Financials & FinTech research, Galliano’s Financials Research

Victor Galliano

Victor Galliano is an experienced equity banks analyst, having covered Latin America banks and non-bank financials for over 12 years, as well as more recently covering the Italian banks. He has worked in sell side equity research for 30 years in a career spanning Barclays, HSBC, BBVA LatInvest, Barings and NatWest.
Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.
The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

Financials & FinTech research

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Financials & FinTech, EM & Developed Markets

Galliano’s Financials Research

Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.

The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. 

Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/cme-group-inc" target="_blank" data-smartkarma-citation="entities:12353:1" rel="noopener">Cme Group Inc (CME US)</a> has approached <a href="https://www.smartkarma.com/entities/cboe-global-markets-inc" target="_blank" data-smartkarma-citation="entities:20189:1" rel="noopener">Cboe Global Markets (CBOE US)</a> with a view to making an all paper acquisition, according to the FT</li>
<li>If confirmed, a CME-CBOE tie up would, in our view, indicate that CME management’s rationale would be to “bulk up” on data revenues; also, the tie-up would benefit from the enlarged scale of two derivative exchanges, with broadly complimentary product offerings</li>
<li>Furthermore, we would expect longer term synergy benefits from reduced opex and capex</li>
<li>The reported CBOE acquisition price tag of USD16bn is a 20% premium to its current market value, which implies a take-out 2022E consensus PE multiple of 26x, which is at a slight discount to CME itself (26.9x)</li>
<li>We believe that the spotlight is now on CBOE, and its very attractive business mix with its premium EBITDA margin; we believe that the merger would be positive CBOE shareholders, and broadly neutral for CME shareholders</li>
<li>Risks to our positive view on CBOE based on a potential CME-CBOE merger include regulatory and anti-trust opposition to the merger, on the basis of monopolistic concerns; another key risk in the event of a merger, would be the failure to extract the expected cost savings and synergies outlined by management</li>
</ul>



Cme Group Inc (CME US) has approached Cboe Global Markets (CBOE US) with a view to making an all paper acquisition, according to the FT
If confirmed, a CME-CBOE tie up would, in our view, indicate that CME management’s rationale would be to “bulk up” on data revenues; also, the tie-up would benefit from the enlarged scale of two derivative exchanges, with broadly complimentary product offerings
Furthermore, we would expect longer term synergy benefits from reduced opex and capex
The reported CBOE acquisition price tag of USD16bn is a 20% premium to its current market value, which implies a take-out 2022E consensus PE multiple of 26x, which is at a slight discount to CME itself (26.9x)
We believe that the spotlight is now on CBOE, and its very attractive business mix with its premium EBITDA margin; we believe that the merger would be positive CBOE shareholders, and broadly neutral for CME shareholders
Risks to our positive view on CBOE based on a potential CME-CBOE merger include regulatory and anti-trust opposition to the merger, on the basis of monopolistic concerns; another key risk in the event of a merger, would be the failure to extract the expected cost savings and synergies outlined by management


Cboe Global Markets

CME & CBOE: Merger Musings