European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

John Wood Group PLC is an international energy service company that provides products and services to the oil and gas and power industries.  The Company designs and manufactures submersible pumping systems, well-head systems, and pressure controls.  John Wood also provides aftermarket services for heavy industrial turbines and aero gas turbines.

<ul>
<li>On 12 May, The Times reported that Sidara was planning to make a higher bid for Wood after its initial offer was turned down by the company last week.</li>
<li>This proposal was unsolicited and conditional. Premium is 30%, implied equity value £1,418 million (c.$1.775 million), implied EV £2,508 million; 5.3x EV/Fwd NTM EBITDA. Sidara recognizes value.</li>
<li>Shares are trading at a lower spread than at the time of Apollo's 240p proposal. Nevertheless, without a significant sweetening, the likelihood of a deal seems relatively low.</li>
</ul>


On 12 May, The Times reported that Sidara was planning to make a higher bid for Wood after its initial offer was turned down by the company last week.
This proposal was unsolicited and conditional. Premium is 30%, implied equity value £1,418 million (c.$1.775 million), implied EV £2,508 million; 5.3x EV/Fwd NTM EBITDA. Sidara recognizes value.
Shares are trading at a lower spread than at the time of Apollo's 240p proposal. Nevertheless, without a significant sweetening, the likelihood of a deal seems relatively low.


Sidara/John Wood: Awaiting a Sweetened Offer

Banco de Sabadell SA attracts deposits and offers commercial banking services. The Bank offers mortgage, consumer, student, and building improvement loans, private banking services, and insurance, and sponsors Visa credit cards.  The Bank operates branches throughout Spain, elsewhere in Europe, the Caribbean, the Americas, and Asia.

<ul>
<li>On 6 May, the Board of Sabadell rejected the merger proposal as "it significantly undervalues its growth prospects and is not aligned with the interests of its customers and shareholders".</li>
<li>BBVA could take the offer directly to Sabadell shareholders, but a hostile offer seems extremely unlikely and there are no precedents in the Spanish banking sector.</li>
<li>I find it unlikely that both parties reach an agreement because the terms would likely be unfavourable for BBVA (premium 40%-50%). Market sentiment also suggests a low probability.</li>
</ul>


On 6 May, the Board of Sabadell rejected the merger proposal as "it significantly undervalues its growth prospects and is not aligned with the interests of its customers and shareholders".
BBVA could take the offer directly to Sabadell shareholders, but a hostile offer seems extremely unlikely and there are no precedents in the Spanish banking sector.
I find it unlikely that both parties reach an agreement because the terms would likely be unfavourable for BBVA (premium 40%-50%). Market sentiment also suggests a low probability.


Perficient, Inc. is an information technology consulting firm. The Firm designs and delivers business-driven information technology solutions, such as business analysis, portal, content management, business integration/SOA, commerce. business intelligence and customer relation management (CRM). Perficient serves clients from a network of domestic and global locations.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/perficient-inc" target="_blank" data-smartkarma-citation="entities:19838:1" rel="noopener">Perficient Inc (PRFT US)</a> agreed to be acquired by EQT, for $76/share in cash, 75% premium, 51% premium to 30-day VWAP, and c. $3 billion EV.</li>
<li>I understand EQT has opted to present an offer that the Board could not refuse, on both EV/Fwd EBITDA and Fwd P/E basis.</li>
<li>Spread is 3.6%/6.2% (gross/annualised, assuming settlement by 16 December). Long.</li>
</ul>



Perficient Inc (PRFT US) agreed to be acquired by EQT, for $76/share in cash, 75% premium, 51% premium to 30-day VWAP, and c. $3 billion EV.
I understand EQT has opted to present an offer that the Board could not refuse, on both EV/Fwd EBITDA and Fwd P/E basis.
Spread is 3.6%/6.2% (gross/annualised, assuming settlement by 16 December). Long.


EQT to Acquire Perficient for $3.0 Billion

Rio Tinto Limited is an international mining company.  The Company has interests in mining for aluminum, borax, coal, copper, gold, iron ore, lead, silver, tin, uranium, zinc, titanium dioxide feedstock, diamonds, talc and zircon. Dually-listed company with RIO LN.

<ul>
<li>The Discounts to NAV of covered holdcos mainly widened during April. Discounts to NAV: C.F.Alba, 49.1% (vs. 47.3%); GBL, 39% (vs. 38.1%); Heineken Holding, 17.3% (vs 16.7%); </li>
<li>Industrivärden C, 4.7% (vs. 1.4%); Investor B, 8.3% (vs. 6.1%); Porsche Automobile Holding, 41.1% (vs. 45.4%). Rio DLC spread tightened to 22.5% (vs. to 24.9%).</li>
<li>What seems interesting: Porsche SE vs. listed assets and the Rio DLC (long RIO LN/short RIO AU).</li>
</ul>


The Discounts to NAV of covered holdcos mainly widened during April. Discounts to NAV: C.F.Alba, 49.1% (vs. 47.3%); GBL, 39% (vs. 38.1%); Heineken Holding, 17.3% (vs 16.7%); 
Industrivärden C, 4.7% (vs. 1.4%); Investor B, 8.3% (vs. 6.1%); Porsche Automobile Holding, 41.1% (vs. 45.4%). Rio DLC spread tightened to 22.5% (vs. to 24.9%).
What seems interesting: Porsche SE vs. listed assets and the Rio DLC (long RIO LN/short RIO AU).


Selected European HoldCos and DLC: April'24 Report

Puig Brands SA designs and manufactures luxury lifestyle products. The Company offers beauty, fragrance, and fashion products. Puig Brands serves customers worldwide.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/puig-brands-sa" target="_blank" data-smartkarma-citation="entities:42395:1" rel="noopener">Puig Brands (PUIG SM)</a> will start trading next Friday 3 May at 12:00. The placement price was <strong>€24.5/share</strong> at the top of the range (which was increased due to investors' demand).</li>
<li>Puig, valued at €13,900 million, has placed 32% of its capital among qualified investors. The Puig family will retain over 90% of the voting rights through their Class A shares.</li>
<li>Puig will foreseeably enter the Ibex 35 after the ordinary meeting of the Ibex Technical Advisory Committee corresponding to the month of December.</li>
</ul>



Puig Brands (PUIG SM) will start trading next Friday 3 May at 12:00. The placement price was €24.5/share at the top of the range (which was increased due to investors' demand).
Puig, valued at €13,900 million, has placed 32% of its capital among qualified investors. The Puig family will retain over 90% of the voting rights through their Class A shares.
Puig will foreseeably enter the Ibex 35 after the ordinary meeting of the Ibex Technical Advisory Committee corresponding to the month of December.


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.