European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>Discounts to NAV of covered holdcos didn't follow a clear trend during February 2025. Discounts to NAV: C.F.Alba, 14.1% (vs. 12.9% as of 31 January 2025); GBL, 38.7% (vs. 40%);</li>
<li>Heineken Holding, 13% (vs. 13.2%); Industrivärden C, 5.1% (vs. 3.0%); Investor B, 2.3% (vs. 4.5%); Porsche Automobile Holding, 38.1% (vs. 36%). Rio DLC spread tightened to 17% (vs. 20.3%).</li>
<li>What seems interesting (unchanged views): Porsche SE vs. listed assets and the Rio DLC (long RIO LN/short RIO AU).</li>
</ul>


Discounts to NAV of covered holdcos didn't follow a clear trend during February 2025. Discounts to NAV: C.F.Alba, 14.1% (vs. 12.9% as of 31 January 2025); GBL, 38.7% (vs. 40%);
Heineken Holding, 13% (vs. 13.2%); Industrivärden C, 5.1% (vs. 3.0%); Investor B, 2.3% (vs. 4.5%); Porsche Automobile Holding, 38.1% (vs. 36%). Rio DLC spread tightened to 17% (vs. 20.3%).
What seems interesting (unchanged views): Porsche SE vs. listed assets and the Rio DLC (long RIO LN/short RIO AU).


Selected European HoldCos and DLC: February 2025 Report

<ul>
<li>Naturgy plans a €2.5 billion share buyback at €26.5 per share, thus increasing free float and liquidity, potentially aiding index inclusion and attracting passive ETF investors.</li>
<li>The 2025-2027 strategic plan targets €6.4 billion investments, focusing on networks and renewables while maintaining EBITDA at €5.3 billion and net profit at €1.9 billion.</li>
<li>A rising dividend from €1.6 to €1.9/share by 2027, with a 100% payout ratio, provides a 7.4% 27e yield, supported by a 2.3x net debt/EBITDA, ensuring sustainability.</li>
</ul>


Naturgy plans a €2.5 billion share buyback at €26.5 per share, thus increasing free float and liquidity, potentially aiding index inclusion and attracting passive ETF investors.
The 2025-2027 strategic plan targets €6.4 billion investments, focusing on networks and renewables while maintaining EBITDA at €5.3 billion and net profit at €1.9 billion.
A rising dividend from €1.6 to €1.9/share by 2027, with a 100% payout ratio, provides a 7.4% 27e yield, supported by a 2.3x net debt/EBITDA, ensuring sustainability.


Strategic Reshuffle, Shareholder Adjustments, and Investment Outlook

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>You could label <a href="https://www.smartkarma.com/entities/kyocera-corp" target="_blank" data-smartkarma-citation="entities:753:1" rel="noopener">Kyocera Corp (6971 JP)</a>"BULLISH" because the stock goes up rather than down; but you could easily label this BEARISH because the prospects aren't exciting.</li>
<li>
<a href="https://www.smartkarma.com/entities/wh-group-ltd" target="_blank" data-smartkarma-citation="entities:13200:1" rel="noopener">WH Group (288 HK)</a>spins off <a href="https://www.smartkarma.com/entities/smithfield-foods-inc" target="_blank" data-smartkarma-citation="entities:44251:1" rel="noopener">Smithfield Foods (SFD US)</a> - below the prior expected price range.  Pricing looks full here.</li>
<li>As <a href="https://www.smartkarma.com/entities/china-national-building-ma-h" target="_blank" data-smartkarma-citation="entities:184:1" rel="noopener">China National Building Material (3323 HK)</a>'s Partial Offer heads towards the pointy end, do you buy, and/or borrow, and tender; short outright; or short tender?</li>
</ul>


You could label Kyocera Corp (6971 JP)"BULLISH" because the stock goes up rather than down; but you could easily label this BEARISH because the prospects aren't exciting.

WH Group (288 HK)spins off Smithfield Foods (SFD US) - below the prior expected price range.  Pricing looks full here.
As China National Building Material (3323 HK)'s Partial Offer heads towards the pointy end, do you buy, and/or borrow, and tender; short outright; or short tender?


Last Week in Event SPACE: Kyocera, WH Group/Smithfield, CNBM, Japan Eyewear, Core Concept Tech

<ul>
<li>Sidenor’s non-binding offer: Raised to €4.8 per share for 29.8% of Talgo, with a fixed €4.15 and €0.65 contingent on financial targets in 2027 and 2028.</li>
<li>Competing interest from Pesa and Jupiter Wagons: Polish and Indian bidders are considering offers, while SEPI explores involvement to maintain Spanish control over Talgo.</li>
<li>Uncertainty persists: Regulatory approvals, financial conditions, and competing bids complicate Talgo’s ownership future, with binding offers due by February 14, 2025.</li>
</ul>


Sidenor’s non-binding offer: Raised to €4.8 per share for 29.8% of Talgo, with a fixed €4.15 and €0.65 contingent on financial targets in 2027 and 2028.
Competing interest from Pesa and Jupiter Wagons: Polish and Indian bidders are considering offers, while SEPI explores involvement to maintain Spanish control over Talgo.
Uncertainty persists: Regulatory approvals, financial conditions, and competing bids complicate Talgo’s ownership future, with binding offers due by February 14, 2025.


Talgo Acquisition: Sidenor’s Bid and Competitive Landscape

<ul>
<li>Diplomatic tensions hinder acquisition: Algeria opposes Taqa’s takeover of Naturgy due to geopolitical conflicts with the UAE, complicating Spain’s energy security and disrupting acquisition negotiations.</li>
<li>Corporate governance challenges: Naturgy faces board restructuring, with five seats up for renewal and shareholder disputes over representation, potentially impacting governance stability and strategic decision-making.</li>
<li>Despite acquisition uncertainties, Naturgy is expected to report solid 2024 financial results and unveil a strategic plan focusing on decarbonization, diversification, and operational efficiency in early 2025.</li>
</ul>


Diplomatic tensions hinder acquisition: Algeria opposes Taqa’s takeover of Naturgy due to geopolitical conflicts with the UAE, complicating Spain’s energy security and disrupting acquisition negotiations.
Corporate governance challenges: Naturgy faces board restructuring, with five seats up for renewal and shareholder disputes over representation, potentially impacting governance stability and strategic decision-making.
Despite acquisition uncertainties, Naturgy is expected to report solid 2024 financial results and unveil a strategic plan focusing on decarbonization, diversification, and operational efficiency in early 2025.


Naturgy Acquisition Talks: Diplomatic and Financial Hurdles Persist

Spain

Naturgy Energy Group S.A. distributes natural gas. The Company operates gas storage facilities, as well as owns and operates a fiber optic backbone telecommunications networks. Naturgy Energy Group also markets energy management products, household gas appliances, and installs gas heating systems. Naturgy Energy serves clients worldwide.

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Naturgy Energy Group SA (NTGY SM)

Selected European HoldCos and DLC: February 2025 Report

February 2025 saw varying discounts to NAV for covered holdcos, with some tightening and others widening, highlighting opportunities in Porsche SE...

Jesus Rodriguez Aguilar

Strategic Reshuffle, Shareholder Adjustments, and Investment Outlook

Naturgy plans €2.5 billion share buyback at €26.5/share, aims for €6.4 billion investments in networks and renewables by 2027, with rising...

Jesus Rodriguez Aguilar

Last Week in Event SPACE: Kyocera, WH Group/Smithfield, CNBM, Japan Eyewear, Core Concept Tech

It’s Sunday! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed during the...

David Blennerhassett

Talgo Acquisition: Sidenor’s Bid and Competitive Landscape

Sidenor raises offer for 29.8% of Talgo, but faces competition from Pesa and Jupiter Wagons. Uncertainty looms over ownership future with...

Jesus Rodriguez Aguilar

Naturgy Acquisition Talks: Diplomatic and Financial Hurdles Persist

Algeria's opposition to Taqa's takeover of Naturgy complicates Spain's energy security, while Naturgy faces corporate governance challenges and...

Jesus Rodriguez Aguilar

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52-week Range

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Selected European HoldCos and DLC: February 2025 Report

​February 2025 saw varying discounts to NAV for covered holdcos, with some tightening and others widening, highlighting opportunities in Porsche SE...

Jesus Rodriguez Aguilar

Strategic Reshuffle, Shareholder Adjustments, and Investment Outlook

​Naturgy plans €2.5 billion share buyback at €26.5/share, aims for €6.4 billion investments in networks and renewables by 2027, with rising...

Jesus Rodriguez Aguilar

Last Week in Event SPACE: Kyocera, WH Group/Smithfield, CNBM, Japan Eyewear, Core Concept Tech

It’s Sunday! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed during the...

David Blennerhassett

Talgo Acquisition: Sidenor’s Bid and Competitive Landscape

​Sidenor raises offer for 29.8% of Talgo, but faces competition from Pesa and Jupiter Wagons. Uncertainty looms over ownership future with...

Jesus Rodriguez Aguilar

Naturgy Acquisition Talks: Diplomatic and Financial Hurdles Persist

​Algeria's opposition to Taqa's takeover of Naturgy complicates Spain's energy security, while Naturgy faces corporate governance challenges and...

Jesus Rodriguez Aguilar

February 2025 saw varying discounts to NAV for covered holdcos, with some tightening and others widening, highlighting opportunities in Porsche SE...

Naturgy plans €2.5 billion share buyback at €26.5/share, aims for €6.4 billion investments in networks and renewables by 2027, with rising...

Sidenor raises offer for 29.8% of Talgo, but faces competition from Pesa and Jupiter Wagons. Uncertainty looms over ownership future with...

Algeria's opposition to Taqa's takeover of Naturgy complicates Spain's energy security, while Naturgy faces corporate governance challenges and...