European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

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Asterion saves its takeover on <a href="https://www.smartkarma.com/entities/retelit-spa" target="_blank" data-smartkarma-citation="entities:33432:1" rel="noopener">Retelit SpA (LIT IM)</a>, overcoming the resistance of the second largest shareholder, the group Libyan telecommunications LPTIC (14%), due to:
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<ul>
<li>An improvement in the consideration from €2.85/share to €3/share, allowed to encourage the pace of acceptances, which until 15 September barely reached 10% of the capital. </li>
<li>A reduction in the threshold from from 66.67% to 50% of the share capital plus 1 share.</li>
</ul>
In case Asterion comes to hold directly and/or indirectly (via tender or market purchases) a stake at least equal to 66.67%, the offeror will pay, an additional consideration equal to €0.10/share tendered. The maximum consideration is now €3.1/share.
My initial expectations of positive revision of the terms of the offer have materialised. My TP was €3.04 (see <a href="https://www.smartkarma.com/insights/asterion-retelit-voluntary-offer-sweetening-expected" target="_blank" data-smartkarma-citation="insights:52435" rel="noopener">Asterion/Retelit: Voluntary Offer, Sweetening Expected</a>).
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The tender period will be re-opened for a further period of 5 trading days, for the sessions of 27 September until 1 October, both included, with payment on 8 October. If the legal requirements are fulfilled, Marbles will comply with the obligation to purchase (art. 108, par. 2 of the TUF) and/or with the obligation to purchase (art. 108, par. 1 of the TUF) and the right to purchase (art. 111 of the TUF), which will result in the delisting of Retelit.
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LPTIC, which owns 14%, and other shareholders could choose to sell their stakes, considering the position of control that Asterion will have. Once above 66.67%, it will be easier for the fund to delist Retelit. The market trusts Asterion will cross that threshold, as the gross spread is 0.32%. Deal done, recommendation is to tender.


Asterion saves its takeover on Retelit SpA (LIT IM), overcoming the resistance of the second largest shareholder, the group Libyan telecommunications LPTIC (14%), due to:


An improvement in the consideration from €2.85/share to €3/share, allowed to encourage the pace of acceptances, which until 15 September barely reached 10% of the capital. 
A reduction in the threshold from from 66.67% to 50% of the share capital plus 1 share.

In case Asterion comes to hold directly and/or indirectly (via tender or market purchases) a stake at least equal to 66.67%, the offeror will pay, an additional consideration equal to €0.10/share tendered. The maximum consideration is now €3.1/share.
My initial expectations of positive revision of the terms of the offer have materialised. My TP was €3.04 (see Asterion/Retelit: Voluntary Offer, Sweetening Expected).

The tender period will be re-opened for a further period of 5 trading days, for the sessions of 27 September until 1 October, both included, with payment on 8 October. If the legal requirements are fulfilled, Marbles will comply with the obligation to purchase (art. 108, par. 2 of the TUF) and/or with the obligation to purchase (art. 108, par. 1 of the TUF) and the right to purchase (art. 111 of the TUF), which will result in the delisting of Retelit.

LPTIC, which owns 14%, and other shareholders could choose to sell their stakes, considering the position of control that Asterion will have. Once above 66.67%, it will be easier for the fund to delist Retelit. The market trusts Asterion will cross that threshold, as the gross spread is 0.32%. Deal done, recommendation is to tender.

Asterion/Retelit: Sweetened Offer Means Transaction Will Go Ahead

On 31 May, Marbles S.r.l., a company owned by Asterion, launched a tender offer to acquire the remaining shares in <a href="https://www.smartkarma.com/entities/retelit-spa" target="_blank" rel="noopener">Retelit SpA (LIT IM)</a> it does not already own for approximately €333.5 mn. As per terms of transaction, Marbles S.r.l will acquire 117.041550 mn shares at €6.85/share.
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The remaining 28.7% stake in Retelit is hold by Fiber 4.0, a wholly owned subsidiary of Marbles S.r.l. Spa. The offer aims to acquire 100% of the share capital of Retelit and delist the company. There is minimum acceptance condition of at least 66.67%.
Several institutions are willing to subscribe for Marbles shares directly. These are the municipal pension managers of Michigan (United States) and Halifax (Canada), together with the Hamilton Lane Infrastructure Fund.
Upon announcement, shares of Retelit rose about 15% to €2.96, above the offer price. On the following days, shares have reached €3.02. The market expects an increase in the offer price.
The launch of the bid came came just ten days after Asterion Industrial Partners obtained AGM approval to directly designate three Board members representatives and propose three new independent ones. Additionally, Asterion supported that both the President and the CEO keep their positions.
Retelit closed on 3 June 4.9% above the offer price (with a decent trading volume over the last four sessions).
Regarding standalone valuation, my TP comes from:
<ul style="list-style-type: disc;">
<li>Multiple of past transactions: 10.5x EV/EBITDA, valuation is €2.95/share</li>
<li>Comparables: valuation is €3.07/share (blended average of median implied 10.96x EV/Fwd EBITDA and median implied 22.5x Fwd P/E).</li>
<li>On a DCF (using estimates from Capital IQ consensus, WACC 7.5% and 8x terminal EBITDA multiple), valuation is €3.1/share </li>
</ul>
By taking the average, my fair value is €3.04/share, 1.6% upside to the last closing price of €2.99 and 6.6% above the offer price.
Positive revision of the offer price is likely, in my view, as it happened in the case of Altice Europe ( <a href="https://www.smartkarma.com/insights/altice-next-private-takeover-announcement" target="_blank" rel="noopener">Altice - Next Private Takeover Announcement</a> and <a href="https://www.smartkarma.com/insights/altice-next-private-trading-above-terms" target="_blank" rel="noopener">Altice - Next Private: Trading Above Terms</a> ). I would rule out a major increase from the current offer price.

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On 31 May, Marbles S.r.l., a company owned by Asterion, launched a tender offer to acquire the remaining shares in Retelit SpA (LIT IM) it does not already own for approximately €333.5 mn. As per terms of transaction, Marbles S.r.l will acquire 117.041550 mn shares at €6.85/share.

The remaining 28.7% stake in Retelit is hold by Fiber 4.0, a wholly owned subsidiary of Marbles S.r.l. Spa. The offer aims to acquire 100% of the share capital of Retelit and delist the company. There is minimum acceptance condition of at least 66.67%.
Several institutions are willing to subscribe for Marbles shares directly. These are the municipal pension managers of Michigan (United States) and Halifax (Canada), together with the Hamilton Lane Infrastructure Fund.
Upon announcement, shares of Retelit rose about 15% to €2.96, above the offer price. On the following days, shares have reached €3.02. The market expects an increase in the offer price.
The launch of the bid came came just ten days after Asterion Industrial Partners obtained AGM approval to directly designate three Board members representatives and propose three new independent ones. Additionally, Asterion supported that both the President and the CEO keep their positions.
Retelit closed on 3 June 4.9% above the offer price (with a decent trading volume over the last four sessions).
Regarding standalone valuation, my TP comes from:

Multiple of past transactions: 10.5x EV/EBITDA, valuation is €2.95/share
Comparables: valuation is €3.07/share (blended average of median implied 10.96x EV/Fwd EBITDA and median implied 22.5x Fwd P/E).
On a DCF (using estimates from Capital IQ consensus, WACC 7.5% and 8x terminal EBITDA multiple), valuation is €3.1/share 

By taking the average, my fair value is €3.04/share, 1.6% upside to the last closing price of €2.99 and 6.6% above the offer price.
Positive revision of the offer price is likely, in my view, as it happened in the case of Altice Europe ( Altice - Next Private Takeover Announcement and Altice - Next Private: Trading Above Terms ). I would rule out a major increase from the current offer price.



Asterion/Retelit: Voluntary Offer, Sweetening Expected

Italy

Retelit S.p.A., through its subsidiaries, provides data services and infrastructure for the telecommunications market. The Company utilizes optical fiber networks to offer broadband and ultra-broadband data transmission services, the creation of private IP and ethernet networks, and the provision of internet connectivity.

Retelit SpA (LIT IM)

Asterion/Retelit: Sweetened Offer Means Transaction Will Go Ahead

TP bang-on. Improved consideration is 10.3x EV/Fwd EBITDA, 29.1x Fwd P/E. Market trusts Asterion will cross 66.67% threshold. Gross spread (to...

Jesus Rodriguez Aguilar

Asterion/Retelit: Voluntary Offer, Sweetening Expected

My est. of fair value is €3.04/share, 1.6% upside to the last closing price of €2.99 and 6.6% above the offer price. Likely sweetening of the offer...

Jesus Rodriguez Aguilar