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.

Many Moving Parts in Rothermere's Bid to Take DMGT Private

Event-Driven

Daily Mail & General Trust / Event-Driven

<ul>
<li>
Lord Rothermere has agreed to pay 255p a share for <a href="https://www.smartkarma.com/entities/daily-mail-general-trust-plc" target="_blank" data-smartkarma-citation="entities:21904:1" rel="noopener">Daily Mail &amp; General Trust (DMGT LN)</a> plus debts, up 1.6% from an £810 million or 251p a share proposal first made in July. The deal will be financed with cash from the cash element from the special dividend.
</li>
<li>
The consideration, worth 1263.3p/share as of 2 November (up from my 1,131p estimate in July), 39% premium to the 3-month VWAP, is broken down as follows: 255p/share for the share capital of DMGT + Special Dividend: 568p + 0.5749 Cazoo shares + Final dividend worth 17.3p/share.
</li>
<li>The deal will close, in my view. Gross spread as of 10 November was 8.5%. Recommendation is long DMGT LN. The risk is a declining share price of Cazoo, so 0.5749 Cazoo shares may be shorted per DMGT share to lock in the spread, but the hedge should be adjusted downwards if the share price of CZOO rises above the equivalent of 738p, as RCL will deliver a lesser proportion of CZOO shares.</li>
</ul>



Lord Rothermere has agreed to pay 255p a share for Daily Mail &amp; General Trust (DMGT LN) plus debts, up 1.6% from an £810 million or 251p a share proposal first made in July. The deal will be financed with cash from the cash element from the special dividend.


The consideration, worth 1263.3p/share as of 2 November (up from my 1,131p estimate in July), 39% premium to the 3-month VWAP, is broken down as follows: 255p/share for the share capital of DMGT + Special Dividend: 568p + 0.5749 Cazoo shares + Final dividend worth 17.3p/share.

The deal will close, in my view. Gross spread as of 10 November was 8.5%. Recommendation is long DMGT LN. The risk is a declining share price of Cazoo, so 0.5749 Cazoo shares may be shorted per DMGT share to lock in the spread, but the hedge should be adjusted downwards if the share price of CZOO rises above the equivalent of 738p, as RCL will deliver a lesser proportion of CZOO shares.


Daily Mail & General Trust

RCL/DMGT: Package Value and Spread