EUR 100.00 For Business Accounts Only

NEINOR HOMES: CONFERENCE CALL ON THE MERGER WITH QBT (ANÁLISIS BANCO SABADELL)

Highlights from the conference call:
 Valuation: The company has approached the transaction as an asset deal and expects to buy at appealing prices per square metre: finished product at € 1,400/m2, under construction product at € 855/m2, fully permitted land at € 130/m2, and strategic land at only € 12/m2. They expect this portfolio to generate € 448 M of cash and believe that the return might be 3x the invested equity.
 Synergies: The company has not provided any details on synergies aside from mentioning that it expects €>30 M of fiscal synergies linked to QBT’s tax credits.
 Dilution on HOME shares: Given that the company will cancel a number of own shares equivalent to ~6% of the total, they believe that there will hardly be any dilution for its current shareholders.
MARKET IMPACT
We believe that the transaction makes strategic and financial sense for HOME, which will expand its land portfolio considerably at a good price with a limited amount of new equity. We understand that QBT’s high leverage might triggered some urgency to sell, which cannot be extrapolated to the rest of the listed players, and thus we do not expect this deal t have a significant impact on the rest of the market. We see Metrovacesa as especially inexpensive, trading at a -63% discount to NAV.