospects.
Recommendation is long Sanne, TP 915p. Upside risk may come from a knock-out offer from Cinven.

On 4 May, Cinven Limited made a proposal (the third one) to acquire Sanne Group PLC (SNN LN) for £1.3 billion, or 830p/share. In addition, eligible Sanne shareholders would also retain the right to receive the final dividend of 9.9p per share declared on 19 March 2021. Cinven cancelled the acquisition on 12 May 12, 2021. The proposal was unanimously rejected by the Board of Sanne on 12 May. The offer represented an implied equity value of £1,346 mn for 100% of the shares, 30.1x Fwd P/E and 4.8x P/Fwd BV.
On 29 May, Sanne said its Board had received and unanimously rejected a fourth unsolicited, nonbinding offer from Cinven for 850p.
Put-up or shut-up: Cinven has until 11 June to announce a firm intention to make an offer for Sanne or to announce that it does not intend to do so.
Sanne is trading at 20.6x EV/Fwd EBITDA, 4.5x P/Fwd BV and 16.7x P/Fwd CFPS.
Capital IQ consensus median TP is 750p and the shares offer a 1.9% dividend yield.
I use a DCF to value the firm (Capital IQ consensus estimates, WACC 5.8%, g 1.5% tax rate of 20%). My estimate of fair value is 915p, a c. 19% upside to the last closing price.
I believe that the Board's rejection is justified, given the quality of Sanne's business, time needed to digest the latest acquisitions and standalone prospects.
Recommendation is long Sanne, TP 915p. Upside risk may come from a knock-out offer from Cinven.

Sanne Group PLC

Cinven/Sanne: PUSU Deadline Is Tomorrow