European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>On 10 January, the AMF published the final results: Veolia will own 86.22% of the share capital (including the 29.9% it already owned), thus exceeding the minimum 50% threshold.</li>
<li>Veolia is going to reopen the offer for the remaining 13.78%, from 12 January to 27 January. If it reaches 90%, it intends to exercise the squeeze-out and delist Suez.</li>
<li>This is the end of a nasty battle, a done deal and I recommend tendering to avoid holding a considerably less liquid stock.</li>
</ul>


On 10 January, the AMF published the final results: Veolia will own 86.22% of the share capital (including the 29.9% it already owned), thus exceeding the minimum 50% threshold.
Veolia is going to reopen the offer for the remaining 13.78%, from 12 January to 27 January. If it reaches 90%, it intends to exercise the squeeze-out and delist Suez.
This is the end of a nasty battle, a done deal and I recommend tendering to avoid holding a considerably less liquid stock.


Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

Wisdomtree Japan Hedged Eq / Technical Analysis

Market dynamics continue to send mixed signals, but the bottom line is that not one MSCI ACWI Sector is breaking down, and important price support levels are holding in the US, Europe, and Japan. Additionally, the MSCI ACWI, ACWI ex-US, and EAFE indexes all remain above critical support levels. Until supports start to break we cannot be bearish. It is also worth noting that various indicators could be making a turn for the better, including early signs of interest rates bottoming in the US and Germany, a potential false breakdown in crude oil, and high yield spreads leveling-out.

Market dynamics continue to send mixed signals, but the bottom line is that not one MSCI ACWI Sector is breaking down, and important price support levels are holding in the US, Europe, and Japan. Additionally, the MSCI ACWI, ACWI ex-US, and EAFE indexes all remain above critical support levels. Until supports start to break we cannot be bearish. It is also worth noting that various indicators could be making a turn for the better, including early signs of interest rates bottoming in the US and Germany, a potential false breakdown in crude oil, and high yield spreads leveling-out.

Critical Supports Holding in the US, Europe, & Japan; Buying Health Care, Utilities, Materials, Tech

Shanghai Stock Exchange Composite Index / Technical Analysis

Cracks are beginning to show, particularly in EM/China where the MSCI EM index (EEM-US) is breaking below major $52 base support, the Shanghai Composite is breaking below 3500, the CSI 300 is breaking below 4885, and Hong Kong's Hang Seng is breaking below 27,000 support. Thankfully we have stayed away from areas hardest hit since EM/China has had poor relative performance for quite some time. Despite this being largely self-induced and very China-specific due to China's regulatory crackdown, the overhang could linger as additional Sectors/industries could be targeted. Moreover, it certainly does not help our already cautious and neutral outlook, but rather reinforces it.

Cracks are beginning to show, particularly in EM/China where the MSCI EM index (EEM-US) is breaking below major $52 base support, the Shanghai Composite is breaking below 3500, the CSI 300 is breaking below 4885, and Hong Kong's Hang Seng is breaking below 27,000 support. Thankfully we have stayed away from areas hardest hit since EM/China has had poor relative performance for quite some time. Despite this being largely self-induced and very China-specific due to China's regulatory crackdown, the overhang could linger as additional Sectors/industries could be targeted. Moreover, it certainly does not help our already cautious and neutral outlook, but rather reinforces it.

Weakness Contained To EM & China Thus Far; Actionable Themes: Tech, Utilities, Financials, Materials

The end of a lengthy takeover battle is in sight, and I have been long Suez since the outset.
On 29 June, the board of Suez announced that it recommends the acceptance of the takeover bid.
Also on 29 June, Veolia informed the AMF of the increase of the Offer price from €18/share (cum dividend) to €20.50/share (cum dividend) and filed the <a href="https://www.veolia.com/sites/g/files/dvc4206/files/document/2021/06/Finance_Draft%20offer%20document%20on%20Veolia%20cash%20tender%20offer%20for%20Suez_06-29-2021.pdf" target="_blank" rel="noopener">Draft Offer Document</a> with the AMF.
A €0.65 dividend per share will be submitted to the vote of Suez shareholders at the next AGM of Suez (30 June). The ex-dividend date would be 6 July, and the payment date would be 8 July. If the distribution is approved, the offer price will be reduced by €0.65/share as from the ex-date. The adjusted offer price is €19.85/share.
The validity threshold of over 50% should be comfortably crossed.
Gross spread is 2.2%, with closing in about six months. Recommendation is long SEV FP.

The end of a lengthy takeover battle is in sight, and I have been long Suez since the outset.
On 29 June, the board of Suez announced that it recommends the acceptance of the takeover bid.
Also on 29 June, Veolia informed the AMF of the increase of the Offer price from €18/share (cum dividend) to €20.50/share (cum dividend) and filed the Draft Offer Document with the AMF.
A €0.65 dividend per share will be submitted to the vote of Suez shareholders at the next AGM of Suez (30 June). The ex-dividend date would be 6 July, and the payment date would be 8 July. If the distribution is approved, the offer price will be reduced by €0.65/share as from the ex-date. The adjusted offer price is €19.85/share.
The validity threshold of over 50% should be comfortably crossed.
Gross spread is 2.2%, with closing in about six months. Recommendation is long SEV FP. 

Despite a much more mixed market environment, our weight-of-the-evidence approach continues to support a constructive intermediate-term outlook. The bottom line: there is little evidence that suggests a pullback would be anything more than a buying opportunity.

Despite a much more mixed market environment, our weight-of-the-evidence approach continues to support a constructive intermediate-term outlook. The bottom line: there is little evidence that suggests a pullback would be anything more than a buying opportunity.

Defensives Are Worth A Look; Hang Seng, Shanghai Comp, Nikkei 225, STOXX 50 Support Levels Holding

France

Veolia Environnement SA operates utility and public transportation businesses. The Company supplies drinking water, provides waste management services, manages and maintains heating and air conditioning systems, and operates rail and road passenger transportation systems.

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Veolia Environnement SA (VIE FP)

Veolia/Suez: Reopening of Offer Period

On 10 January, the AMF published the offer final results: Veolia will own 86.22 % of the share capital (including the 29.9% it already owned), thus...

Jesus Rodriguez Aguilar

Critical Supports Holding in the US, Europe, & Japan; Buying Health Care, Utilities, Materials, Tech

Various indicators are making a turn for the better, including early signs of interest rates bottoming in the US and Germany, a false breakdown in...

Vermilion Research

Weakness Contained To EM & China Thus Far; Actionable Themes: Tech, Utilities, Financials, Materials

Cracks are beginning to show, particularly in EM/China. Key support violations include the MSCI EM index below $52, the Shanghai Comp below 3500,...

Vermilion Research

Approval from Suez's Board

The end of a lengthy takeover battle is in sight. Validity threshold of over 50% should be comfortably crossed. Gross spread is 2.2%, with closing...

Jesus Rodriguez Aguilar

Defensives Are Worth A Look; Hang Seng, Shanghai Comp, Nikkei 225, STOXX 50 Support Levels Holding

A review of major global indexes reveals an absence of major breakdowns. We highlight opportunities within defensive Sectors (Real Estate, Consumer...

Vermilion Research

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