European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>Ganz Mavag, a public/private consortium, requests authorisation for its €5/share offer for 100% of <a href="https://www.smartkarma.com/entities/talgo-sa" target="_blank" data-smartkarma-citation="entities:21301:1" rel="noopener">Talgo SA (TLGO SM)</a>. It needs approvals from Spain and seven other EMEA regulators.</li>
<li>Yesterday's close remains similar to the announcement date (7 March), gross spread of 11.3%, indicating uncertainty regarding timeline and development. The market is pricing a 48% probability of deal completion.</li>
<li>The Spanish Government will delay the authorization process. Vs. comparables and considering uncertainties regarding backlog execution, investing in the company seems somewhat risky. The risk/reward ratio is not particularly attractive.</li>
</ul>


Ganz Mavag, a public/private consortium, requests authorisation for its €5/share offer for 100% of Talgo SA (TLGO SM). It needs approvals from Spain and seven other EMEA regulators.
Yesterday's close remains similar to the announcement date (7 March), gross spread of 11.3%, indicating uncertainty regarding timeline and development. The market is pricing a 48% probability of deal completion.
The Spanish Government will delay the authorization process. Vs. comparables and considering uncertainties regarding backlog execution, investing in the company seems somewhat risky. The risk/reward ratio is not particularly attractive.


Ganz-Mavag/Talgo: Request for Offer Authorisation

<ul>
<li>According to Expansion, the Hungarian Ganz-MaVag Euroe Zrt consortium is giving final touches to the offer for <a href="https://www.smartkarma.com/entities/talgo-sa" target="_blank" data-smartkarma-citation="entities:21301:1" rel="noopener">Talgo SA (TLGO SM)</a> after obtaining verbal approval from the lenders.</li>
<li>The Minister of Transport assured that the Spanish Government will do everything possible to prevent the consortium from taking over Talgo due to hidden interests of the Viktor Órban Government.</li>
<li>However, the Government would need to justify its decision thoroughly to avoid potential legal challenges. For now, I would remain in the sidelines due to uncertainties about development and timing.</li>
</ul>


According to Expansion, the Hungarian Ganz-MaVag Euroe Zrt consortium is giving final touches to the offer for Talgo SA (TLGO SM) after obtaining verbal approval from the lenders.
The Minister of Transport assured that the Spanish Government will do everything possible to prevent the consortium from taking over Talgo due to hidden interests of the Viktor Órban Government.
However, the Government would need to justify its decision thoroughly to avoid potential legal challenges. For now, I would remain in the sidelines due to uncertainties about development and timing.


Magyar Vagon/​Talgo: Spanish Government Steps In

<ul>
<li>Trading in the shares of Spanish rolling stock manufacturer <a href="https://www.smartkarma.com/entities/talgo-sa" target="_blank" data-smartkarma-citation="entities:21301:1" rel="noopener">Talgo SA (TLGO SM)</a> is suspended pending a possible €5/share takeover offer from Hungarian group Magyar Vagon.</li>
<li>Stock market performance of Talgo has been lacklustre. Now, at €4.79, the shares are trading above comparables, in line with my fair value estimate (DCF-based) of €4.76/share. </li>
<li>Top investors (&gt;45%) seem very willing to cash in and I would imagine that Magyar Vagon has had the time to seek green light assurances from the Spanish Government. Long.
</li>
</ul>


Trading in the shares of Spanish rolling stock manufacturer Talgo SA (TLGO SM) is suspended pending a possible €5/share takeover offer from Hungarian group Magyar Vagon.
Stock market performance of Talgo has been lacklustre. Now, at €4.79, the shares are trading above comparables, in line with my fair value estimate (DCF-based) of €4.76/share. 
Top investors (&gt;45%) seem very willing to cash in and I would imagine that Magyar Vagon has had the time to seek green light assurances from the Spanish Government. Long.



Magyar Vagon/Talgo: Looming Takeover Offer

<ul>
<li>Rolling stock manufacturer <a href="https://www.smartkarma.com/entities/talgo-sa" target="_blank" data-smartkarma-citation="entities:21301:1" rel="noopener">Talgo SA (TLGO SM)</a>  confirms the interest of a Hungarian investor in launching a takeover bid at €5/share, 28% premium, 10.5 EV/24e EBITDA.</li>
<li>The implied market cap is €617 million and the implied EV is €837 million. My fair value estimate (DCF-based) is €4.76/share, so the potential offer price seems adequate.</li>
<li>The 17 November closing share price implies a 44% probability of an offer (12% gross spread, 12% gain since disclosure), which indicates that the outcome seems uncertain.</li>
</ul>


Rolling stock manufacturer Talgo SA (TLGO SM)  confirms the interest of a Hungarian investor in launching a takeover bid at €5/share, 28% premium, 10.5 EV/24e EBITDA.
The implied market cap is €617 million and the implied EV is €837 million. My fair value estimate (DCF-based) is €4.76/share, so the potential offer price seems adequate.
The 17 November closing share price implies a 44% probability of an offer (12% gross spread, 12% gain since disclosure), which indicates that the outcome seems uncertain.


Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>Murakami to tender stake in <a href="https://www.smartkarma.com/entities/jsr-corp" target="_blank" data-smartkarma-citation="entities:17620:1" rel="noopener">JSR Corp (4185 JP)</a>? Maybe the "double arb": i.e. short on swap, long on cash, will tender the cash, remain short the back end.</li>
<li>
<a href="https://www.smartkarma.com/entities/austal-ltd" target="_blank" data-smartkarma-citation="entities:14420:1" rel="noopener">Austal Ltd (ASB AU)</a> rejected (for now) <a href="https://www.smartkarma.com/entities/hanwha-ocean-co-ltd" target="_blank" data-smartkarma-citation="entities:12531:1" rel="noopener">Hanwha Ocean (042660 KS)</a>'s bid based on regulatory concerns.  Hanwha reckons these should not be an issue.</li>
<li>If you can tolerate owning the mobile biz, buy <a href="https://www.smartkarma.com/entities/rakuten-group-inc" target="_blank" data-smartkarma-citation="entities:31:1" rel="noopener">Rakuten (4755 JP)</a> on dips. If not, avoid Rakuten Group and Rakuten Bank short-term; buy Rakuten Bank on larger dips.</li>
</ul>


Murakami to tender stake in JSR Corp (4185 JP)? Maybe the "double arb": i.e. short on swap, long on cash, will tender the cash, remain short the back end.

Austal Ltd (ASB AU) rejected (for now) Hanwha Ocean (042660 KS)'s bid based on regulatory concerns.  Hanwha reckons these should not be an issue.
If you can tolerate owning the mobile biz, buy Rakuten (4755 JP) on dips. If not, avoid Rakuten Group and Rakuten Bank short-term; buy Rakuten Bank on larger dips.


Last Week in Event SPACE: JSR, Austal, Rakuten, Hyundai Home Shopping, Hanmi Science

Spain

Talgo S.A. is a Spain-based specialized rolling stock engineering company focused on the designing, manufacturing and servicing of lightweight trains.

Talgo SA (TLGO SM)

Ganz-Mavag/Talgo: Request for Offer Authorisation

Ganz Mavag seeks approval for €5/share offer for Talgo SA. Market uncertainty reflected in spread. Spanish Government will delay FDI authorisation.

Jesus Rodriguez Aguilar

Magyar Vagon/Talgo: Spanish Government Steps In

Hungarian consortium finalizes the presentation of an offer for Talgo SA. Spanish Government wary of takeover due to potential hidden interests...

Jesus Rodriguez Aguilar

Magyar Vagon/Talgo: Looming Takeover Offer

Trading in shares of Spanish rolling stock manufacturer Talgo SA is suspended pending a possible €5/share takeover offer from Hungarian group...

Jesus Rodriguez Aguilar

Playing with Trains

Talgo is in play. A Hungarian investor interested in acquiring Talgo SA at €5/share, a 28% premium. The potential offer price seems adequate, but...

Jesus Rodriguez Aguilar

Last Week in Event SPACE: JSR, Austal, Rakuten, Hyundai Home Shopping, Hanmi Science

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

Ganz-Mavag/Talgo: Request for Offer Authorisation

​Ganz Mavag seeks approval for €5/share offer for Talgo SA. Market uncertainty reflected in spread. Spanish Government will delay FDI authorisation.

Jesus Rodriguez Aguilar

Magyar Vagon/​Talgo: Spanish Government Steps In

​Hungarian consortium finalizes the presentation of an offer for Talgo SA. Spanish Government wary of takeover due to potential hidden interests...

Jesus Rodriguez Aguilar

Magyar Vagon/Talgo: Looming Takeover Offer

​Trading in shares of Spanish rolling stock manufacturer Talgo SA is suspended pending a possible €5/share takeover offer from Hungarian group...

Jesus Rodriguez Aguilar

Playing with Trains

Talgo is in play. A ​Hungarian investor interested in acquiring Talgo SA at €5/share, a 28% premium. The potential offer price seems adequate, but...

Jesus Rodriguez Aguilar

Last Week in Event SPACE: JSR, Austal, Rakuten, Hyundai Home Shopping, Hanmi Science

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

Ganz Mavag seeks approval for €5/share offer for Talgo SA. Market uncertainty reflected in spread. Spanish Government will delay FDI authorisation.

Magyar Vagon/Talgo: Spanish Government Steps In

Hungarian consortium finalizes the presentation of an offer for Talgo SA. Spanish Government wary of takeover due to potential hidden interests...

Trading in shares of Spanish rolling stock manufacturer Talgo SA is suspended pending a possible €5/share takeover offer from Hungarian group...

Talgo is in play. A Hungarian investor interested in acquiring Talgo SA at €5/share, a 28% premium. The potential offer price seems adequate, but...