European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

On 19 November, the shareholders' meetings approved the mandatory conversion of savings shares into ordinary shares as well as the distribution of the extraordinary dividend.
<ul>
<li>The mandatory conversion of savings shares into ordinary shares, on the basis of a conversion ratio equal to 0.67 ordinary shares for each savings share.</li>
<li>As an incentive, subject to the carrying out of the conversion, the distribution of an extraordinary dividend of €0.75 for each existing and newly issued ordinary share.</li>
</ul>
The rationale for the conversion is:
<ul class="">
<li>Simplifying the capital structure of Buzzi and reducing corporate obligations and costs.</li>
<li>Untangling the governance, increasing the total free float of the ordinary shares, thus allowing even greater liquidity.</li>
<li>Jumping on a trend towards simplification of the share structure of Italian listed companies, where some companies have converted their savings shares into ordinary shares.</li>
</ul>
The difference advantage of the savings shares is not a large amount, just €976,800.
Since announcement of the conversion ratio, the spread has moved between 2.5% and 0.45%.
<ul>
<li>The current spread is 0.84%.</li>
<li>There is not definitive date for the conversion, but the market believes it will happen very soon.</li>
</ul>
Recommendation is to monitor the spread to set up the trade long savings shares / short ordinary shares if and when the spread widens.
Since the conversion announcement, the average daily liquidity of the savings shares has been 484k. There were very large volumes traded on 12 October (3.4 mn and 2.5 mn respectively) and 6 November.

On 19 November, the shareholders' meetings approved the mandatory conversion of savings shares into ordinary shares as well as the distribution of the extraordinary dividend.

The mandatory conversion of savings shares into ordinary shares, on the basis of a conversion ratio equal to 0.67 ordinary shares for each savings share.
As an incentive, subject to the carrying out of the conversion, the distribution of an extraordinary dividend of €0.75 for each existing and newly issued ordinary share.

The rationale for the conversion is:

Simplifying the capital structure of Buzzi and reducing corporate obligations and costs.
Untangling the governance, increasing the total free float of the ordinary shares, thus allowing even greater liquidity.
Jumping on a trend towards simplification of the share structure of Italian listed companies, where some companies have converted their savings shares into ordinary shares.

The difference advantage of the savings shares is not a large amount, just €976,800.
Since announcement of the conversion ratio, the spread has moved between 2.5% and 0.45%.

The current spread is 0.84%.
There is not definitive date for the conversion, but the market believes it will happen very soon.

Recommendation is to monitor the spread to set up the trade long savings shares / short ordinary shares if and when the spread widens.
Since the conversion announcement, the average daily liquidity of the savings shares has been 484k. There were very large volumes traded on 12 October (3.4 mn and 2.5 mn respectively) and 6 November.

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

We remain constructive on global equities as the MSCI ACWI, ACWI ex-U.S., and EAFE indexes consolidate above their respective 200-day moving averages. On the other hand, the MSCI EM index is breaking below its 200-day moving average and is flirting with a breakdown below 56,000 support (local currency).  We see attractive Opportunities in Manufacturing &amp; Materials in Europe, Japan and China, India, and Taiwan.

We remain constructive on global equities as the MSCI ACWI, ACWI ex-U.S., and EAFE indexes consolidate above their respective 200-day moving averages. On the other hand, the MSCI EM index is breaking below its 200-day moving average and is flirting with a breakdown below 56,000 support (local currency).  We see attractive Opportunities in Manufacturing &amp; Materials in Europe, Japan and China, India, and Taiwan. 

Global Indexes Are Consolidating, EM Is Breaking Down

Italy

Buzzi Unicem S.p.A., through subsidiaries, produces and markets building materials.  The Company produces cement and ready-mix concrete in Italy and the United States.

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Buzzi Unicem (BZU IM)

Buzzi Unicem's Savings Shares Conversion

Buzzi will convert its savings shares into ordinary shares at a date tba soon. The spread has ranged from 2.5% to 0.5%. I recommend monitoring the...

Jesus Rodriguez Aguilar

Global Indexes Are Consolidating, EM Is Breaking Down

We remain constructive on global equities as the MSCI ACWI, ACWI ex-U.S., and EAFE indexes consolidate above their respective 200-day moving...

Vermilion Research

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