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.

EQT/​Dechra Pharmaceuticals: Recommended Offer

Event-Driven

On 7 October, Hellman &amp; Friedman (H&amp;F) matched EQT’s €470/share offer for <a href="https://www.smartkarma.com/entities/zooplus-ag" target="_blank" data-smartkarma-citation="entities:21749:1" rel="noopener">zooplus AG (ZO1 GR)</a>, for an implied equity value of c. €3,360 mn. H&amp;F recovers the leading position, as it already counted with the support of the Board of zooplus AG, as well as irrevocable undertakings for c. 17% of zooplus AG’ share capital. Those supports include the Management Board Members and Maxburg Beteiligungen GmbH &amp; Co. KG, a longstanding key investor in zooplus AG who is also represented on its Supervisory Board. Those commitments remain therefore binding. The acceptance period for H&amp;F's offer will therefore be extended to 3 November.
The counteroffer represents 1.45x EV/Fwd Revenue, 39x EV/Fwd EBITDA and 116.3x Fwd P/E. EQT will therefore probably have to better its bid to reach its minimum acceptance condition (50% plus one share). The market certainly expects an increased offer, as the shares closed at €483.2 on 8 October, c. 2.8% above the current bid; Capital IQ consensus 2022e CF yield is 2.4%.
zooplus AG is trading at 1.5x EV/Fwd Sales vs. 1.3x for comparables (median of e-commerce companies). I do not discard a further offer by EQT, but if that happened, it would be a small price increase. Although the private equity battle over zooplus AG is not over yet, the risk reward is looking unfavourable, in my view.

On 7 October, Hellman &amp; Friedman (H&amp;F) matched EQT’s €470/share offer for zooplus AG (ZO1 GR), for an implied equity value of c. €3,360 mn. H&amp;F recovers the leading position, as it already counted with the support of the Board of zooplus AG, as well as irrevocable undertakings for c. 17% of zooplus AG’ share capital. Those supports include the Management Board Members and Maxburg Beteiligungen GmbH &amp; Co. KG, a longstanding key investor in zooplus AG who is also represented on its Supervisory Board. Those commitments remain therefore binding. The acceptance period for H&amp;F's offer will therefore be extended to 3 November.
The counteroffer represents 1.45x EV/Fwd Revenue, 39x EV/Fwd EBITDA and 116.3x Fwd P/E. EQT will therefore probably have to better its bid to reach its minimum acceptance condition (50% plus one share). The market certainly expects an increased offer, as the shares closed at €483.2 on 8 October, c. 2.8% above the current bid; Capital IQ consensus 2022e CF yield is 2.4%.
zooplus AG is trading at 1.5x EV/Fwd Sales vs. 1.3x for comparables (median of e-commerce companies). I do not discard a further offer by EQT, but if that happened, it would be a small price increase. Although the private equity battle over zooplus AG is not over yet, the risk reward is looking unfavourable, in my view.

Hellman & Friedman Matches EQT in Contest for Zooplus AG