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.

IFM/Naturgy: Board Opinion And Bid Scenarios

IFM/Naturgy: Tender Results & Ibex-35 Index Implications

Naturgy - IFM: Consideration Adjustment, New TP, Attractive Spread

Event-Driven

<a href="https://www.smartkarma.com/entities/naturgy-energy-group-sa" target="_blank" data-smartkarma-citation="entities:21271:1" rel="noopener">Naturgy Energy Group SA (NTGY SM)</a> is awaiting the decision made by the Government on the partial takeover launched by the Australian fund IFM for 22.7% of the capital. Meanwhile, Naturgy has published <a href="https://www.naturgy.com/files/Naturgy_1H21_results_presentation.pdf" target="_blank" rel="noopener">H1 2021 results</a> and launched a new strategic plan (€14 bn in Capex and a €5.9 bn dividend payout) without awaiting the outcome of IFM's takeover. According to Francisco Reynés, president of the company, Naturgy is going to focus on "organic" growth.
Naturgy has approved the payment of a first 2021 interim dividend of €0.3/share (payable on August 4), the new offer price will be €22.07/share.
The success of IFM's partial takeover attempt is becoming increasingly difficult due to:
<ul>
<li>
Delay in the approval of the takeover by the Spanish Government.
</li>
<li>
Economic outlook improvement, and sharp rise in commodities since takeover announcement on 26 January.
</li>
<li>
Criteria Caixa's intentions to strengthen its shareholding in Naturgy.
</li>
<li>
New strategic plan and alliance with Sonatrach.
</li>
</ul>
According to the last communication to the CNMV, CriteriaCaixa already holds a 25.997% stake in Naturgy. Assuming it will still purchase up to 29.9%, that is a 3.903% stake pending, some 37.84 mn shares, i.e. approximately €826 mn (at the closing price of 29 July) almost worth the volume of 50 trading sessions (at the last three months average daily volume). Therefore, the shares should be sustained for a while just on Criteria's purchases.
At the closing price of 29 July, the gross spread to the new adjusted takeover price is c. 1.1% and to Capital IQ median consensus TP is 2.7%. The shares are highly likely to increase over the adjusted offer price on account of Criteria's purchases. From an event-driven perspective, I recommend selling into strength.

Naturgy Energy Group SA (NTGY SM) is awaiting the decision made by the Government on the partial takeover launched by the Australian fund IFM for 22.7% of the capital. Meanwhile, Naturgy has published H1 2021 results and launched a new strategic plan (€14 bn in Capex and a €5.9 bn dividend payout) without awaiting the outcome of IFM's takeover. According to Francisco Reynés, president of the company, Naturgy is going to focus on "organic" growth.
Naturgy has approved the payment of a first 2021 interim dividend of €0.3/share (payable on August 4), the new offer price will be €22.07/share.
The success of IFM's partial takeover attempt is becoming increasingly difficult due to:


Delay in the approval of the takeover by the Spanish Government.


Economic outlook improvement, and sharp rise in commodities since takeover announcement on 26 January.


Criteria Caixa's intentions to strengthen its shareholding in Naturgy.


New strategic plan and alliance with Sonatrach.


According to the last communication to the CNMV, CriteriaCaixa already holds a 25.997% stake in Naturgy. Assuming it will still purchase up to 29.9%, that is a 3.903% stake pending, some 37.84 mn shares, i.e. approximately €826 mn (at the closing price of 29 July) almost worth the volume of 50 trading sessions (at the last three months average daily volume). Therefore, the shares should be sustained for a while just on Criteria's purchases.
At the closing price of 29 July, the gross spread to the new adjusted takeover price is c. 1.1% and to Capital IQ median consensus TP is 2.7%. The shares are highly likely to increase over the adjusted offer price on account of Criteria's purchases. From an event-driven perspective, I recommend selling into strength.

Naturgy Energy Group SA

IFM/Naturgy: New Developments