EUR 100.00 For Business Accounts Only

IBERIAN DAILY 19 NOVEMBER (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: FLUIDRA, PRISA.


MARKETS YESTERDAY AND TODAY

Stock markets rise
The European stock markets reeled in the losses from the early session after a positive opening in the US and despite Hungary and Poland standing firm in their blockade against the Recovery Fund. Thus, within the Euro STOXX, Financial Services and Travel & Leisure rose the most vs. Household Goods and Industrials, which were the worst relative performers. In the US, the residential sector data were a mixed bag, with housing starts climbing above expectations and building licences disappointing. In US business results, Loewe’s and NVIDIA came in better than expected.
What we expect for today
European stock markets would open with slight drops that could aggravate throughout the session, putting an end to the euphoria from the past days against a backdrop where new Covid-19 cases and restrictions continue to increase in the US, Europe and now also in Asia (ex China) and awaiting the approval or possible blockade of the European Recovery fund by Poland and Hungary. Currently, S&P futures are flat (the S&P 500 closed down -1.3% vs. its price at the closing bell in Europe). Volatility in the US increased (VIX 23.84). Asian markets are trading with mixed results (CSI 300 +0.4%, Japan -0.4%).
Today, there will be a videoconference of the European Council. Also we will learn in the US, the weekly jobless claims, November’s Philadelphia Fed index and October’s second-hand home sales. In US business results, Intuit and Ross Sotes, among others, will release their earnings. In debt auctions, Spain (€ 2.5 Bn of bonds due 2026 and 2027), France (€ 10 Bn in bonds due 2023, 2026 and 2027, and I/L bonds due 2026 and 2036), and Ireland (€ 750 M in 6M T-bills).


COMPANY NEWS

FLUIDRA. Accelerated placement of 6.2% of the share capital by Rhône Capital (38% of share capital before the placement). SELL.
Yesterday, Rhône Capital closed an accelerated placement of 6.2% of the company (vs. 5.5% initially announced). The fund remains the control shareholder with a 32% stake at € 16.50/sh., meaning a -4.2% discount/+11% premium vs. our T.P. (€ 14.87/sh.). In this placement, Fluidra acquired 0.5% of the share capital, which will be used to remunerate its management team. The positive news is that FDR has increased its free float to 34%. The negative news, already known, is that there will be more placements, as we understand that the fund’s temporary and yield targets have already been met (~+100% since its arrival in November 2018). The remaining shareholders are: Boyser 8.13%, Edrem 7.77%, Dispur 7.07%, Aniol 5.84% and Puig 5%.

PRISA. Blas Herrero’s bid for press and radio assets. SELL.
Blas Herrero (Kisss FM), along with a group of investors, would have launched a bid (open to the participation of PRS’s current shareholders) to get hold of PRS’s radio and press business for more than € 200 M (vs. € 282 M BS(e)), meaning 2.6x and 5.2x 2021e (vs. 7.4x BS(e)). The interest arises despite the sharp drops seen in 9M’20 Results (-32% in press and radio sales vs. 9M’19 and € -23.2 M in eBITDA vs. € 42.9 M in 9M’19). The valuation is very low, in our view, hit by the strong impact from Covid-19 and the possible restructuring measures to adapt the businesses. The debt level remains at high levels (€ 792 M NFD and 6.7x NFD/EBITDA post sale of Santillana Spain and refinancing), this sale would reduce NFD by -25%, still leaving the leverage ratio at around 4.5x.