European Event-Driven Analyst

Jesus Rodriguez Aguilar

Jesús is an Insight Provider (Event-driven) on the Smartkarma network, where he looks across sectors at opportunities arising from securities mispricing (both credit and equity), share classes, bid announcements, prospective bids, and special situations. He has served as Economic and Business Advisor at the Spanish Congress in Madrid. Prior to that, he has worked in the City of London: as a Credit Analyst at Bloomberg; Event-driven associate at former boutique European Research; and doubled as Special Situations and Equity-linked VP (convertible bonds) at Merrill Lynch. Jesús has an MBA from the London Business School, a BA (Hons.) degree in Economics from the Complutense University in Madrid, and a BA (Hons.) in Law from U.N.E.D., also in Madrid.

CA Immo: Raised Offer, Aggregate's Potential Competing Offer

Event-Driven

On the evening of 14 March, <a href="https://www.smartkarma.com/entities/immofinanz-ag" target="_blank" data-smartkarma-citation="entities:22547:1" rel="noopener">IMMOFINANZ AG (IIA AV)</a> announced its intention to launch a voluntary takeover offer to acquire the 72.5% stake in <a href="https://www.smartkarma.com/entities/s-immo-ag" target="_blank" data-smartkarma-citation="entities:22559:1" rel="noopener">S IMMO AG (SPI AV)</a> it does not already own for approximately €930 mn.
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Immofinanz currently holds approximately 26.49% of S Immo.
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S Immo indirectly holds 10.86% of Immofinanz.
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S Immo currently holds a 6% stake pct in <a href="https://www.smartkarma.com/entities/ca-immobilien-anlagen-ag" target="_blank" data-smartkarma-citation="entities:22540:1" rel="noopener">CA Immobilien Anlagen AG (CAI AV)</a>.
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At the end of January 2021, Ronny Pecik (CEO of Immofinanz), was to step down upon the completion of the sale of his c. 10.7% stake in Immofinanz to Aggregate Holdings.
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To make things more interesting, Aggregate Holdings is interested in CA Immo, which itself is the object of a bid by Starwood (see <a href="https://www.smartkarma.com/insights/ca-immo-starwood-mandatory-offer" target="_blank" data-smartkarma-citation="insights:46905" rel="noopener">CA Immo - Starwood: Mandatory Offer</a> and <a href="https://www.smartkarma.com/insights/ca-immo-raised-offer-aggregate-s-potential-competing-offer" target="_blank" data-smartkarma-citation="insights:48625" rel="noopener">CA Immo: Raised Offer, Aggregate's Potential Competing Offer</a>).
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Aggregate confirmed that it may be considering a takeover bid for CA Immo, which could jeopardize the current bid of Starwood (largest shareholder with a c. 30% stake). Immediately after its sweetened offer of €34.44 per share was placed, the share price rose above that level and has remained ever since.
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In 2018, Pecik himself was instrumental in Starwoods's acquisition of its stake in CA Immo, which resulted in the failure of Immofinanz’s own takeover bid for CA Immo at the time, prompting it to acquire its 26.49% stake in S Immo instead. As mentioned, S Immo also owns an almost 12% stake in Immofinanz.
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Recent announcements, bid and shareholder changes are raising expectations of a three-way merger between CA Immo, Immofinanz and S Immo.
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The offer price seems low (closing price on the last trading session prior to the release), quite under the level at which S Immo was trading in December 2019, around €22.5 per share. Diluted EPRA NNNAV per share as of Q3 2020 was €20.02. The move by Immofinanz looks more like an opening gambit and shares are trading 8% higher vs. offer on exceptions of a sweetened offer and/or a move by Aggregate.
S Immo shares are currently trading at an FY20e P/NAV of 0.81x (based on Capital IQ consensus), around the same level as peers, equally with regards to FY21e and FY22e. The shares offer FFO yields of 2.9% and 4.0% based on FY20e and FY21e numbers, respectively.
Target price is €23.1 per share (around the same level as consensus ind NAVPS, supported by FFO/share yield), 18% higher than current levels.

On the evening of 14 March, IMMOFINANZ AG (IIA AV) announced its intention to launch a voluntary takeover offer to acquire the 72.5% stake in S IMMO AG (SPI AV) it does not already own for approximately €930 mn.


Immofinanz currently holds approximately 26.49% of S Immo.


S Immo indirectly holds 10.86% of Immofinanz.


S Immo currently holds a 6% stake pct in CA Immobilien Anlagen AG (CAI AV).


At the end of January 2021, Ronny Pecik (CEO of Immofinanz), was to step down upon the completion of the sale of his c. 10.7% stake in Immofinanz to Aggregate Holdings.




To make things more interesting, Aggregate Holdings is interested in CA Immo, which itself is the object of a bid by Starwood (see CA Immo - Starwood: Mandatory Offer and CA Immo: Raised Offer, Aggregate's Potential Competing Offer).


Aggregate confirmed that it may be considering a takeover bid for CA Immo, which could jeopardize the current bid of Starwood (largest shareholder with a c. 30% stake). Immediately after its sweetened offer of €34.44 per share was placed, the share price rose above that level and has remained ever since.


In 2018, Pecik himself was instrumental in Starwoods's acquisition of its stake in CA Immo, which resulted in the failure of Immofinanz’s own takeover bid for CA Immo at the time, prompting it to acquire its 26.49% stake in S Immo instead. As mentioned, S Immo also owns an almost 12% stake in Immofinanz.




Recent announcements, bid and shareholder changes are raising expectations of a three-way merger between CA Immo, Immofinanz and S Immo.


The offer price seems low (closing price on the last trading session prior to the release), quite under the level at which S Immo was trading in December 2019, around €22.5 per share. Diluted EPRA NNNAV per share as of Q3 2020 was €20.02. The move by Immofinanz looks more like an opening gambit and shares are trading 8% higher vs. offer on exceptions of a sweetened offer and/or a move by Aggregate.
S Immo shares are currently trading at an FY20e P/NAV of 0.81x (based on Capital IQ consensus), around the same level as peers, equally with regards to FY21e and FY22e. The shares offer FFO yields of 2.9% and 4.0% based on FY20e and FY21e numbers, respectively.
Target price is €23.1 per share (around the same level as consensus ind NAVPS, supported by FFO/share yield), 18% higher than current levels.

S IMMO AG

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