Nestle M&A, Walmart Mexican bribery, SIAS
Both remaining large caps of the portfolio, Walmart and Nestle had some big news today.
Seems to be involved in a bribery scandal in Mexico which they tried to cover up on company level.
There is very good coverage of the legal aspects at the FCPA Professor blog (part 1, part 2).
A commentator speculates that this would end in a fine of 100 mn USD, I have no idea if this is realistic or not. In any case, I will sell Wal-Mart as soon as I find something else.
Nestle paid 11 bn USD for Pfizers baby food division, a 19.8 (!!!!) EV/EBITDA multiple after a bidding war with Danone. No doubt, Nestle is a great company, but for my taste at a current 12xEV/EBITDA, a lot of positive developement is already priced in.
So with the VWAP of today (after cashing in the dividend), I will sell the Nestle position at today’s VWAP.
Originally, this was a pair trade with Green Mountain as short psotion. For the time being I will keep the Green Mountain short open.
SIAS went ex dividend today, howver loosing some more. In order to take adavantage of the low price, I will reinvest the Dividend proceeds at today’s VWAP.