DJE Real estate fund – follow up
This is the great thing about blogging: I get direct feedback which (hopefully) improves the analysis.
Following up the intitial post about the DJE fund, some readers emailed me some very important facts and issues.
Category Archives: Opportunities
Special Situation: DJE Real Estate fund (LU0188853955) in liquidation
EDIT:I have changed some parts of the Post, especially with regard to the summary and the risk section !!!
Preliminary remark: a reader emailed me this idea, thank you very much. But please don’t forget: This is not meant as an investment advise, please do your own homework !!!! I might own already shares of any discussed inevstment personally and many of the invetsments discussed are relatively illiquid.
(Ehemals) Offene Immobilienfonds vs. Immobilienunternehmen ?
Halil hatte ja folgende Frage in einem der Degi Artikel gestellt:
Der Degi International hat eine Immobilie in Paris über dem Buchwert von 114,8 Mio. Euro verkauft.
Es waere schön, wenn du noch einmal eine aktualisierte Einschaetzung abgeben könntest. Ich habe gekauft und halte das Chance-Risiko-Verhaeltniss hier für sehr gut, da mir das Abwaertspotenzial begrenzt zu sein scheint.
Mein Problem ist momentan, dass ich mir nicht sicher bin ob nicht die großen Immobienunternehmen eine interessantere Analgemöglichkeit sind wenn man Immobilienexposure haben will.
Schaut man sich z.B. die Werte an die im Euro Stoxx 600 drin sind sieht man, dass man auch hier recht renomierte Unternehmen zu ordentlichen Abschlägen auf die NAVs bekommt:
| Name | Price to Book Ratio |
|---|---|
| IMMOFINANZ AG | 0.35 |
| GECINA SA | 0.53 |
| FONCIERE DES REGIONS | 0.61 |
| WERELDHAVE NV | 0.65 |
| CORIO NV | 0.67 |
| EUROCOMMERCIAL PROPERTIE-CV | 0.69 |
| COFINIMMO | 0.79 |
| ICADE | 0.96 |
| UNIBAIL-RODAMCO SE | 1.05 |
| KLEPIERRE | 1.55 |
Einer der großen Vorteile der Immobiliengesellschaften ist, dass sie jetzt nicht verkaufen müssen, sondern evtlk. schnäppchen machen können.
Sehr interessant ist z.B. Corio, einer der führenden Einkaufszentren Betreiber mit einer Dividendenrednite von fast 9%.
Fazit: Bevor ich wieder in DEGI, AXA und Co einsteige, sollte man sich auch die Immobileinunternehmen nochmals genauer anschauen.
Einige sehen auf den ersten Blick durchaus interessant aus, wenn man Immobilienexposure im Portfolio haben möchte. Die Bewertungen scheinen mir vergleichbar zu den Abwicklungs OIs zu sein.
EMAK SpA – results of subscription rights exercise period published
Many thanks to Winter who linked in the AZ Forum to the results of the exercise period for the subscription rights.
In total almost 99% of the subscritption rights have been exercised.
During the subscription period, which began on 21 November 2011 and closed on 13 December 2011, 26,976,676 rights were exercised, corresponding to an aggregate of 134,883,380 Shares subscribed, equal to the 98.974% of the 136.281.335 Shares offered in the context of the Capital Increase, for a total amount of euro 57,325,436.50.
It looks like that my Paranoia Scenario was indeed only paranoia:
In accordance with the commitment undertaken on 5 August 2010, Yama S.p.A. has exercised all the rights to which it was entitled in the context of the Capital Increase and in relation to all Emak S.p.A. shares it owns (corresponding to the 74,285% of the share capital of Emak S.p.A. and to the 75,368% of the share capital excluding the treasury shares owned by Emak S.p.A.).
Consequently, Yama S.p.A. subscribed 102,712,500 Shares, for a total amount of euro 43,652,812.50.
Following the subscription of the Capital Increase, Yama S.p.A. will hold the 74.285% of the total share capital of Emak S.p.A. (corresponding to the 75.368% of the share capital excluding the treasury shares owned by Emak S.p.A.).
It looks like YAMA has exercised exactly the number of rights they got from their initial stake and they did not sell or buy any subscription on a net basis.
So for the moment it looks more like really bad execution than an evil genius trying to squeeze out the minority shareholders.
Bad research – Whitney Tilson edition (Netflix, US Banks)
Yesterday I linked to an Interview with Whitney Tilson, which in my eyes disqualified Tilson as a really great investor.
The first issue was Netflix.
Read more
AIRE KGaA, Microsoft and Frosta AG
A few short updates:
Microsoft:
As announced, I sold the shares at USD 25.51 or EUR 19.02. IIncluding the quarterly dividend received, the total gain was around 4%. Almost all of the gain is a result of the USD appreciation, as I bought the shares at USD 25.88 and an exchange rate of 1,41 USD/EUR.
Read more
Autostrada Q3, EMAK and Microsoft
Autostrada
Already some days ago, Autostrada has published their Q3 report and a corresponding Invetsor presentation.
In short, despite a small decrease in overall traffic, profits YTD increased in line with tarrif increases at around 9%, however with a lower increase YOY in Q3. In the quarterly report is mentioned, that the expected IPO of the South american participation seems to be delayed. The call it “examining all options”.
Read more
EMAK SpA – Showdown
It seems that someone is working hard to achieve the “Paranoia Scenario”for the EMAK capital increase.
Today, a whopping 877 thousand shares have been traded. The intraday chart looks really weird, I don’t remeber having seen anything close.
Tomorrow, December 6th is the last trading the for the rights. So it will be interesting to see if there will be even more selling pressure in the EMAK stock.
EMAK SpA – The paranoia edition
In the last days I analysed the strange behaviour of the EMAK shares since the subscription rights started to trade (Part 1, Part 2).
Just to remember: On Friday 18th, before the subscription period, the Stock traded at ~ 2,10 EUR. This equals 0,75 EUR after the split of the subscription rights.
Since then, the stock systematically trades down towards the exercise price of the subscription right (0,425 EUR).
Remark: A lot of the available charts do not correctly adjust for the subscription right. The correct historical chart can be found for instance at Borsa Italiana directly.
So what is happening here ? In my opinion one has always to ask: Do I miss something here ? Or to put it another way: Does someone have a strong incentive that the price will go below the subscription price by the end of the subscription period ?
If we go back one step, we should ask addtionally: What was the purpose of the whole exercise anyway?
When I read the announcement that the majority shareholder Yama SpA wants to sell his other holdings to EMAK, my first reaction was: they need cash. However after disclosing that they will take up their share of the capital increase, the cash effect for the shareholder was relatively small.
Another reason could be the following: Maybe Yama’s real intention is to scare away minority shareholders and take over the minority shares as cheap as possible ?
Lets consider the following:
For a squeeze out in Italy , they need according to this document 95% of the company.
Before the rights issue, Yama held 74% or 20.5 mn shares of a total 27.6 mn shares.
After the exercise of the subscription right, we will hav a total amountof 163.9 mn shares (5 new for 1 old minus Treasury shares).
In the past trading days since beginning of the subscription period, a total of 1.05 mn shares have been trades for around 600 Tsd EUR which resulted in a drop from around 0,75 EUR to 0.48 EUR (low intraday today)
So in theory (paranoia scenario), the following could happen:
– Yama is currently selling its own shares to depress the share price below the subscription price of 0.425 EUR (only 4.5 cents to go, they have plenty of material).
– most shareholders then will not exercise the subscription right. Normally the unexercised subscription rigths will be sold for almost nothing in an closing auction at the last day
– Yama buys all the subscription rights and exercises them
This would result in the following change in percentage ownership, assumed that Yama needs to sell another 1 mn shares, to reach this target:
Before:
Yama: 20.5 mn shares, 74%
Minorities 7.1 mn shares, 26%
After: (total 163.9 mn shares)
Minorities 7.1 + 2 mn = 9.1 mn shares or 5.5%
Yama: 20.5 – 2 mn + all new shares (~136 mn) = 154.8 mn shares or 94.5%
So if this works out, YAMA almost reaches the threshold for a squeeze out. If they tehn achieve to hold the shareprice down for a further few months, the might be able to purchase the remainder for a relatively small fee.
Summary: There could be a downside scenario where the majority shareholder has structured this whole exercise to be a clever way of squeezing out minorities at a depressed price level. I am not sure how possible this is, but it should definitely be considered in any investment decision.
IVG capital increase
IVG is an interesting example for a “distressed” company, where the position as Senior bondholder is much more comfortable than being a shareholder.
After announcing relatively good Q3 numbers on which I commented earlier this month, they announced today the following:
The management board of IVG Immobilien AG, Bonn (ISIN DE0006205701) has, with the consent of the supervisory board, resolved to increase the registered share capital of the company from € 138,599,999 by € 69,283,885 by issuing 69,283,885 new ordinary bearer shares.
The new shares will be offered to existing shareholders by means of indirect subscription rights at a subscription ratio of 2:1, meaning that two existing shares will entitle a shareholder to subscribe for one new share. The subscription price is € 2.10.
A lot of people bought IVG shares because they trade well below book value, howver, issuing such a huge amount of new shares at an ever larger discount to book value is a clear dilution for existing shareholders. The result was a 15% drop in the shareprice.
For the 2014/2017 Convertible bond, this is in contrast good news which shows in a steadily increasing bond price:
From my point of view, there are a few take aways from this situation:
– looking at price to book ratios for distressed companies should always include the possibility of massive dilution
– especially when banks are involved who can use loan covenants as a tool the force capital increases, shareholders will normally suffer
– in such cases buying senior bonds at a large discount looks like a much better position compared to stocks
– stock or subordinated debt of distressed companies will only become intersting, once liabilites are reorganized in a way that no refunding is necessary for an extended amount of time (e.g. through long term bond issuance)
In my opnion, we will see more or less similar actions for Praktiker.
value and opportunity 