All,
Update on the ALHG FP's holding following the AMF disclosure that Financière Agache did exercise its MMB FP's transfer rights.
1/ Conclusion
On June 10th, VIV FP disclosed that it acquired on June 05th, Financière Agache's position in MMB FP (11.2m shares, AMF's filing attached).
Financière Agache did ultimately exercise its MMB's transfer rights (deadline was June 15th).
The recent article suggesting BOL FP acquired Financière Agache's position in MMB FP was wrong.
As a result, VIV FP now owns 13.2% of MMB FP and could own up to 13.8% if the remaining 879m MMB FP transfer rights are exercised.
VIV FP's MMB stake increase has limited impact on its holding discount to NAV which is currently 43.5%.
We believe MMB FP could be worth up to €28.2 per share.
However, Financière Agache's decision to exercise its transfer rights do not play in favor of our opinion on MMB FP's valuation.
2/ MMB FP's updated shareholding structure
MMB FP's shareholding structure is now as per the below:
3/ Potential next step, ALHG/MMB structure collapse
As suggested in our previous note, BOL FP might decide, at some point, to collapse MMB FP and ALHG FP.
Making a basic assumption of an exchange ratio set at no premium to MMB FP's current price and using ALHG FP's current price as a reference, this would Imply an exchange ratio of 11.8 ALHG share per MMB share.
BOL FP would then control 24.2% of ALHG FP's capital (directly and indirectly through VIV FP).
4/ ALHG FP's SOP
Using MMB's current price of €20.1, ALHG is currently trading at a 21.4% discount to its NAV.
However, MMB's current price is not properly reflecting the true value of its assets and it seems as if MMB FP is currently undervalued.
Valuing the Publishing business at 11.2x EV/EBIT 25E and the Travel Retail business at 8.7x EV/EBIT 25E, MMB FP could be worth €28.2 per share or a 28.8% discount to its adjusted NAV.
Applying our MMB valuation, ALHG would thus be trading at a 42.1% discount to its “see-through” NAV.
5/ VIV FP's updated SOP
VIV FP is currently trading at a 43.5% discount to its NAV.
David Darmouni
Equity Sales
Makor Securities London Ltd. | Makor Group
6th Floor, 30 Panton Street, London, SW1Y 4AJ
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