CP €3.77. Blue Sky valorisation: €7.42
SUPERB TRACK RECORD
Vincent Bolloré took over the management of the family company in 1981 as it was on the verge of filing bankruptcy: 35 years later BOLLORE is valued at €11.2bn. CAGR from 1991 is an impressive 11.8% on current price vs. 14.9% for Berkshire Hathaway which trades at 50% premium to NAV! If one puts the same premium for BOL, their CAGR are exactly the same !!! Like Mr. Buffet, Mr. Bolloré is a very patient investor.
He has announced his retirement in 2022 for the 200 year anniversary of the company and will most likely further/fully streamline the company by that time which should eliminate the discount to NAV.
The Bolloré family controls 53.9% of BOL FP.
|Investing in Bolloré is betting: (1) on the long term growth of Africa which account for about 50% of co ebitda, streamlining the communication pole with Havas, Mediaset, Canal+ and Vivendi which account for more than 40% of the market capitalisation (SOP stands at €22/share, blue sky 30/share) and the development of electrical mobility (Blue Solutions) through electric cars, car sharing, electric buses.
In other words: it is a trade off between being a minority shareholder in an opaque structure and investing in a success story with a €8bn+ portfolio of quoted assets (see attached SOP).
Africa is key to Bolloré as it generates about 25% of revenues, 50% of ebitda and 65% of ebit. Global growth is expected to be substantially stronger in 2017 which should disproportionally benefit Africa. The company is in Africa for the past 30+ years and is principally involved in logistic (shipping and rolling stock).
The chips are moving with the recent news on the stake built up in Mediaset (28.8% stake or €1.4bn) and the potential sale of Havas to Vivendi. The sales of Havas’ stake (58% or €3.6bn) to VIV FP would allow BOL FP to bring back its net debt/equity (€4.5bn or 50%+) to the guided levels of 30/40%. It is also rumoured that Vivendi could finance the purchase of Havas and Mediaset with the sale of Telecom Italia (23.9% stake or €3.9bn) and the €1bn net cash position. Bolloré will most likely increase its stake in Vivendi through an exchange of Havas for cash and shares since the co., can’t go above 33% stake, which would trigger a mandatory bid.
A merger of Mediaset and Canal+ would allow for large synergies in programming and distribution, creating value for both Vivendi and Bolloré.
In recent statements the Bollorés have stated that Vivendi and Havas are already working together, which is their way of saying that a bid is coming. The bid premium will not be more than 10% as it would trigger an AMF investigation but Havas will most likely outperform its peers over the short-term.
TP €5.50. Upside of 45%+
DIDIER BODART (email@example.com)