Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>The <a href="https://www.smartkarma.com/entities/naspers-ltd" target="_blank" data-smartkarma-citation="entities:21085:1" rel="noopener">Naspers (NPN SJ)</a> / <a href="https://www.smartkarma.com/entities/prosus-nv" target="_blank" data-smartkarma-citation="entities:28104:1" rel="noopener">Prosus (PRX NA)</a> circularity was too complex. Lots of people hated it. It was actually easier than most thought, but optically was difficult to reconcile. </li>
<li>
<a href="https://www.smartkarma.com/entities/swire-pacific-ltd-cl-a" target="_blank" data-smartkarma-citation="entities:10433:1" rel="noopener">Swire Pacific (19 HK)</a> was a clear buy: there is no justification for assigning a similar discount for cash from the US Coke ops as you would to unlisted ops</li>
<li>A residual <a href="https://www.smartkarma.com/entities/nippon-telegraph-telephone-corporation" target="_blank" data-smartkarma-citation="entities:623:1" rel="noopener">NTT (9432 JP)</a> individual small-holder shareholding tenure reward does not get split 25:1 when the stock gets split 25:1. It doesn't mean much, but it's an interesting artefact. </li>
</ul>


The Naspers (NPN SJ) / Prosus (PRX NA) circularity was too complex. Lots of people hated it. It was actually easier than most thought, but optically was difficult to reconcile. 

Swire Pacific (19 HK) was a clear buy: there is no justification for assigning a similar discount for cash from the US Coke ops as you would to unlisted ops
A residual NTT (9432 JP) individual small-holder shareholding tenure reward does not get split 25:1 when the stock gets split 25:1. It doesn't mean much, but it's an interesting artefact. 


Last Week in Event SPACE: Naspers/Prosus, Swire Pacific, NTT, Aussie Tax-Loss Selling

European Event-Driven Analyst

Jesus Rodriguez Aguilar

<ul>
<li>Following the additional acceptance period and settlement, XXXLutz has increased its stake up to c.94.65% of <a href="https://www.smartkarma.com/entities/home24-se" target="_blank" data-smartkarma-citation="entities:36482:1" rel="noopener">Home24 (H24 GR)</a>.</li>
<li>The Bidders, together with XXXLutz KG, have entered into a delisting agreement with home24, at the same time they will launching a delisting offer, at the prior offer price, €7.5/share.</li>
<li>The offer price was fair in my view. Liquidity will become razor thin post offer and there will be no domination and P&amp;L transfer agreement. Tender regardless of  acquisition price.</li>
</ul>


Following the additional acceptance period and settlement, XXXLutz has increased its stake up to c.94.65% of Home24 (H24 GR).
The Bidders, together with XXXLutz KG, have entered into a delisting agreement with home24, at the same time they will launching a delisting offer, at the prior offer price, €7.5/share.
The offer price was fair in my view. Liquidity will become razor thin post offer and there will be no domination and P&amp;L transfer agreement. Tender regardless of  acquisition price.


XxxLutz/Home24: Final Chance to Abandon the Boat

<ul>
<li>The offer has ended. The bidding consortium has secured 92.67% of home24 shares (including capital increase and share purchases). Completion still remains subject to customary antitrust approvals.</li>
<li>Unsurprisingly, the shares are now trading at a 8.07% discount to the offer price. Delisting is looming and holdouts have not a sell-out right. </li>
<li>It is still puzzling to me why &gt;7% of shares have not been tendered. The bidders might make a delisting offer, but not necessarily at the offer price.</li>
</ul>


The offer has ended. The bidding consortium has secured 92.67% of home24 shares (including capital increase and share purchases). Completion still remains subject to customary antitrust approvals.
Unsurprisingly, the shares are now trading at a 8.07% discount to the offer price. Delisting is looming and holdouts have not a sell-out right. 
It is still puzzling to me why &gt;7% of shares have not been tendered. The bidders might make a delisting offer, but not necessarily at the offer price.


XXXLutz Consortium/​​Home24: Final Results and Delisting

<ul>
<li>XXXLutz consortium secures 80.94% of home24 shares. The Additional Acceptance Period runs until 28 December. More shares will be tendered and delisting will eventually take place in 2023, in my view.</li>
<li>My updated fair value estimate is €7.44/share (average of DCF and comparables, as per the tables below), just 0.8% below the offer price, hence my TP remains unchanged at €7.50.</li>
<li>Gross spread is 0.93%. The risk of being stranded with a delisted stock encourages tendering at €7.50.</li>
</ul>


XXXLutz consortium secures 80.94% of home24 shares. The Additional Acceptance Period runs until 28 December. More shares will be tendered and delisting will eventually take place in 2023, in my view.
My updated fair value estimate is €7.44/share (average of DCF and comparables, as per the tables below), just 0.8% below the offer price, hence my TP remains unchanged at €7.50.
Gross spread is 0.93%. The risk of being stranded with a delisted stock encourages tendering at €7.50.


XXXLutz Consortium/​Home24: Additional Acceptance Period

<ul>
<li>An XXXLutz-led consortium offers €7.50/share in cash, 124% premium, c. 29.6x EV/Fwd NTM EBITDA and 1.4x P/NTM BV. With already 68.7% irrevocable undertakings secured, this looks a done deal.</li>
<li>FY2021 ROIC was -12%, home24 destroyed value as it grew; some willing buyers attended the call to steady the ship. Considering prospects, the offer looks fair (my TP is €7.85).</li>
<li>Gross spread is 0.54%, and the estimated annual return is 3.01% assuming settlement by 5 January. I would accept offer/set up a position in case of share price weakness.</li>
</ul>


An XXXLutz-led consortium offers €7.50/share in cash, 124% premium, c. 29.6x EV/Fwd NTM EBITDA and 1.4x P/NTM BV. With already 68.7% irrevocable undertakings secured, this looks a done deal.
FY2021 ROIC was -12%, home24 destroyed value as it grew; some willing buyers attended the call to steady the ship. Considering prospects, the offer looks fair (my TP is €7.85).
Gross spread is 0.54%, and the estimated annual return is 3.01% assuming settlement by 5 January. I would accept offer/set up a position in case of share price weakness.


XXXLutz Consortium/Home24: Rescue Takeover

Germany

home24 SE retails furniture products. The Company offers sofas, couches, lamps, tables, chairs, office cabinets, showcases, highboards, and accessories. home24 serves customers in Germany.

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Home24 (H24 GR)

Last Week in Event SPACE: Naspers/Prosus, Swire Pacific, NTT, Aussie Tax-Loss Selling

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

XxxLutz/Home24: Final Chance to Abandon the Boat

XXXLutz says that the Delisting Offer provides shareholders with an immediate and liquidity-independent divestment opportunity at a very attractive...

Jesus Rodriguez Aguilar

XXXLutz Consortium/Home24: Final Results and Delisting

The offer has ended. The bidding consortium has secured 92.67% of home24 shares (including capital increase and share purchases). Completion still...

Jesus Rodriguez Aguilar

XXXLutz Consortium/Home24: Additional Acceptance Period

XXXLutz consortium secures 80.94% of home24 shares. The Additional Acceptance Period runs until 28 December. I anticipate that more shares will be...

Jesus Rodriguez Aguilar

XXXLutz Consortium/Home24: Rescue Takeover

home24 has destroyed value as it has increased its revenues, hence the downhill share price. home24 put itself up for sale and some willing buyers...

Jesus Rodriguez Aguilar

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Last Week in Event SPACE: Naspers/Prosus, Swire Pacific, NTT, Aussie Tax-Loss Selling

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

XxxLutz/Home24: Final Chance to Abandon the Boat

XXXLutz says that the Delisting Offer provides shareholders with an immediate and liquidity-independent divestment opportunity at a very attractive...

Jesus Rodriguez Aguilar

XXXLutz Consortium/​​Home24: Final Results and Delisting

The offer has ended. The bidding consortium has secured 92.67% of home24 shares (including capital increase and share purchases). Completion still...

Jesus Rodriguez Aguilar

XXXLutz Consortium/​Home24: Additional Acceptance Period

XXXLutz consortium secures 80.94% of home24 shares. The Additional Acceptance Period runs until 28 December. I anticipate that more shares will be...

Jesus Rodriguez Aguilar

XXXLutz Consortium/Home24: Rescue Takeover

home24 has destroyed value as it has increased its revenues, hence the downhill share price. home24 put itself up for sale and some willing buyers...

Jesus Rodriguez Aguilar

XXXLutz Consortium/Home24: Final Results and Delisting

XXXLutz Consortium/Home24: Additional Acceptance Period