European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>Since Brookfield's July 8 takeover interest for Grifols was announced, the situation has become complicated, with unclear pricing, funding challenges, and uncertainty about whether an offer will materialize or when.</li>
<li>Grifols operates in a consolidated plasma-derived therapies market with high entry barriers, and its current valuation of 8.6x NTM EBITDAe significantly undervalues it compared to CSL's 19.2x.</li>
<li>B shares closed on September 20 in Madrid at a 17.3% discount to A shares. Paying this spread would be my favored approach to gain exposure to a potential offer.</li>
</ul>


Since Brookfield's July 8 takeover interest for Grifols was announced, the situation has become complicated, with unclear pricing, funding challenges, and uncertainty about whether an offer will materialize or when.
Grifols operates in a consolidated plasma-derived therapies market with high entry barriers, and its current valuation of 8.6x NTM EBITDAe significantly undervalues it compared to CSL's 19.2x.
B shares closed on September 20 in Madrid at a 17.3% discount to A shares. Paying this spread would be my favored approach to gain exposure to a potential offer.


Brookfield/Grifols: Recap and Analysis of Latest Developments

<ul>
<li>Since mid-August, share-price spreads have generally widened across our European liquid universe of ordinary and preferred shares (13 have tightened, 4 widened, 2 remained at same level).</li>
<li>Recommended trades long preferred / short ordinary shares: Atlas Copco, Grifols SA, Media-for-Europe, Sixt.</li>
<li>Recommended trades long ordinary / short preferred shares: Carlsberg, Henkel, SSAB Svenska Stal.</li>
</ul>


Since mid-August, share-price spreads have generally widened across our European liquid universe of ordinary and preferred shares (13 have tightened, 4 widened, 2 remained at same level).
Recommended trades long preferred / short ordinary shares: Atlas Copco, Grifols SA, Media-for-Europe, Sixt.
Recommended trades long ordinary / short preferred shares: Carlsberg, Henkel, SSAB Svenska Stal.


Liquid Universe of European Ordinary and Preferred Shares: September‘24 Report

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>CTBC's (likely) goal is to boost <a href="https://www.smartkarma.com/entities/shin-kong-financial-holding" target="_blank" data-smartkarma-citation="entities:15351:1" rel="noopener">Shin Kong (2888 TT)</a>'s shares, so as to make the <a href="https://www.smartkarma.com/entities/taishin-financial-holding" target="_blank" data-smartkarma-citation="entities:715:1" rel="noopener">Taishin Financial Holding (2887 TT)</a> merger unpalatable for Shin Kong shareholders. That smells of opportunity.</li>
<li>
<a href="https://www.smartkarma.com/entities/jardine-matheson-holdings-ltd" target="_blank" data-smartkarma-citation="entities:19718:1" rel="noopener">Jardine Matheson Holdings (JM SP)</a> is trading cheap to NAV and its implied stub. It may well get cheaper.</li>
<li>
<a href="https://www.smartkarma.com/entities/toyota-motor-corp" target="_blank" data-smartkarma-citation="entities:73:1" rel="noopener">Toyota Motor (7203 JP)</a>'s resulting supply/demand profile is mixed, but on balance, expect to see positive demand into the H1 earnings announcement. Watch for another buyback possibly announced then.</li>
</ul>


CTBC's (likely) goal is to boost Shin Kong (2888 TT)'s shares, so as to make the Taishin Financial Holding (2887 TT) merger unpalatable for Shin Kong shareholders. That smells of opportunity.

Jardine Matheson Holdings (JM SP) is trading cheap to NAV and its implied stub. It may well get cheaper.

Toyota Motor (7203 JP)'s resulting supply/demand profile is mixed, but on balance, expect to see positive demand into the H1 earnings announcement. Watch for another buyback possibly announced then.


Last Week in Event SPACE: Shin Kong/Taishin Financial, Jardine Matheson, Toyota Motors, Huafa Props

<ul>
<li>Press reports Brookfield is seeking support from sovereign wealth funds, including those from Abu Dhabi (ADQ) and Singapore (GIC), to back its bid, though discussions remain in the early stages.</li>
<li>The news about the potential involvement of ADQ and GIC are positive as any support or addition of new investors increases the likelihood of a takeover bid for Grifols.</li>
<li>The discount is closing accordingly, at mid-session August 30, the share-price spread has tightened to 15.4%, the lowest ever. I suggest maintaining the position long B (or ADR)/short A shares.</li>
</ul>


Press reports Brookfield is seeking support from sovereign wealth funds, including those from Abu Dhabi (ADQ) and Singapore (GIC), to back its bid, though discussions remain in the early stages.
The news about the potential involvement of ADQ and GIC are positive as any support or addition of new investors increases the likelihood of a takeover bid for Grifols.
The discount is closing accordingly, at mid-session August 30, the share-price spread has tightened to 15.4%, the lowest ever. I suggest maintaining the position long B (or ADR)/short A shares.


Brookfield Explores Sovereign Funds for Grifols Takeover Bid

<ul>
<li>
<a href="https://www.smartkarma.com/entities/alimentation-couche-tard-inc" target="_blank" data-smartkarma-citation="entities:25103:1" rel="noopener">Alimentation Couche-Tard</a> has returned to the well with a NBIO for <a href="https://www.smartkarma.com/entities/seven-i-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:1041:1" rel="noopener">7&amp;I (3382 JP)</a>. This'll be anathema to politicians who view 7&amp;i as a local champion AND a lifeline entity.</li>
<li>Global travel outfit <a href="https://www.smartkarma.com/entities/webjet-ltd" target="_blank" data-smartkarma-citation="entities:17059:1" rel="noopener">Webjet Ltd (WEB AU)</a> has announced the separation of its two key divisions. The sum of the part is greater than the whole? I'll take that bet.</li>
<li>The Kim family turn their focus to <a href="https://www.smartkarma.com/entities/hanwha-galleria-corp" target="_blank" data-smartkarma-citation="entities:39998:1" rel="noopener">Hanwha Galleria (452260 KS)</a> in the latest Partial Offer within the Hanwha Group complex. </li>
</ul>



Alimentation Couche-Tard has returned to the well with a NBIO for 7&amp;I (3382 JP). This'll be anathema to politicians who view 7&amp;i as a local champion AND a lifeline entity.
Global travel outfit Webjet Ltd (WEB AU) has announced the separation of its two key divisions. The sum of the part is greater than the whole? I'll take that bet.
The Kim family turn their focus to Hanwha Galleria (452260 KS) in the latest Partial Offer within the Hanwha Group complex. 


Last Week in Event SPACE: Seven & I Holdings, Webjet, Hanwha Group, Swire Pac/Props, EOFlow

Spain

Grifols S.A. develops, manufactures, and markets plasma derivatives, IV Therapy, enteral nutrition, diagnostic systems, and medical materials.

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Grifols (GRF SQ)

Brookfield/Grifols: Recap and Analysis of Latest Developments

Since Brookfield's July 8 takeover interest for Grifols was announced, the situation has become complicated, with unclear pricing, funding...

Jesus Rodriguez Aguilar

Liquid Universe of European Ordinary and Preferred Shares: September‘24 Report

Since mid-August, share-price spreads have generally widened across our European liquid universe of ordinary and preferred shares (13 have...

Jesus Rodriguez Aguilar

Last Week in Event SPACE: Shin Kong/Taishin Financial, Jardine Matheson, Toyota Motors, Huafa Props

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

Brookfield Explores Sovereign Funds for Grifols Takeover Bid

Press reports Brookfield is seeking support from sovereign wealth funds, including those from Abu Dhabi (ADQ) and Singapore (GIC), to back its bid,...

Jesus Rodriguez Aguilar

Last Week in Event SPACE: Seven & I Holdings, Webjet, Hanwha Group, Swire Pac/Props, EOFlow

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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