European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>Following conversion, the Benettons became the top Dufry's shareholders (27.5%). There'll be a mandatory offer for the minorities. The conversion ratio is 0.1583 DUFN/AGL with a cash alternative of €6.33.</li>
<li>A +1.1% share swap spread vs. +3.3% cash alternative spread means an all-share deal is most likely (with a 67% dilution to Dufry's shareholders). Still, minorities could refuse to tender.</li>
<li>The deal is not expensive. It resembles a debt for equity swap, with Autogrill's balance sheet rescuing Dufry's (rated B+) and the Benettons happily paying a nil control premium.</li>
</ul>


Following conversion, the Benettons became the top Dufry's shareholders (27.5%). There'll be a mandatory offer for the minorities. The conversion ratio is 0.1583 DUFN/AGL with a cash alternative of €6.33.
A +1.1% share swap spread vs. +3.3% cash alternative spread means an all-share deal is most likely (with a 67% dilution to Dufry's shareholders). Still, minorities could refuse to tender.
The deal is not expensive. It resembles a debt for equity swap, with Autogrill's balance sheet rescuing Dufry's (rated B+) and the Benettons happily paying a nil control premium.


Dufry/Autogrill: Potential Massive Dilution

<ul>
<li>The deal is done with the transfer of Edizione's 50.3% stake in Autogrill under way, and with  all main hurdles cleared. Dufry must launch and offer to buy out minorities. </li>
<li>Autogrill shares closed at €6.698 on 30 January, also the implied value of the 0.158 Autogrill/Dufry share swap is 5.8% above the €6.33/share "initial" cash offer. The market expects more.</li>
<li>The deal will not fall through but the price is still being negotiated, possibly around €6.8-6.9/share. The issue will now become what dilution/leverage will Dufry's patient shareholders endure.</li>
</ul>


The deal is done with the transfer of Edizione's 50.3% stake in Autogrill under way, and with  all main hurdles cleared. Dufry must launch and offer to buy out minorities. 
Autogrill shares closed at €6.698 on 30 January, also the implied value of the 0.158 Autogrill/Dufry share swap is 5.8% above the €6.33/share "initial" cash offer. The market expects more.
The deal will not fall through but the price is still being negotiated, possibly around €6.8-6.9/share. The issue will now become what dilution/leverage will Dufry's patient shareholders endure.


Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>Given recent corporate events in S-REIT land, there could be some considerable money to be allocated to the sector near-term</li>
<li>
<a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:787:1" rel="noopener">Alibaba (ADR) (BABA US)</a> / <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a> issued an announcement it would pursue a primary listing on the HKEX. This will make BABA Southbound-eligible</li>
<li>At 0.81x newly-lowered book value, <a href="https://www.smartkarma.com/entities/australian-unity-office-fund" target="_blank" data-smartkarma-citation="entities:24077:1" rel="noopener">Australian Unity Office Fund (AOF AU)</a> is trading at a relatively low multiple. </li>
</ul>


Given recent corporate events in S-REIT land, there could be some considerable money to be allocated to the sector near-term

Alibaba (ADR) (BABA US) / Alibaba Group (9988 HK) issued an announcement it would pursue a primary listing on the HKEX. This will make BABA Southbound-eligible
At 0.81x newly-lowered book value, Australian Unity Office Fund (AOF AU) is trading at a relatively low multiple. 


Last Week in Event SPACE: Mapletree, Alibaba, Australian Unity Office

<ul>
<li>Dufry and Autogrill agree an all-stock deal (0.158 DUFN SW x 1 AGL IM) to create a travel-related concession giant. The Benettons will become the largest shareholders (c.25%).</li>
<li>The deal should bolster Dufry's balance sheet and add scale, helpful in tenders. Shareholders of Autogrill seem to be the main beneficiaries of the deal.</li>
<li>As per the terms, spread on all-share is 14% premium, while that on cash alternative is 0.2% premium. Only a recovery of Dufry's share price would justify opening a position.</li>
</ul>


Dufry and Autogrill agree an all-stock deal (0.158 DUFN SW x 1 AGL IM) to create a travel-related concession giant. The Benettons will become the largest shareholders (c.25%).
The deal should bolster Dufry's balance sheet and add scale, helpful in tenders. Shareholders of Autogrill seem to be the main beneficiaries of the deal.
As per the terms, spread on all-share is 14% premium, while that on cash alternative is 0.2% premium. Only a recovery of Dufry's share price would justify opening a position.


Dufry/Autogrill: Another Attempt to Create a Travel-Concession Giant

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

EURO STOXX 50 Price EUR / Technical Analysis

Our intermediate-term outlook remains constructive with major support levels holding on the broad global indexes (MSCI ACWI, ACWI ex-US, EM, and EAFE). Still, we continue to see some reason for caution as various market dynamics have deteriorated, leading us to a more neutral outlook in the near-term.

Our intermediate-term outlook remains constructive with major support levels holding on the broad global indexes (MSCI ACWI, ACWI ex-US, EM, and EAFE). Still, we continue to see some reason for caution as various market dynamics have deteriorated, leading us to a more neutral outlook in the near-term.

Italy

Autogrill S.p.A., an Italian multinational company, operates in various countries offering food and beverage and retail services for people on the move on key motorways, main rail and air hubs around the world. The Company conducts the majority of its business in North America and Italy where it obtained concessions, offering a wide portfolio of brands and food and beverage products.

Autogrill SpA (AGL IM)

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Jesus Rodriguez Aguilar

Last Week in Event SPACE: Mapletree, Alibaba, Australian Unity Office

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

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Major Breakout For EURO STOXX 50

Our intermediate-term outlook remains constructive with major support levels holding on the broad global indexes (MSCI ACWI, ACWI ex-US, EM, and...

Vermilion Research