European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<p><a href="https://www.smartkarma.com/entities/royal-dutch-shell-plc-48d2d58c-023d-485f-887d-f13ca5f049f6" target="_blank" data-smartkarma-citation="entities:25197:1" rel="noopener">Royal Dutch Shell (RDSA NA)</a> retains <strong>two main listings</strong> in both London and Amsterdam, both are also traded at the NYSE as ADR:</p>
<ul>
<li>RDSA NA/RDSA LN, more liquid in Amsterdam
<ul>
<li>A shares, converted from Royal Dutch Petroleum, subject to Dutch withholding tax (15%).</li>
<li>Primarily listed in Amsterdam, with a secondary listing in London. </li>
</ul>
</li>
<li>RDSB NA/RDSB LN more liquid in London.
<ul>
<li>B shares, converted from Shell Transport &amp; Trading.</li>
<li>There is no Dutch withholding tax on dividends paid on Royal Dutch Shell Class B ordinary shares or Class B ADSs provided that such dividends are paid on the Dividend Access Share pursuant to the Dividend Access Mechanism.</li>
</ul>
</li>
</ul>
<p>“B” shares trade in New York at a discount of <strong>approximately 5%</strong> with respect to the “A” shares.</p>
<ul>
<li>
<p>The reason is the effect of Dutch withholding taxes and the tax arrangements, which also create complexity for share buybacks, which could make up a larger proportion of distributions in the future.</p>
</li>
</ul>
<p>Shell has acknowledged over the last years that it might like to combine both  shares, should tax treatments allow it.</p>
<ul>
<li>Oil majors are building renewables/low carbon businesses. In this scenario, they could part-list the pure play, retaining the operational synergies with the wider group but crystallising valuation, which would allow accessing new capital pools and providing investors with greater optionality.</li>
</ul>
<p>RDSB ADR is trading at a 5% discount to RDSA ADR, well above the 10-year average, which is a 2% premium to the B shares. I regard that discount level as attractive.</p>
<p>Trade: <strong>LONG RDSB ADR/SHORT RDSA ADR</strong>. Target: 2% premium.</p>

Royal Dutch Shell (RDSA NA) retains two main listings in both London and Amsterdam, both are also traded at the NYSE as ADR:

RDSA NA/RDSA LN, more liquid in Amsterdam

A shares, converted from Royal Dutch Petroleum, subject to Dutch withholding tax (15%).
Primarily listed in Amsterdam, with a secondary listing in London. 


RDSB NA/RDSB LN more liquid in London.

B shares, converted from Shell Transport &amp; Trading.
There is no Dutch withholding tax on dividends paid on Royal Dutch Shell Class B ordinary shares or Class B ADSs provided that such dividends are paid on the Dividend Access Share pursuant to the Dividend Access Mechanism.



“B” shares trade in New York at a discount of approximately 5% with respect to the “A” shares.


The reason is the effect of Dutch withholding taxes and the tax arrangements, which also create complexity for share buybacks, which could make up a larger proportion of distributions in the future.


Shell has acknowledged over the last years that it might like to combine both  shares, should tax treatments allow it.

Oil majors are building renewables/low carbon businesses. In this scenario, they could part-list the pure play, retaining the operational synergies with the wider group but crystallising valuation, which would allow accessing new capital pools and providing investors with greater optionality.

RDSB ADR is trading at a 5% discount to RDSA ADR, well above the 10-year average, which is a 2% premium to the B shares. I regard that discount level as attractive.
Trade: LONG RDSB ADR/SHORT RDSA ADR. Target: 2% premium.

Unilever on the Verge of Unification, So... What About Royal Dutch Shell?

<div>
<p>With this report, I continue the monthly series on some of the main European holding companies that I deem interesting to long/short clients.</p>
</div>
<div>
<p>The discounts to NAV of Industrivärden and Kinnevik have considerably tightened. It is time to unwind them, and wait for the discounts to widen before setting up the trades again.</p>
</div>
<div>
<p>The most compelling situations in this report are GBL and Investor AB. The spread in Unilever is less than okay, but safe. It should close in a month as a result of the share unification.</p>
</div>


With this report, I continue the monthly series on some of the main European holding companies that I deem interesting to long/short clients.


The discounts to NAV of Industrivärden and Kinnevik have considerably tightened. It is time to unwind them, and wait for the discounts to widen before setting up the trades again.


The most compelling situations in this report are GBL and Investor AB. The spread in Unilever is less than okay, but safe. It should close in a month as a result of the share unification.


Selected European Holdcos and DLCs: October Report

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

<p>On 11 June, Unilever announced that it was looking to unify its group legal structure under a single parent company, <a href="https://www.smartkarma.com/entities/unilever-plc" target="_blank" data-smartkarma-citation="entities:22197:1" rel="noopener">Unilever PLC (ULVR LN)</a>, "creating a simpler company with greater strategic flexibility, that is better positioned for future success".</p><p>The Dutch shareholders approved the unification on 21 September with 99.39% of the shares voted in favour, while the UK shareholders approved the proposal on 12 October with over 99% of the shares voted in favour.</p><p>There is still one potential hurdle to the unification in the Departure Tax (GroenLinks initiative bill) being proposed by the GreenLeft Party in the Netherlands that could cost Unilever up to €11bn if it left the Netherlands.</p><p>If the unification does go through, there will be an impact of passive fund activity on <a href="https://www.smartkarma.com/entities/unilever-nv" target="_blank" data-smartkarma-citation="entities:21141:1" rel="noopener">Unilever NV (UNA NA)</a>, but the bigger impact will be on <a href="https://www.smartkarma.com/entities/unilever-plc" target="_blank" data-smartkarma-citation="entities:22197:1" rel="noopener">Unilever PLC (ULVR LN)</a>. We estimate the net impact of the unification will see around US$3bn of passive money flow into the stock.</p><p>In this Insight, we take a look at some of the details around the unification before jumping into the impact on the stocks and the possible spread between the two lines prior to unification.</p>

On 11 June, Unilever announced that it was looking to unify its group legal structure under a single parent company, Unilever PLC (ULVR LN), "creating a simpler company with greater strategic flexibility, that is better positioned for future success".The Dutch shareholders approved the unification on 21 September with 99.39% of the shares voted in favour, while the UK shareholders approved the proposal on 12 October with over 99% of the shares voted in favour.There is still one potential hurdle to the unification in the Departure Tax (GroenLinks initiative bill) being proposed by the GreenLeft Party in the Netherlands that could cost Unilever up to €11bn if it left the Netherlands.If the unification does go through, there will be an impact of passive fund activity on Unilever NV (UNA NA), but the bigger impact will be on Unilever PLC (ULVR LN). We estimate the net impact of the unification will see around US$3bn of passive money flow into the stock.In this Insight, we take a look at some of the details around the unification before jumping into the impact on the stocks and the possible spread between the two lines prior to unification.

<p>Shareholders end dual structure after 90 years. The mass consumer products giant will be unified at the end of November into a single company that will be based in London.The goal is to simplify the structure and streamline corporate decision making.</p>
<ul>
<li>Shareholders of London listed <a href="https://www.smartkarma.com/entities/unilever-plc" target="_blank" data-smartkarma-citation="entities:22197:1" rel="noopener">Unilever PLC (ULVR LN)</a> approved yesterday with more than 99% of the votes to end the dual structure, with headquarters in the United Kingdom and the Netherlands, which the company has had for the last 90 years.</li>
<li>Shareholders of the Dutch listed <a href="https://www.smartkarma.com/entities/unilever-nv" target="_blank" data-smartkarma-citation="entities:21141:1" rel="noopener">Unilever NV (UNA NA)</a> approved the decision last month with more than 99% of the votes. </li>
</ul>
<p><strong>Unification is expected to become effective on 29 November 2020</strong>, with dealings in new Unilever PLC shares (including new Unilever PLC Shares represented by ADS) commencing on 30 November 2020.</p>
<ul>
<li>Unilever PLC shares will continue to be included in the FTSE 100 (with a higher weighting).</li>
<li>following the listing of Unilever PLC shares on Euronext Amsterdam, the shares will also be included in the AEX Index, as well as the STOXX Europe 600 index (and other relevant pan-European indices).</li>
</ul>
<p><a href="https://www.smartkarma.com/entities/unilever-nv" target="_blank" data-smartkarma-citation="entities:21141:1" rel="noopener">Unilever NV (UNA NA)</a> shares closed yesterday at a discount of 1.48% to Unilever Plc., below the 10-year average, which is a discount of 0.27%. <strong>The discount should close as a result of the merger</strong>. The trade is LONG <a href="https://www.smartkarma.com/entities/unilever-nv" target="_blank" data-smartkarma-citation="entities:21141:1" rel="noopener">Unilever NV (UNA NA)</a> / SHORT <a href="https://www.smartkarma.com/entities/unilever-plc" target="_blank" data-smartkarma-citation="entities:22197:1" rel="noopener">Unilever PLC (ULVR LN)</a> . (Please note there is currency risk, which can be hedged).</p>

Shareholders end dual structure after 90 years. The mass consumer products giant will be unified at the end of November into a single company that will be based in London.The goal is to simplify the structure and streamline corporate decision making.

Shareholders of London listed Unilever PLC (ULVR LN) approved yesterday with more than 99% of the votes to end the dual structure, with headquarters in the United Kingdom and the Netherlands, which the company has had for the last 90 years.
Shareholders of the Dutch listed Unilever NV (UNA NA) approved the decision last month with more than 99% of the votes. 

Unification is expected to become effective on 29 November 2020, with dealings in new Unilever PLC shares (including new Unilever PLC Shares represented by ADS) commencing on 30 November 2020.

Unilever PLC shares will continue to be included in the FTSE 100 (with a higher weighting).
following the listing of Unilever PLC shares on Euronext Amsterdam, the shares will also be included in the AEX Index, as well as the STOXX Europe 600 index (and other relevant pan-European indices).

Unilever NV (UNA NA) shares closed yesterday at a discount of 1.48% to Unilever Plc., below the 10-year average, which is a discount of 0.27%. The discount should close as a result of the merger. The trade is LONG Unilever NV (UNA NA) / SHORT Unilever PLC (ULVR LN) . (Please note there is currency risk, which can be hedged).

Unilever's DLC Unwinding: Shareholder Approval, Timetable, Listing Considerations.

Smartkarma Research Team, Smartkarma

Smartkarma Research

Smartkarma Research Team

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Research Reinvented

<p>In this Webinar, we welcome Insight Provider <a href="https://www.smartkarma.com/profiles/jesus-rodriguez-aguilar" target="_blank" data-smartkarma-citation="accounts:5842" rel="noopener">Jesus Rodriguez Aguilar</a> to go over key ideas in Europe's Event-Driven landscape, as the impact of COVID-19 is still felt widely. </p>
<h3>The webinar was hosted on Wednesday, 7/October/2020, 5.00pm SGT/HKT.</h3>
<p>Listen to the session here:</p>
<p><iframe src="https://www.youtube.com/embed/LbhovDXxud8" width="560" height="315" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen="allowfullscreen"></iframe>Or listen on the go in podcast form:</p>
<p><iframe src="https://open.spotify.com/embed-podcast/episode/3pM1z6ckd1ZHFFWB8qX2YQ" width="100%" height="232" frameborder="0" allowtransparency="true" allow="encrypted-media"></iframe>Jesus is an Event-Driven Analyst looking across sectors at opportunities arising from securities mispricing (both credit and equity), share classes, bid announcements, prospective bids, and special situations. </p>

In this Webinar, we welcome Insight Provider Jesus Rodriguez Aguilar to go over key ideas in Europe's Event-Driven landscape, as the impact of COVID-19 is still felt widely. 
The webinar was hosted on Wednesday, 7/October/2020, 5.00pm SGT/HKT.
Listen to the session here:
Or listen on the go in podcast form:
Jesus is an Event-Driven Analyst looking across sectors at opportunities arising from securities mispricing (both credit and equity), share classes, bid announcements, prospective bids, and special situations. 

Smartkarma Webinar | Top Trade Ideas in European Event-Driven

Netherlands

Unilever N.V. manufactures branded and packaged consumer goods, including food, detergents, fragrances, home, and personal care products. Dually-listed company with ULVR LN.

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Unilever NV (UNIA NA)

Unilever on the Verge of Unification, So... What About Royal Dutch Shell?

RDSB ADR is trading at a 5% discount to RDSA ADR, well above the 10-year average. I regard that discount level as attractive. Trade: Long RDSB ADR ...

Jesus Rodriguez Aguilar

Selected European Holdcos and DLCs: October Report

The most compelling situations in this report are GBL and Investor AB. The spread in Unilever is less than okay, but safe. It should close in a...

Jesus Rodriguez Aguilar

Unilever Unification - Index Impact

With the Unilever unification of the PLC and NV lines approved by the Dutch and British shareholders, we take a look at the spread between the two...

Brian Freitas

Unilever's DLC Unwinding: Shareholder Approval, Timetable, Listing Considerations.

Unification is expected to become effective on 29 November 2020, with dealings in new Unilever PLC shares commencing on 30 November 2020. Long UNA...

Jesus Rodriguez Aguilar

Smartkarma Webinar | Top Trade Ideas in European Event-Driven

The webinar will be hosted on Wednesday, 7/October/2020, 5.00pm SGT/HKT.

Smartkarma Research

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