European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>Frasers has launched a €38/share voluntary takeover offer for Hugo Boss, at 0.9x NTM sales and 5.1x EBITDA, among the lowest valuations seen for a premium apparel brand.</li>
<li>The absence of a minimum acceptance threshold suggests Frasers is pursuing a gradual increase in ownership rather than an all-or-nothing acquisition, drawing parallels with ACS's eventual acquisition of Hochtief control.</li>
<li>Hugo Boss shares traded 5.9% above the offer price following the announcement, indicating investors expect either an improved offer or a longer path towards control at a higher valuation.</li>
</ul>


Frasers has launched a €38/share voluntary takeover offer for Hugo Boss, at 0.9x NTM sales and 5.1x EBITDA, among the lowest valuations seen for a premium apparel brand.
The absence of a minimum acceptance threshold suggests Frasers is pursuing a gradual increase in ownership rather than an all-or-nothing acquisition, drawing parallels with ACS's eventual acquisition of Hochtief control.
Hugo Boss shares traded 5.9% above the offer price following the announcement, indicating investors expect either an improved offer or a longer path towards control at a higher valuation.


Frasers/Hugo Boss: Lowball Opening Bid or First Step Towards Control?

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>Nobody "named" having &gt;5.0% in <a href="https://www.smartkarma.com/entities/outsourcing-inc" target="_blank" data-smartkarma-citation="entities:7431:1" rel="noopener">Outsourcing (2427 JP)</a>; no public noise, the stock down; people won't be fighting for a bump unless the delay and impairment are truly meaningless.</li>
<li>Stay long <a href="https://www.smartkarma.com/entities/mgm-china-holdings-ltd" target="_blank" data-smartkarma-citation="entities:472:1" rel="noopener">MGM China Holdings (2282 HK)</a> as its FY23 top line surpasses pre-Covid levels.</li>
<li>Investors and risk arbitrageurs who are worried about the potential loss of the case to RF SUNY should simply avoid, or sell then avoid <a href="https://www.smartkarma.com/entities/jsr-corp" target="_blank" data-smartkarma-citation="entities:17620:1" rel="noopener">JSR Corp (4185 JP)</a> shares.</li>
</ul>


Nobody "named" having &gt;5.0% in Outsourcing (2427 JP); no public noise, the stock down; people won't be fighting for a bump unless the delay and impairment are truly meaningless.
Stay long MGM China Holdings (2282 HK) as its FY23 top line surpasses pre-Covid levels.
Investors and risk arbitrageurs who are worried about the potential loss of the case to RF SUNY should simply avoid, or sell then avoid JSR Corp (4185 JP) shares.


Last Week in Event SPACE: Outsourcing Ltd, MGM China, JSR Corp, Dissentient Blues

<ul>
<li>The Della Valles and LVMH-backed L Catterton announced an agreement to launch a voluntary tender offer to buy 36% of Italian luxury group <a href="https://www.smartkarma.com/entities/tod-s-spa" target="_blank" data-smartkarma-citation="entities:21231:1" rel="noopener">Tod's SpA (TOD IM)</a> at €43/share to take it private.</li>
<li>In spite of the 31% premium to the 3-month VWAP, and the loss of brand equity by Tod's the offer seems cheap on a multiples basis, considering turnaround potential.</li>
<li>Considering a 95% squeeze-out threshold, 80.4% of the float must tender, which is high. A sweetening may be needed, although the offeror threatens with a merger with itself to delist.</li>
</ul>


The Della Valles and LVMH-backed L Catterton announced an agreement to launch a voluntary tender offer to buy 36% of Italian luxury group Tod's SpA (TOD IM) at €43/share to take it private.
In spite of the 31% premium to the 3-month VWAP, and the loss of brand equity by Tod's the offer seems cheap on a multiples basis, considering turnaround potential.
Considering a 95% squeeze-out threshold, 80.4% of the float must tender, which is high. A sweetening may be needed, although the offeror threatens with a merger with itself to delist.


Insight Provider, CrossASEAN Research

Nicolas Van Broekhoven

Insight Provider

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Equity Bottom-Up

<ul>
<li>Tod's founder Diego Della Valle is undoubtedly frustrated his bid to privatize Tod's at 40 EUR failed in 4Q22</li>
<li>It was the ideal time to privatize in order to maximize value for his family before selling to LVMH, the most logical buyer since 2017</li>
<li>Our conviction that Tod's ends up in the LVMH stable of brands is stronger than ever, an exit offer of 60 EUR per share would be a reasonable assumption</li>
</ul>


Tod's founder Diego Della Valle is undoubtedly frustrated his bid to privatize Tod's at 40 EUR failed in 4Q22
It was the ideal time to privatize in order to maximize value for his family before selling to LVMH, the most logical buyer since 2017
Our conviction that Tod's ends up in the LVMH stable of brands is stronger than ever, an exit offer of 60 EUR per share would be a reasonable assumption


Tod's: Failed Privatization Provides Red Carpet for LVMH Bid

<ul>
<li>Borsa Italiana reported a take-up in bid for Tod's of c. 48.91%. DeVa Finance and (concerted) LVMH would have controlled 86.95%, below the 90% minimum acceptance condition and pulled out.</li>
<li>The offer price seemed cheap on any measure (the shares traded above it since the offer period kicked off). A 20% share price drop means it looks good value now.</li>
<li>If the Della Valles merged Tod's with Deva Finance, they would offer c. €37/share. Either way, it should pay off to set up a long position in the stock now.</li>
</ul>


Borsa Italiana reported a take-up in bid for Tod's of c. 48.91%. DeVa Finance and (concerted) LVMH would have controlled 86.95%, below the 90% minimum acceptance condition and pulled out.
The offer price seemed cheap on any measure (the shares traded above it since the offer period kicked off). A 20% share price drop means it looks good value now.
If the Della Valles merged Tod's with Deva Finance, they would offer c. €37/share. Either way, it should pay off to set up a long position in the stock now.


Italy

Tod's S.p.A. is an Italian luxury fashion company that creates, produces, and distributes high-quality shoes, leather goods, accessories, and apparel. The company offers its products through directly operated stores, e-commerce channels, franchised retail outlets, and selected independent multi-brand stores under brands like TOD'S, HOGAN, FAY, and ROGER VIVIER. Tod's was founded in 1920 and is headquartered in Sant'Elpidio a Mare, Italy.

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Tod's (TOD IM)

Frasers/Hugo Boss: Lowball Opening Bid or First Step Towards Control?

Frasers' bid for Hugo Boss raises a broader question than whether €38/share is fair value. The structure of the offer may matter more than the...

Jesus Rodriguez Aguilar

Last Week in Event SPACE: Outsourcing Ltd, MGM China, JSR Corp, Dissentient Blues

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

Second Time Around

The Della Valles and LVMH-backed L Catterton announced an agreement to launch a voluntary tender offer to buy 36% of Italian luxury group Tod's at...

Jesus Rodriguez Aguilar

Tod's: Failed Privatization Provides Red Carpet for LVMH Bid

Diego Della Valle failed to privatize Tod's in 4Q22. His failed bid now opens the way for LVMH to finally take control of the brand and give it the...

Nicolas Van Broekhoven

Lowball Offer Fell Through

In my previous insight, I noticed that the shares were trading above the offer and a sweetening may be needed: I thought that the offer price...

Jesus Rodriguez Aguilar

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