European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>The Delisting Agreement should end the Atlantic bidding for <a href="https://www.smartkarma.com/entities/aareal-bank-ag" target="_blank" data-smartkarma-citation="entities:21584:1" rel="noopener">Aareal Bank AG (ARL GR)</a> saga. Atlantic has been hoovering shares in the market since last 7 June.</li>
<li>Atlantic probably owns c.90.8%. Based on daily trading volumes, it would take many days to acquire shares and reach the 95% barrier required to implement a squeeze-out.</li>
<li>Spread is 0.3%/2.3% (gross/annualised, assuming settlement on 8 December), not too bad for a quick buck, but liquidity is razor thin.</li>
</ul>


The Delisting Agreement should end the Atlantic bidding for Aareal Bank AG (ARL GR) saga. Atlantic has been hoovering shares in the market since last 7 June.
Atlantic probably owns c.90.8%. Based on daily trading volumes, it would take many days to acquire shares and reach the 95% barrier required to implement a squeeze-out.
Spread is 0.3%/2.3% (gross/annualised, assuming settlement on 8 December), not too bad for a quick buck, but liquidity is razor thin.


Advent & CenterBridge/​Aareal Bank AG: Delisting Offer

<ul>
<li>By considering both Advent's valuation of Aareon and Aareon's multiple implied valuation, the consortium was paying 0.43x P/BV for the banking business, well below comparables trading at 1.4x.</li>
<li>It is no surprise then that the offer lapsed. According to my SOTP, by conservatively applying 0.8x P/BV for the banking business, upside for the shares ranges from 52-62%.</li>
<li>Recommendation is long ARL GR. The shares represent good value and the catalyst is the future spin-off.</li>
</ul>


By considering both Advent's valuation of Aareon and Aareon's multiple implied valuation, the consortium was paying 0.43x P/BV for the banking business, well below comparables trading at 1.4x.
It is no surprise then that the offer lapsed. According to my SOTP, by conservatively applying 0.8x P/BV for the banking business, upside for the shares ranges from 52-62%.
Recommendation is long ARL GR. The shares represent good value and the catalyst is the future spin-off.


Advent & CenterBridge/Aareal Bank AG: Lapsed Offer

<ul>
<li>All conditions of the takeover offer have been fulfilled after the ECB approved the acquisition of a majority stake in Aareal. Settlement will take place by 7 June.</li>
<li>The shares closed 3.33% higher vs. prior trading session, above the offer price(!). Aareal is trading at an undemanding 0.6x P/BV and 10.7x NTM Fwd P/E. No dividend is expected.</li>
<li>The bidders specifically left open the possibility of a squeeze-out/delisting. If the 90% threshold is confirmed, I believe Atlantic will compulsorily acquire the remaining shares at €33/share.</li>
</ul>


All conditions of the takeover offer have been fulfilled after the ECB approved the acquisition of a majority stake in Aareal. Settlement will take place by 7 June.
The shares closed 3.33% higher vs. prior trading session, above the offer price(!). Aareal is trading at an undemanding 0.6x P/BV and 10.7x NTM Fwd P/E. No dividend is expected.
The bidders specifically left open the possibility of a squeeze-out/delisting. If the 90% threshold is confirmed, I believe Atlantic will compulsorily acquire the remaining shares at €33/share.


Advent & CenterBridge/​Aareal Bank AG: All Conditions Met

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Shinko Electric Industries / Event-Driven

<ul>
<li>If <a href="https://www.smartkarma.com/entities/descente-ltd" target="_blank" data-smartkarma-citation="entities:8225:1" rel="noopener">Descente Ltd (8114 JP)</a> earnings disappoints, buy the dip. <a href="https://www.smartkarma.com/entities/itochu-corp" target="_blank" data-smartkarma-citation="entities:18448:1" rel="noopener">Itochu Corp (8001 JP)</a> is buying for the long-term.</li>
<li>
<a href="https://www.smartkarma.com/entities/mgm-china-holdings-ltd" target="_blank" data-smartkarma-citation="entities:472:1" rel="noopener">MGM China Holdings (2282 HK)</a> has gained market share in mass table market, VIP, and total revenue. Yet MGM's FY24E EV/EBITDA is ~40% below its two-year forward average EV/EBITDA pre-Covid.</li>
<li>If you had a J-REIT portfolio, <a href="https://www.smartkarma.com/entities/sankei-real-estate-inc" target="_blank" data-smartkarma-citation="entities:35239:1" rel="noopener">Sankei Real Estate (2972 JP)</a> would go in and push something else out or smaller. I think one gets beta-plus, which is usually called alpha.</li>
</ul>


If Descente Ltd (8114 JP) earnings disappoints, buy the dip. Itochu Corp (8001 JP) is buying for the long-term.

MGM China Holdings (2282 HK) has gained market share in mass table market, VIP, and total revenue. Yet MGM's FY24E EV/EBITDA is ~40% below its two-year forward average EV/EBITDA pre-Covid.
If you had a J-REIT portfolio, Sankei Real Estate (2972 JP) would go in and push something else out or smaller. I think one gets beta-plus, which is usually called alpha.


Last Week In Event SPACE: Shinko Electric Industries, MGM China, Decente, Sankei Real Estate,

Equity Analyst, Event-driven, Quiddity Advisors

Janaghan Jeyakumar, CFA

Equity Analyst, Event-driven

<ul>
<li>In this insight, we take a look at the names leading the race to become ADDs/DELETEs for the DAX, MDAX, and SDAX Indices.</li>
<li>Based on current share prices, there are no changes for the DAX index. However, there could be multiple changes for the MDAX and SDAX indices.</li>
<li>I have also discussed the index implications for the <a href="https://www.smartkarma.com/entities/dr-ing-h-c-f-porsche-aktiengesellschaft" target="_blank" data-smartkarma-citation="entities:36343:1" rel="noopener">Porsche AG (P911 GR)</a> IPO.</li>
</ul>


In this insight, we take a look at the names leading the race to become ADDs/DELETEs for the DAX, MDAX, and SDAX Indices.
Based on current share prices, there are no changes for the DAX index. However, there could be multiple changes for the MDAX and SDAX indices.
I have also discussed the index implications for the Porsche AG (P911 GR) IPO.


DAX/​​​MDAX/​​​SDAX Quiddity Leaderboard Dec 22: Porsche AG IPO Makes Things Interesting

Germany

Aareal Bank AG offers structured real estate financing, property management, and information technology consulting services for the real estate industry. Aareal operates in Europe and North America.

Aareal Bank AG (ARL GR)

Advent & CenterBridge/Aareal Bank AG: Delisting Offer

Atlantic's acquisition of Aareal Bank AG shares may come to an end with the Delisting Agreement, as it currently owns around 90.8% and needs to...

Jesus Rodriguez Aguilar

Advent & CenterBridge/Aareal Bank AG: Lapsed Offer

According to my SOTP, the consortium was trying to acquire Aareal Bank AG at an implied huge discount to BV. Not only Petrus and Teleios, but...

Jesus Rodriguez Aguilar

Advent & CenterBridge/Aareal Bank AG: All Conditions Met

All offer requirements have now been met, and the acquisition offer will be settled by June 7th. Shareholders who accepted the offer will get €33...

Jesus Rodriguez Aguilar

Last Week In Event SPACE: Shinko Electric Industries, MGM China, Decente, Sankei Real Estate,

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

DAX/MDAX/SDAX Quiddity Leaderboard Dec 22: Porsche AG IPO Makes Things Interesting

Porsche AG's IPO of preferred shares is expected to start trading shortly and there could be interesting index implications for this stock in the...

Janaghan Jeyakumar, CFA

Advent & CenterBridge/​Aareal Bank AG: Delisting Offer

​Atlantic's acquisition of Aareal Bank AG shares may come to an end with the Delisting Agreement, as it currently owns around 90.8% and needs to...

Jesus Rodriguez Aguilar

Advent & CenterBridge/Aareal Bank AG: Lapsed Offer

According to my SOTP, the consortium was trying to acquire Aareal Bank AG at an implied huge discount to BV. Not only Petrus and Teleios, but...

Jesus Rodriguez Aguilar

Advent & CenterBridge/​Aareal Bank AG: All Conditions Met

All offer requirements have now been met, and the acquisition offer will be settled by June 7th. Shareholders who accepted the offer will get €33...

Jesus Rodriguez Aguilar

Last Week In Event SPACE: Shinko Electric Industries, MGM China, Decente, Sankei Real Estate,

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

DAX/​​​MDAX/​​​SDAX Quiddity Leaderboard Dec 22: Porsche AG IPO Makes Things Interesting

Porsche AG's IPO of preferred shares is expected to start trading shortly and there could be interesting index implications for this stock in the...

Janaghan Jeyakumar, CFA

Advent & CenterBridge/Aareal Bank AG: Delisting Offer

Atlantic's acquisition of Aareal Bank AG shares may come to an end with the Delisting Agreement, as it currently owns around 90.8% and needs to...

Advent & CenterBridge/Aareal Bank AG: All Conditions Met

DAX/MDAX/SDAX Quiddity Leaderboard Dec 22: Porsche AG IPO Makes Things Interesting