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.

Play Communications - Iliad: Offer Announcement

Event-Driven

A private equity consortium (Lorca) formed by Cinven, Providence and KKR has launched a friendly voluntary takeover offer for <a href="https://www.smartkarma.com/entities/masmovil-ibercom-sa" target="_blank" data-smartkarma-citation="entities:29013:1" rel="noopener">Masmovil Ibercom (MAS SM)</a> at a price of EUR 22.5 per share for the whole share capital.
<ul class="">
<li>Values MasMóvil at EUR 2,963.57 mn.
</li>
<li>Total EV of nearly EUR 5 bn</li>
<li>It is a 20.2% premium to the closing price on Friday, 29 May, the last trading session prior to the bid.</li>
<li>
The bidder has financial guarantees from Barclays, BNP Paribas and Morgan Stanley, for an amount of EUR 987.86 million each, which covers the whole of the consideration offered, i.e. EUR 2,963.57 million.
</li>
<li>
The offer has been recommended by MásMóvil directors. A break fee will be payable by the offeror if a competing offer is announced and Lorca’s offer lapses or is withdrawn.
<ul>
<li>0.76% of the value of the offer (€22.6 mn).</li>
</ul>
</li>
</ul>
The bidders have offered a EUR 120 mn bonus to 13 key executives, conditional to certain milestones being achieved over three years. This scheme could be extended to more employees.
The worsening of the Covid-19 economic crisis should favour growth in the low cost segment.
The market will favour inorganic growth in the near future. Last week's <a href="https://curia.europa.eu/jcms/jcms/p1_3030929" target="_blank" rel="noopener">ruling by the EU Courts against the European Commission's veto on the merger of O2</a>, a British subsidiary of Telefónica, with its competitor Three, because it reduced the number of network operators, has opened a new scenario for mergers between operators in different European countries. An example is the merger between O2 and Virgin (Liberty) in the UK.
MásMóvil has closed on 1 June at EUR 23.18, 3% above the offer price. The market believes that the transaction will close and there will be an improved offer.
On a quick LBO calculation, a cumulative IRR of c. 20% could be obtained by year 8 (i.e. 2027).
The consideration does not seem a knock-out offer and other suitors may appear, in my view. The consortium appears to have given itself some room to improve the bid price to a level of EUR 26 per share, in line with the median of close comparables. On this basis, the recommendation is Long MAS SM with a target price of EUR 26.

A private equity consortium (Lorca) formed by Cinven, Providence and KKR has launched a friendly voluntary takeover offer for Masmovil Ibercom (MAS SM) at a price of EUR 22.5 per share for the whole share capital.

Values MasMóvil at EUR 2,963.57 mn.

Total EV of nearly EUR 5 bn
It is a 20.2% premium to the closing price on Friday, 29 May, the last trading session prior to the bid.

The bidder has financial guarantees from Barclays, BNP Paribas and Morgan Stanley, for an amount of EUR 987.86 million each, which covers the whole of the consideration offered, i.e. EUR 2,963.57 million.


The offer has been recommended by MásMóvil directors. A break fee will be payable by the offeror if a competing offer is announced and Lorca’s offer lapses or is withdrawn.

0.76% of the value of the offer (€22.6 mn).



The bidders have offered a EUR 120 mn bonus to 13 key executives, conditional to certain milestones being achieved over three years. This scheme could be extended to more employees.
The worsening of the Covid-19 economic crisis should favour growth in the low cost segment.
The market will favour inorganic growth in the near future. Last week's ruling by the EU Courts against the European Commission's veto on the merger of O2, a British subsidiary of Telefónica, with its competitor Three, because it reduced the number of network operators, has opened a new scenario for mergers between operators in different European countries. An example is the merger between O2 and Virgin (Liberty) in the UK.
MásMóvil has closed on 1 June at EUR 23.18, 3% above the offer price. The market believes that the transaction will close and there will be an improved offer.
On a quick LBO calculation, a cumulative IRR of c. 20% could be obtained by year 8 (i.e. 2027).
The consideration does not seem a knock-out offer and other suitors may appear, in my view. The consortium appears to have given itself some room to improve the bid price to a level of EUR 26 per share, in line with the median of close comparables. On this basis, the recommendation is Long MAS SM with a target price of EUR 26.

Masmovil Ibercom SA

MásMóvil: Private Equity Is Back