TheChek News Flow

FT : Heathrow/infrastructure investment: Ferrovial departure looks well timed

New stakeholders may struggle to get take off on investment returns

Sellers of infrastructure assets can extract high prices from bidders. One reason is that motorways, airports, pipelines and the like usually have long-term, steady cash flows, often with an element of inflation protection, and buyers can load up their investment with debt. Adding debt amplifies investment returns and losses.

Perhaps Ardian, the private equity house that is buying part of Ferrovial’s stake in Heathrow airport alongside Saudi Arabia’s Public Investment Fund, plans to do the same. Without an added slug of debt, it is not easy to see how it might make the mid-teen returns on equity that it usually targets on infrastructure projects. 

Ardian and PIF are paying a healthy £2.4bn for Ferrovial’s 25 per cent of Heathrow. Other shareholders, which include the Qatar Investment Authority, Caisse de dépôt et placement du Québec and Singapore’s sovereign wealth fund GIC, can choose to keep their holdings, buy Ferrovial’s shares, or tag along and sell into the bid.

The bid implies an equity value of £9.5bn. Add in the year-end net debt, which Mediobanca Research pencils in at £16.3bn, and the enterprise value is just shy of £26bn. That is a near-30 per cent premium to Heathrow’s regulated asset base. This will reflect the accumulation of the net value of investment that its owners have made into Heathrow.

That price is also about 13 times next year’s projected earnings before interest, tax, depreciation and amortisation (ebitda), expected to be lower than this year given the cut in regulated landing fees. Listed competitors travel at around 10 times. Vinci, the French infrastructure and construction group, which bought 50.1 per cent of Gatwick in 2018, paid more. But that was for a pre-pandemic majority purchase. Ardian and PIF might end up stuck at 25 per cent.

Ardian will need to sweat the asset to achieve mid-teen investment returns. Assume, for the sake of argument, that over the next decade Heathrow increases its ebitda by 3 per cent a year and cuts interest costs gradually. Hold annual capital spending and tax steady at £800mn to £900mn. If Ardian then sold out at 12 times ebitda, it could achieve an annualised rate of return in the high single digits.

True, this might well creep into the double digits should the new investors leverage their own investment. And there may be room to nudge up Heathrow’s cash flows. Analysis by Citigroup suggests that it underperforms on retail revenues compared with Zurich and ADP. Lastly, none of these rough-and-ready numbers factors in the — increasingly remote — prospect of a third runway. Nevertheless, at this point, Ferrovial has extracted a good price for its holding.

ADP/green travel: French regulators move de Gaulle posts

In general, infrastructure investments are chosen for their predictable cash flows. But for airports that is not always the case. Witness what occurred during the pandemic. Also, changes in the regulatory landscape can spook investors. Just look at what is happening in France.

New regulators want to change the way airports are paid for their facilities. Legal changes are likely. The tacit approval of transport minister Clément Beaune is causing turbulence. Shares in ADP, whose properties include Paris’s two largest airports, fell as much as 6 per cent on Monday in response.

The jet lag from the pandemic is finally dissipating from the European travel industry. Traffic levels are almost back to 2019 levels. At ADP they might hit just over 90 per cent this year.

Paris Charles de Gaulle airport is not only mainland Europe’s busiest airport. It is also a nexus for international travel for France’s luxury industry. It is highly profitable for ADP. Those earnings have so far largely fallen outside the reach of regulators. That may change as France pushes ahead with efforts to green up its aviation industry.  

Regulators assess airport profits in two ways; dual till or single till. ADP has been mainly subject to the first approach. That means most of the money it makes from selling sandwiches and handbags goes to shareholders.

Regulators consider the whole take in single till systems, at London Heathrow, for example. That increases the amount of investment in green infrastructure they can mandate. This means lower returns for shareholders, notes Andrew Lobbenberg of Barclays.

ADP’s position is now uncertain. That explains the near one-fifth underperformance of its shares compared with peers this year. The shares previously commanded a premium. This has now all but disappeared.

The French government plans to move single till airports to a new hybrid model. Whether ADP will be moved from dual till to the new model remains unknown. But France is leading Europe’s push to green its aviation industry and someone will have to pay for it.

Restructure or liquidate? Deadline looms for China’s Evergrande

Heavily indebted developer must come up with a plan before crucial court hearing on Monday

In April, a group of international investors holding billions of dollars of Evergrande bonds backed a restructuring of the stricken Chinese property developer. Now, they are braced for a court hearing on Monday that could lead to the company’s liquidation.

It has been a tortuous road for overseas creditors of Evergrande, whose default in 2021 triggered a China-wide property crisis that continues to rock the world’s second-largest economy.

Monday’s hearing at Hong Kong’s High Court could prove a key moment in deciding what value can be salvaged from Evergrande’s bonds. It could also be an important test of the treatment of international investors when a mainland Chinese company fails.

The Hong Kong winding-up lawsuit, brought by offshore investor Top Shine Global last year, alleges Evergrande has failed to honour claims of HK$863mn ($110mn). At a previous hearing in October, Judge Linda Chan gave Evergrande “one last opportunity” to formulate a new restructuring proposal, warning that otherwise it was “very likely” to be subject to a winding-up order.

Bondholders’ advisers have said this order is likely to lead to the group’s “uncontrolled collapse” with a “catastrophic effect” on other developers in China and the ability of Chinese companies generally to raise money in international capital markets.

“If this goes to liquidation, the remaining options are likely to be far less palatable” to overseas investors, said Brock Silvers, chief investment officer at private equity firm Kaiyuan Capital in Hong Kong. Evergrande did not respond to requests for comment.

The international creditors had hoped for better in April when they backed Evergrande’s restructuring plan. The deal offered them various instruments depending on their holdings, including new notes with a 10- to 12-year maturity issued by the company and bonds that could be exchanged for shares in its Hong Kong-listed subsidiaries.

But in September, Evergrande cast doubt on the plan, saying it could not issue new notes because its mainland business, Hengda Real Estate, was “being investigated”. Days later the group said its chair, Hui Ka Yan — once Asia’s richest man — had been placed under “mandatory measures” on suspicion of involvement in unspecified “crimes”.

At October’s court hearing, Evergrande’s lawyer said it would look into “monetising” shares in two of its Hong Kong-listed subsidiaries, electric vehicle company Evergrande New Energy Vehicle Group and Evergrande Property Services Group.

It has since offered creditors a 30 per cent stake in each of the two units, and a nearly 18 per cent stake in Evergrande itself, a person with direct knowledge of the matter said. However, they added, it was not clear whether creditors would accept such a deal.

The combined market value of the two units is about $1bn against $30bn in total international bondholder claims based on a Bloomberg estimate.

In a blow to creditors ahead of October’s hearing, Dubai-based technology company NWTN said it was suspending a deal to invest $500mn in the electric vehicle unit, which was developed as part of Evergrande’s expansion out of the property sector before its default.

In April 2021 the electric vehicle company’s market value was almost $87bn — more than titans of the car industry such as Ford — despite never having produced a single vehicle.

Originally a healthcare company that was renamed in 2019, it raised funds from its parent and investors including Sequoia China — now known as HongShan — Chinese internet giant Tencent, Jack Ma-backed private equity firm Yunfeng Capital and ride-hailing group Didi. Nearly three years later, it is worth just over $400mn. As of May 2023 the EV unit said it had delivered more than 1,000 units of its flagship model since its launch last year.

The property services unit said this week it was suing its parent company to recover deposit certificate pledge guarantees for just under Rmb2bn ($280mn). A person close to that lawsuit said it was a sign the unit’s executives expected the parent company to be liquidated and were trying to protect their own interests.

Evergrande’s dollar bonds are trading at deeply distressed levels. One bond maturing in 2025, on which Evergrande has already defaulted, has fallen to less than two cents on the dollar.

If the Hong Kong court orders Evergrande to be wound up, bondholders’ attempts to salvage some returns would enter a new and perhaps even less predictable phase.

A liquidator could try to take control of Evergrande’s Cayman Islands holding company and its complex web of subsidiaries, including the property services and EV arms, a Hong Kong-based restructuring lawyer not involved in the case said.

In theory the liquidator could try to seize control of some Evergrande assets in mainland China under a 2021 mutual recognition agreement between Beijing and Hong Kong.

In practice, some lawyers doubt this would succeed. It is not clear mainland courts would accept a Hong Kong judge’s winding-up order, they said, and the onshore units would likely have to repay onshore creditors first.

“Even if you got lucky and found a Shenzhen judge, for example, to recognise your power over some assets in Guangdong somewhere, when it comes to enforcement, it’s not a level playing ground,” said a second Hong Kong lawyer who specialises in restructuring and insolvency.

“I don’t think anyone going in as a liquidator of Evergrande is going to be holding too much hope of making a recovery in mainland China.”

For years the offshore bondholders reaped high returns from their exposure to one of China’s biggest developers. Last month a lawyer for some bondholders said in court that in the event of a liquidation, they might expect to receive less than three cents on the dollar.

The outlook could be even worse. The process could take a decade or more, the second Hong Kong lawyer said, adding: “They may be looking at zero recovery.”

Foreign minister Annalena Baerbock says country will fulfil its international obligations

Germany’s foreign minister Annalena Baerbock has said Berlin will stand by all its international financial commitments to tackle climate change, despite a budget crisis that has thrown its 2024 spending plans into disarray.

“We will always be a reliable partner,” Baerbock told the Financial Times ahead of the UN’s COP28 climate summit in Dubai. “That’s why we agreed within the federal government that we will fulfil our international obligations.”

These included €6bn in international climate finance that Germany had committed to provide by 2025, €2bn for the UN’s Green Climate Fund, and Berlin’s contribution to a new global fund to address climate-related loss and damage in developing countries, she added.

Baerbock was speaking as the German government scrambled to plug a €60bn hole in its public finances created by a bombshell judgment by the country’s constitutional court on November 15 that plunged chancellor Olaf Scholz’s three-party coalition into crisis.

Judges struck down a 2021 move by ministers to repurpose funds earmarked for dealing with the Covid-19 pandemic to fighting climate change. The court ruled it violated the rules of the “debt brake”, a strict curb on new borrowing enshrined in the German constitution.

Baerbock said the most sensible solution to the fiscal problem was to reform the debt brake itself, which limits the federal government’s structural deficit to 0.35 per cent of gross domestic product.

It has been suspended since 2020, initially because of the pandemic and then later because of Russia’s war on Ukraine and the sharp drop in Russian gas supplies to Europe.

“Its original authors could not have anticipated that it would end up leaving us wholly unable to deal effectively with the kind of emergencies and crises we’re going through now,” the foreign minister said.

She added that it needed to be expanded to include an “investment component” that would allow for spending on big infrastructure projects.

The opposition Christian Democrats have said they would not co-operate in any attempt to amend the debt rule, a move that would require a two-thirds majority in parliament.

But Baerbock said that several Christian Democrat regional governors had “indicated that [reform] would be a good idea”.

“The regions are . . . asking if it’s a good idea to just patch up crumbling infrastructure or whether it might be better to really invest in the railways, the expansion of broadband, things that will make the regions strong,” she added.

Germany’s first female foreign minister and one of its most prominent Green politicians, Baerbock has long played a big role in international climate diplomacy.

She has been a strong advocate of the idea of a “loss and damage fund” to compensate developing countries for climate-related damage — an idea that finally came to fruition at the start of COP28 in Dubai on Thursday when Germany and the United Arab Emirates announced they were both contributing $100mn to the fund.

Baerbock called the announcements a “breakthrough”, adding she was “really hopeful that other big emitters like Saudi Arabia and China will also show responsibility at COP28 and contribute”.

The summit comes amid growing concern among scientists about the speed of climate change and the increasingly frequent extreme weather events it is causing.

According to a UN report released last month, the world is heading for a temperature rise of between 2.5C and 2.9C by 2100. That is far off the goal set in Paris in 2015 to limit global warming to 1.5C above pre-industrial levels. 

“With the war in Ukraine and the crisis in the Middle East, the international community is facing almost unprecedented challenges, and that’s why this COP is so unbelievably important in geostrategic terms,” Baerbock said.

“We’ve seen in this year alone how wounded the world is, with the forest fires in Rhodes, or the drought in the Amazon basin.”

Baerbock said Germany would use COP28 to press for agreement on a gradual phaseout of all fossil fuels, a position that is likely to encounter strong opposition from major oil and gas-producing countries such as Russia and Saudi Arabia.

She added that a phaseout was needed to achieve the Paris climate goals. “Fossil fuels make the biggest contribution to global warming,” she said.

Sultan al-Jaber, chief executive of the Abu Dhabi National Oil Company and president of COP28, has said he will seek support for an agreement to triple renewable energy capacity and double energy efficiency. But Baerbock said that was not enough.

Only by combining those two goals with a fossil-fuel phaseout “can we hold off the worst of the destruction”, she added. “Otherwise, we won’t be able to deal with the damage caused by climate change.”

Jaber has faced criticism over his closeness to the hydrocarbons industry, with allegations that he will use the UAE’s role as host of COP28 to discuss oil and gas deals. Jaber has said these claims were “false”.

Baerbock dismissed the criticism of the COP28 president. “Obviously countries which have built their wealth on fossil fuels won’t wake up one morning and give up that wealth — until they have an alternative,” she said, noting the UAE were also investing heavily in renewables.

Baerbock said she was in “favour of trying to overcome the old divisions in climate diplomacy”, pointing to Germany’s membership of the High Ambition Coalition, which calls for more aggressive action on climate change and brings together nations as disparate as France, Kenya, Jamaica and Fiji.

“We have to try to bridge the gaps that have always existed between north and south, between industrial nations and developing countries,” she added.

Many important tech breakthroughs originated in research organizations. But the innovations are most often commercialized elsewhere.

There’s much speculation about the reasons for the abrupt removal and subsequent return of Sam Altman as the CEO of OpenAI. Irrespective of who leads the company going forward, OpenAI faces a fundamental challenge in reconciling its mission with its choice of corporate structure and business model. To solve it, we can learn from the history of tech innovations.

Much of the discourse on OpenAI’s dysfunction has focused on tribal disputes—management against the board, AI safety advocates against business leaders and open source advocates against private innovation champions. OpenAI is too important of an initiative, and its people— whether working on research or commercialization—are too great to be trivialized by a focus on personalities or social media posturing. Instead, we should look at history.

Research organizations have developed many revolutionary technologies. But most often, these innovations have been commercialized and popularized by other, for-profit companies. Consider: Researchers at Bell Labs invented the transistor, but Fairchild Semiconductor commercialized it. IBM’s T.J. Watson Lab pioneered work on dynamic random access memory, but Intel made the first commercial DRAM chip. Xerox Parc invented Ethernet and the graphical user interface, but 3Com and Apple, respectively, commercialized them. Hypertext Transfer Protocol was invented at CERN and made broadly accessible by Netscape’s web browser. Most relevantly, the transformer architecture was invented at Google and popularized by OpenAI via ChatGPT.

There are many reasons why the businesses that nurture groundbreaking research have repeatedly failed to capitalize on those innovations commercially. They include misalignment of corporate culture, employee motivations and incentives, investors’ differing time horizons and return expectations and differences in risk tolerance.

A researcher motivated to do groundbreaking innovation and ensure it is both novel and safe may view a rush to commercialization as rash. Conversely, those who aspire to beat competitors to market with an innovative product don’t want to wait to ensure every corner case is accounted for; waiting to achieve perfection may allow others to reap the rewards. Those who are concerned about safety still may differ about the size of the risk and how to mitigate it. Is advanced artificial general intelligence akin to nuclear energy or the natural evolution of computer science? Governments, philanthropies and private investors that back research efforts measure their returns in different ways over different time periods. Aligning such differences in objectives and incentives under one roof has historically been very difficult if not impossible.

OpenAI created a for-profit commercial entity under its original nonprofit research parent. This experiment to have the best of both worlds under one roof might have been ingenious but clearly failed to resolve the misalignment between research and commercialization. The company should take heart that its predicament is not unique, rather a recurrence of a fundamental organizational conflict in tech innovations.

In its post announcing Altman’s firing, the previous board of OpenAI made clear that it is a nonprofit with the responsibility to advance its mission of ensuring that artificial general intelligence benefits all of humanity. History suggests that for this mission to have widespread impact, the company ought to reverse course, go back to its roots as a research organization and leave commercialization to others. Hopefully the new board will pursue that path.

Famed for speedy weight loss, the effects of the prescription-only drug are now shifting beauty standards.

KEY INSIGHTS

• Ozempic’s off-label use for weight loss is creating a new beauty concern, dubbed “Ozempic face.”
• Experts predict that its prevalence will lead to wider uptake of bio-stimulating products, such as Sculptra and Radiesse, and changes in how plastic surgery is carried out. Meanwhile, treatments and products for facial sculpting like contouring sticks are seeing a downshift.
• Aesthetic clinics and chains, a new favourite target for private equity and venture capital, are poised to cash in on the moment.

When 29-year-old Maria, a social media executive from New York, arrived for a routine Botox appointment, she was surprised by an elective add-on her doctor proffered: Ozempic.

“[My doctor] said, ‘Oh, do you want a shot of Ozempic while you’re here?’ like she was offering me an extra napkin or something.” On hearing she could lose up to fifteen pounds that week, Maria took it, later finding the subsequent nausea overwhelming. But on the Upper East Side, where she had her shot, and across the nation, more and more people are collecting a weekly prescription — covertly or not.

In the blink of an eye, Ozempic, otherwise known as semaglutide, and its competitors like Wegovy and Rybelsus went from a little-known medicine for diabetics to a cultural touchstone. Its off-label use for weight loss, and fast, is what catapulted the drug from pharmaceutical-rep chatter to the preserve of Hollywood starlets, socialites and elite zip codes.

The drug’s prevalence has led to less consumption of candy and beer, per Walmart, and the rise of Ozempic face, a “suddenly gaunt, hollow-looking … prematurely aged face,” leading clients to change their minds on once-undesirable roundness and plumpness, said Dr. Ahmed El Muntasar, a general and aesthetic practitioner in the UK.

Moreover, Ozempic’s rise has yielded a hit on the “snatched” look. Spate, a consumer trends platform, found that social media searches for “contouring” are down 10.6 percent year-on-year, with co-founder Yarden Horwitz adding that while contouring techniques are slowing down in search, bronzing products, which create more of a healthy all-over glow, are up 33 percent since last year.

Skin-tightening lasers like Morpheus8, which can cost around $1,700 for a single face-and-neck session, and microdroplet treatments like Profhilo and the newly-FDA approved Skinvive that improve skin hydration the fine lines caused by sagging skin are also trending, experts said. Microdroplet treatments can cost upwards of $500 in prestige clinics.

“In my practice, I see a lot of people who didn’t need any facial filler because they were heavier people,” said Dr. Corey L. Hartman, a board-certified dermatologist with an aesthetic practice in Birmingham, Alabama. Now, those same patients are starting to request volumising treatments to replenish what Ozempic has taken away.

Plump It Up

The idea of roundness as desirable is an about-face from the contouring era that’s persisted since the mid 2010s, where sculpting ruled supreme. Popularised by social media influencers and celebrities, contouring accentuates shadow and definition, giving the face a sculpted look. In its heyday, cosmetics brands like Anastasia Beverly Hills and Fenty Beauty rushed to add sculpting sticks, palettes and kits to their line-up. In 2022, the craze went even further, with a procedure known as buccal fat removal, which can cost around $9,500, becoming popularised. A permanent, surgical procedure, it slims down the fat pads in the cheeks for more angular appearance.

But now some of those same patients are looking to be re-plumped. The likes of Dr. Hartman and Dr. El Muntasar can offer a range of procedures, including injectable dermal fillers composed of hyaluronic acid to give instant volume or bio-stimulating injections such as Sculptra, which can cost upwards of $1,000 per syringe, that help the skin produce more collagen to replenish what’s lost.

Dr. Hartman noted interest in Sculptra in his clinic is up threefold this year alone. Lisa Goodman, founder and chief of the bicoastal Goodskin Clinics pointed to the rising popularity of a treatment called Renuva — around $1,800 per syringe in some clinics — that stimulates the production of fat. Goodman said that clients view it as more holistic, or less fake, “because it stimulates your own fat cells, rather than just filling with pure volume.”

For Dr. Robert Schwarcz, an oculofacial plastic surgeon based in New York’s well-heeled Upper East Side, Ozempic has meant a change to an old faithful: the facelift. For a facelift to look natural, there still needs to be a good amount of volume under the skin to play around with. “Oftentimes, [patients] now just don’t have enough fat on their face,” he said. Instead, he has to harvest the fullness from other parts of the body via a fat graft.

The volumisation side of Dr. Schwarcz’s practice has expanded 25 percent, including client requests for fillers and fat grafting.

The Investment Opportunity

Aesthetics clinics and medical spas are in a strong position to capture residuals from the Ozempic boom. Research from consulting group McKinsey & Co. indicates that the US beauty services sector is expected to grow by 7 percent per year up to 2027, nearing $80 billion as a sector.

With a flood of new Ozempic patients looking for the next facial filler, clinics are expected to become more attractive investment targets. Just last year private equity juggernaut KKR took a minority stake in SkinSpirit, a US chain specialising in injectables.

Investors favour aesthetics practices due to their relatively straightforward financial modelling. Once a business has a certain number of units open, it’s easy to predict how many more can be opened in five years, providing the clinic concept is proven. What’s more, consumers show no signs of cutting back — partly because they can’t self-administer fillers like they might DIY a manicure, but also because it’s become normalised. A 2022 audit by the British Association of Aesthetic Plastic Surgeons (BAAPs) showed a 124 percent increase in Botox treatments against the previous year.

Dr. Hartman added that for the best results, bio-stimulating treatments require a few sessions, spaced apart. That’s more chargeable chair time for the proprietor.

There’s also the fact that one change often begets another. “[Patients] often come in towards the middle of their weight loss. And they say, ‘How do I make my face match my body?” said Goodman.

A limited-edition Royal Oak watch and co-branded merch line are set to be revealed Friday.

Swiss luxury watch brand Audemars Piguet is set to renew its longstanding ties to American pop culture with the release of a watch collaboration with hip-hop star Travis Scott and his label Cactus Jack Records.

In partnership with Scott, Audemars Piguet will release a limited-edition version of its Royal Oak watch Thursday in a new ceramic, as well as putting out a capsule collection of co-branded merchandise from the Swiss watchmaking house and Cactus Jack.

The new watch will be formally unveiled this evening and will feature a number of motifs from Scott’s Cactus Jack label, including a moon phase decorated with a luminous version of the hip brand’s logo — a smiley face with its mouth sewn shut.

“Travis could raise an army,” said Audemars Piguet’s chief executive François-Henri Bennahmias in an exclusive interview with The Business of Fashion. “He’s got such a power. People follow him in a major way.”

Scott, 32, is one of the most successful hip-hop artists of his generation. His fourth studio album Utopia, released in July, had more than 650 million global streams in its opening week, making it the most commercially successful hip-hop album of the year.

The collaboration is likely to be remembered not just for a wristwatch co-designed by Scott, but for the collection of hoodies, T-shirts, jackets, pyjamas, shorts and caps sold through Scott’s own e-commerce platform.

“People will go nuts when they know that AP and Travis have made merch together,” said Bennahmias. “It breaks pretty much every code. Is it going to be successful? We could have multiplied the quantity by at least 10 times and still been successful.”

Audemars Piguet, Bennahmias said, would make “zero” profit from the clothes and accessories, which instead will fund charities including the Cactus Jack Foundation, which grants scholarships to disadvantaged young people.

The collaboration will also be remembered as François-Henri Bennahmias’s swan-song before he retires from the role of Audemars Piguet’s chief executive at the end of this year, a post he took up in 2012 having joined the company almost 30 years ago.

Bennahmias is recognised as one of the watch industry’s most disruptive and influential figures, transforming the family-owned company from a dusty high-end watchmaker into one of the most recognised and in-demand names in luxury.

It was Bennahmias who, while running the company’s US operations, brought it together with Muhammad Ali and Arnold Schwarzenegger for the Time To Give auction in the year 2000, and then forged an unlikely alliance to street culture with the Royal Oak Offshore Jay-Z 10th Anniversary in 2005, a watch collab widely considered by industry observers to be a tipping point for the typically conservative Swiss watch industry.

AP has since continued to align itself with popular culture, nurturing high-profile relationships with stars of film, music, sports and the arts, including LeBron James, Kevin Hart and Ed Sheeran, powering rapid sales growth for its watches which have an average price of 42,000 Swiss francs ($47,970).

Bennahmias said he expects Audemars Piguet’s 2023 revenues to grow by around 200,000 Swiss francs to top 2.3 billion Swiss francs ($2.6 billion).

The partnership with Scott might have been announced sooner. In June this year, a Texas grand jury declined criminal charges brought against Scott after 10 people, including a nine-year-old girl, were killed in a crush at a festival he founded in 2021. Scott was widely criticised for his response to the Astroworld Festival disaster. Bennahmias declined to comment on the incident, but said that Audemars Piguet had waited until the jury’s decision before activating the collaboration, having first met Scott in 2020 when he was a client.