European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>Deutsche Börse’s proposed €8.80/share acquisition of Allfunds, supported by exclusivity and strong industrial logic, transforms Allfunds into a strategically synergistic IFS asset, unlocking meaningful cost efficiencies and platform consolidation benefits.</li>
<li>The market-implied 60% deal probability, attractive 8.5% headline spread, and dividend-adjusted 11.5–12.2% return create a compelling merger-arbitrage setup, with limited interloper risk and manageable regulatory scrutiny.</li>
<li>For investors, hedging €4.30 in DB1 stock per Allfunds share (≈1 DB1 short per 52–53 ALLFG long) enables clean exposure to the spread, while long-term value remains strongest in DB1.</li>
</ul>


Deutsche Börse’s proposed €8.80/share acquisition of Allfunds, supported by exclusivity and strong industrial logic, transforms Allfunds into a strategically synergistic IFS asset, unlocking meaningful cost efficiencies and platform consolidation benefits.
The market-implied 60% deal probability, attractive 8.5% headline spread, and dividend-adjusted 11.5–12.2% return create a compelling merger-arbitrage setup, with limited interloper risk and manageable regulatory scrutiny.
For investors, hedging €4.30 in DB1 stock per Allfunds share (≈1 DB1 short per 52–53 ALLFG long) enables clean exposure to the spread, while long-term value remains strongest in DB1.


Allfunds: A High-Conviction Arb With Dividend Carry and DB1-Backed Upside

<ul>
<li>Allfunds shareholders approved Deutsche Börse’s acquisition with over 99.9% support, removing governance risk and moving the transaction into the regulatory approval phase ahead of expected completion in H1 2027.</li>
<li>Consideration remains €8.80 per share (€6.00 cash plus 0.0122 DB1 shares) plus a €0.20 dividend, implying an effective €9.00 take-out value and maintaining the revised low-beta hedge structure.</li>
<li>At €8.41, the gross spread is ~4.6% and ~7.0% including dividends, annualising to roughly 3–5% given a 14–16 month timeline, with regulatory approvals now the primary remaining risk.</li>
</ul>


Allfunds shareholders approved Deutsche Börse’s acquisition with over 99.9% support, removing governance risk and moving the transaction into the regulatory approval phase ahead of expected completion in H1 2027.
Consideration remains €8.80 per share (€6.00 cash plus 0.0122 DB1 shares) plus a €0.20 dividend, implying an effective €9.00 take-out value and maintaining the revised low-beta hedge structure.
At €8.41, the gross spread is ~4.6% and ~7.0% including dividends, annualising to roughly 3–5% given a 14–16 month timeline, with regulatory approvals now the primary remaining risk.


Deutsche Börse - Allfunds: Shareholder Approval Secured as the Arb Enters Its Regulatory Phase

<ul>
<li>Allfunds Group, a global WealthTech firm born in Spain, attracts market interest, but no firm offers yet. Its top two shareholders (48.1%) are open to selling at the right price.</li>
<li>Since listing, Allfunds' total return has been -59%, driven by interest rate hikes, major distributors shifting to low-risk assets, stock overhang from top shareholders, and low share liquidity.</li>
<li>ChatGPTAllfunds' forward P/E of 12.9x (vs. peers at 18.6x) and 9.5% FCF yield undervalue its strong business model, momentum, market share gains, robust cash conversion, and solid balance sheet.</li>
</ul>


Allfunds Group, a global WealthTech firm born in Spain, attracts market interest, but no firm offers yet. Its top two shareholders (48.1%) are open to selling at the right price.
Since listing, Allfunds' total return has been -59%, driven by interest rate hikes, major distributors shifting to low-risk assets, stock overhang from top shareholders, and low share liquidity.
ChatGPTAllfunds' forward P/E of 12.9x (vs. peers at 18.6x) and 9.5% FCF yield undervalue its strong business model, momentum, market share gains, robust cash conversion, and solid balance sheet.


<ul>
<li>Binding agreement signed at €8.80 shifts consideration toward cash, materially reducing equity risk, eliminating interloper optionality, and moving Allfunds from speculative special situation to late-stage, higher-certainty merger arbitrage profile today.</li>
<li>Revised €6.00 cash and €2.60 stock mix lowers hedge ratio to one DB1 share per 80.49 Allfunds shares, improving risk-adjusted returns.</li>
<li>At €7.96, gross spread is 10.7% and 13.1% including dividends, annualising to 9.1% and 11.1% respectively, with completion probability rising toward 75% pending EU regulatory approval.</li>
</ul>


Binding agreement signed at €8.80 shifts consideration toward cash, materially reducing equity risk, eliminating interloper optionality, and moving Allfunds from speculative special situation to late-stage, higher-certainty merger arbitrage profile today.
Revised €6.00 cash and €2.60 stock mix lowers hedge ratio to one DB1 share per 80.49 Allfunds shares, improving risk-adjusted returns.
At €7.96, gross spread is 10.7% and 13.1% including dividends, annualising to 9.1% and 11.1% respectively, with completion probability rising toward 75% pending EU regulatory approval.


Deutsche Börse - Allfunds: Funding the Finish Line

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

Shanghai Stock Exchange Composite Index / Technical Analysis

Shanghai Stock Exchange Composite Index (SHCOMP INDEX)

<ul>
<li>We remain near-term bullish since our 4/22/25 Compass, and our intermediate-term outlook remains bullish as well (as of our 5/14/25 Compass).</li>
<li>We will maintain our bullish intermediate-term view as long as market dynamics remain healthy and the SPX and ACWI-US are above 5700-5785 and $119-$121.</li>
<li>$125-$126 and $123-$123.50 are short-term supports to watch on ACWI-US; we will maintain our near-term bullish outlook as long as $123 support holds.</li>
</ul>


We remain near-term bullish since our 4/22/25 Compass, and our intermediate-term outlook remains bullish as well (as of our 5/14/25 Compass).
We will maintain our bullish intermediate-term view as long as market dynamics remain healthy and the SPX and ACWI-US are above 5700-5785 and $119-$121.
$125-$126 and $123-$123.50 are short-term supports to watch on ACWI-US; we will maintain our near-term bullish outlook as long as $123 support holds.


China and Japan Breaking Out -- Buy; Bullish Outlook Intact; U.S. Dollar (DXY) Remains Weak

United Kingdom

Allfunds Group plc operates as a wealthtech company. The Company offers data and analytics, portfolio and reporting tools, research, and regulatory services. Allfunds serves customers worldwide.

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Allfunds Group (ALLFG NA)

Allfunds: A High-Conviction Arb With Dividend Carry and DB1-Backed Upside

DB1’s proposed €8.80/share takeover of Allfunds creates a pan-European fund-infrastructure leader, adds cost synergies, and offers investors an...

Jesus Rodriguez Aguilar

Deutsche Börse - Allfunds: Shareholder Approval Secured as the Arb Enters Its Regulatory Phase

Allfunds shareholders approve Deutsche Börse’s €8.80 takeover with 99.9% support. The deal now enters the regulatory phase toward H1 2027 closing,...

Jesus Rodriguez Aguilar

Misunderstood Takeover Target

Allfunds Group, a global WealthTech firm born in Spain, attracts market interest, but no firm offers yet. Its top two shareholders (48.1%) are open...

Jesus Rodriguez Aguilar

Deutsche Börse - Allfunds: Funding the Finish Line

Binding €8.80 deal de-risks Allfunds arbitrage: higher cash mix, dividend carry, limited equity exposure and rising completion odds. Late-stage...

Jesus Rodriguez Aguilar

China and Japan Breaking Out -- Buy; Bullish Outlook Intact; U.S. Dollar (DXY) Remains Weak

China's Shanghai Composite and Japan's TOPIX and TOPIX Small indexes Breaking Out -- Buy; Bullish Outlook Intact on global equities $ACWI; U.S....

Vermilion Research

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