European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>
Since mid-June, share-price spreads have generally tightened across our European liquid universe of ordinary and preferred shares (13 have tightened, 5 widened, 1 remained at same level).</li>
<li>Recommended trades long preferred / short ordinary shares: Atlas Copco, Grifols (see section on the company), Media-for-Europe, Sixt.</li>
<li>Recommended trades long ordinary / short preferred shares: Henkel, SSAB Svenska Stal.</li>
</ul>



Since mid-June, share-price spreads have generally tightened across our European liquid universe of ordinary and preferred shares (13 have tightened, 5 widened, 1 remained at same level).
Recommended trades long preferred / short ordinary shares: Atlas Copco, Grifols (see section on the company), Media-for-Europe, Sixt.
Recommended trades long ordinary / short preferred shares: Henkel, SSAB Svenska Stal.


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

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>The Toyota Group cross-holding ecosystem is in flux. They started with a small announcement by <a href="https://www.smartkarma.com/entities/aisin-corp" target="_blank" data-smartkarma-citation="entities:11809:1" rel="noopener">Aisin (7259 JP)</a> but moves have come fast and furious.</li>
<li>Apparently minorities are grumbling to the SFC about the low-balled Offer for <a href="https://www.smartkarma.com/entities/asia-cement-china-holdings" target="_blank" data-smartkarma-citation="entities:3374:1" rel="noopener">Asia Cement China (743 HK)</a>. And for good reason. The best course of action? Vote against the Scheme.</li>
<li>
<a href="https://www.smartkarma.com/entities/hanwha-corporation" target="_blank" data-smartkarma-citation="entities:10619:1" rel="noopener">Hanwha Corporation (000880 KS)</a> is trading at a steep NAV discount. And the controlling family is making  a partial Offer to gain majority control. </li>
</ul>


The Toyota Group cross-holding ecosystem is in flux. They started with a small announcement by Aisin (7259 JP) but moves have come fast and furious.
Apparently minorities are grumbling to the SFC about the low-balled Offer for Asia Cement China (743 HK). And for good reason. The best course of action? Vote against the Scheme.

Hanwha Corporation (000880 KS) is trading at a steep NAV discount. And the controlling family is making  a partial Offer to gain majority control. 


Last Week in Event SPACE: Toyota, Asia Cement, Hanwha Corp, Kokusai Electric, Keisei Electric

<ul>
<li>Grifols' founding families and Brookfield ask the Board for the necessary information to evaluate an offer for 100% of <a href="https://www.smartkarma.com/entities/grifols-sa" target="_blank" data-smartkarma-citation="entities:21274:1" rel="noopener">Grifols SA (GRF SM)</a>. The CNMV has halted trading in the shares.</li>
<li>Grifols is worth €5.5 billion, after plummeting 39% in 2024. The deal smacks of desperation from the founding families, worried not to lose control of the company to debt holders. </li>
<li>There should be a minimum premium to guarantee offer success, at least 15% to current share price (maybe even 30%). B shares are protected in case of takeover.</li>
</ul>


Grifols' founding families and Brookfield ask the Board for the necessary information to evaluate an offer for 100% of Grifols SA (GRF SM). The CNMV has halted trading in the shares.
Grifols is worth €5.5 billion, after plummeting 39% in 2024. The deal smacks of desperation from the founding families, worried not to lose control of the company to debt holders. 
There should be a minimum premium to guarantee offer success, at least 15% to current share price (maybe even 30%). B shares are protected in case of takeover.


Equity Bottom-Up

<ul>
<li>Moody's Ratings downgraded Grifols' corporate family rating to B3 from B2, with a stable outlook, due to high leverage, and complex, opaque corporate governance involving related-party transactions.</li>
<li>Moody's considers Grifols's liquidity to still be "fragile," noting that "while adequate for the next 12 months, beyond that, maintaining adequate liquidity will depend on returning to positive FCF generation.</li>
<li>For risk-tolerant investors, the current low share price could present a long-term buying opportunity if Grifols successfully executes its strategic initiatives.</li>
</ul>


Moody's Ratings downgraded Grifols' corporate family rating to B3 from B2, with a stable outlook, due to high leverage, and complex, opaque corporate governance involving related-party transactions.
Moody's considers Grifols's liquidity to still be "fragile," noting that "while adequate for the next 12 months, beyond that, maintaining adequate liquidity will depend on returning to positive FCF generation.
For risk-tolerant investors, the current low share price could present a long-term buying opportunity if Grifols successfully executes its strategic initiatives.


External reports (aggregated public sources), Value Investors Club

Value Investors Club (VIC)

External reports (aggregated public sources)

Value Investors Club

<ul><li>Gotham City Research's short report on Grifols is seen as misguided, creating a buying opportunity for investors</li><li>Grifols is still viewed as a strong business with potential for significant growth in the next 12-18 months</li><li>With COVID headwinds normalizing and a new management team in place, Grifols is expected to see a 140% increase in stock price if it trades at historical average EBITDA multiple, making it a compelling long opportunity</li></ul>This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

Gotham City Research's short report on Grifols is seen as misguided, creating a buying opportunity for investorsGrifols is still viewed as a strong business with potential for significant growth in the next 12-18 monthsWith COVID headwinds normalizing and a new management team in place, Grifols is expected to see a 140% increase in stock price if it trades at historical average EBITDA multiple, making it a compelling long opportunityThis content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

Grifols S A (GRF/P SM) - Friday, Mar 22, 2024

Spain

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

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Grifols SA (GRF SM)

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

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

Jesus Rodriguez Aguilar

Last Week in Event SPACE: Toyota, Asia Cement, Hanwha Corp, Kokusai Electric, Keisei Electric

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

(Desperate) Takeover Bid in the Making

Grifols' founding families and Brookfield ask the Board for the necessary information to evaluate an offer for 100% of Grifols SA (GRF SM). The...

Jesus Rodriguez Aguilar

Another Debt Downgrade

Moody's downgrades Grifols' rating due to high leverage and opaque governance. For risk-tolerant investors, the current low share price could...

Jesus Rodriguez Aguilar

Grifols S A (GRF/P SM) - Friday, Mar 22, 2024

Gotham City Research's short report on Grifols is seen as misguided, creating a buying opportunity for investors. Grifols is still viewed as a...

Value Investors Club (VIC)

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

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

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

Jesus Rodriguez Aguilar

Last Week in Event SPACE: Toyota, Asia Cement, Hanwha Corp, Kokusai Electric, Keisei Electric

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

(Desperate) Takeover Bid in the Making

Grifols' founding families and Brookfield ask the Board for the necessary information to evaluate an offer for 100% of Grifols SA (GRF SM). The...

Jesus Rodriguez Aguilar

Another Debt Downgrade

​Moody's downgrades Grifols' rating due to high leverage and opaque governance. For risk-tolerant investors, the current low share price could...

Jesus Rodriguez Aguilar

Grifols S A (GRF/P SM) - Friday, Mar 22, 2024

Gotham City Research's short report on Grifols is seen as misguided, creating a buying opportunity for investors. Grifols is still viewed as a...

Value Investors Club (VIC)

Moody's downgrades Grifols' rating due to high leverage and opaque governance. For risk-tolerant investors, the current low share price could...