Reiterate BUY Euronext, +2.3% ABS
Rights finished trading yesterday – despite Bloomberg saying today – results set for 12th May
As reducible orders were possible it was trading through terms on the optionality – this should mean that not much of a rump will be left to place (rights not taken up)
Already seeing some strength today and the spikes that have been happening in the auctions did not happen for the open which indicates the short pressure during continuous trading has subsided
New shares start trading on 14th April
J-curve timing and valuation are compelling as the company had strong 1Q earnings which seems to have gotten lost in all the focus around the rights issue
BUY Euronext, J-curve timing and valuation upside just right for a +15% pop
Tuesday • 04 May 2021 • 17:51
*With the company now closing the rights issue to fund the Borsa Italiana transaction we see the cards lining up for a decent jump
*Borsa Italiana acquisition accretive immediately – and now the company is well positioned for further M&A and leaving potential further upside to any valuation as they are set to become a structural winner
*Rights currently trading 70bps through terms as arbs are buying up rights to get access to the allocation of the rights not taken up – short interest is therefore huge the ENX ords with 90 days of vol shorted
*The company had strong 1Q earnings as well which seems to have gotten lost in all the focus around the rights issue
*Timing just right now from a rights issue pop type of trade as well, normally we start to see the selling pressure subsiding around now which should position the stock for a nice pop over the next – rights stop trading on 6th May
*Valuation looking see the stock trading at a 15% discount to our DCF valuation and a 25% discount to its peers