Nice analysis. I did something similar last year (with similar outcome), but one thing I struggled with are the cash positions.
Firstly, I am not certain that the the cash positions for the illiquid subsidiaries (cambodge, rouen etc) are not also consolidated into Bollore/Odet, so that you may be counting them twice in your analysis. But you probably have more financial understanding than me to determine if this is the case.
Secondly, it would be very interesting (needed, actually) to look at the cash positions of the other companies as well. Their annual reports must be available somewhere (at the French depository of company accounts?).
For instance, I found an annual report of Terres Rouges, which stated 291M€ net cash in 2021, and also indicated that Terres Rouges has a direct holding in Odet (size unspecified) which is not in your schedule.
Thanks for this excellent write-up. The group structure is indeed extremely complex and probably the main reason for the big discount to the net asset value. My guess is that the discount at the Bollore SE level is not even fully understood by the professional investment community.
While share buybacks are certainly value accreditive, they are not really helping in this regard. You made a fair point that collapsing some of the holding layers would be helpful to increase visibility.
But which of the layers could be eliminated without a loss of control and potentially negative tax consequences for the Bollore family?
And more importantly, what would be the potential tax consequences of such transactions for minority shareholders?
The spin-off of UMG for example was treated like a dividend distribution for French minority shareholders at the Vivendi level, while it was tax free for Bollore SE because it's holding was above 5% and therefore tax exempt. So interests seem not fully aligned here.
- What do you think of the fairness opinion in the tender documents? They valued the circular ownership around 8b and came up with a NAV around 8 euros before holdco discount.
- Can't ODET squeeze out minority shareholders whenever they want?
Interesting. What I don't understand........ I checked the Tradingview Charts -> 1 Year
Vivendi: ~ -21
UMG: ~ -14
Bollore: ~ +20
ODET: ~ +33
So do I miss something here? The discount collapsed a lot the last year? As you hold ODET congrats to this decision. I would personally feel actually a bit late to the party.
Hello Carsten,
Nice analysis. I did something similar last year (with similar outcome), but one thing I struggled with are the cash positions.
Firstly, I am not certain that the the cash positions for the illiquid subsidiaries (cambodge, rouen etc) are not also consolidated into Bollore/Odet, so that you may be counting them twice in your analysis. But you probably have more financial understanding than me to determine if this is the case.
Secondly, it would be very interesting (needed, actually) to look at the cash positions of the other companies as well. Their annual reports must be available somewhere (at the French depository of company accounts?).
For instance, I found an annual report of Terres Rouges, which stated 291M€ net cash in 2021, and also indicated that Terres Rouges has a direct holding in Odet (size unspecified) which is not in your schedule.
Thanks for this excellent write-up. The group structure is indeed extremely complex and probably the main reason for the big discount to the net asset value. My guess is that the discount at the Bollore SE level is not even fully understood by the professional investment community.
While share buybacks are certainly value accreditive, they are not really helping in this regard. You made a fair point that collapsing some of the holding layers would be helpful to increase visibility.
But which of the layers could be eliminated without a loss of control and potentially negative tax consequences for the Bollore family?
And more importantly, what would be the potential tax consequences of such transactions for minority shareholders?
The spin-off of UMG for example was treated like a dividend distribution for French minority shareholders at the Vivendi level, while it was tax free for Bollore SE because it's holding was above 5% and therefore tax exempt. So interests seem not fully aligned here.
Great article ! Everyone (including me) is waiting for the galaxy simplification. Who know when it will happen...
Great work. Two questions:
- What do you think of the fairness opinion in the tender documents? They valued the circular ownership around 8b and came up with a NAV around 8 euros before holdco discount.
- Can't ODET squeeze out minority shareholders whenever they want?
Interesting. What I don't understand........ I checked the Tradingview Charts -> 1 Year
Vivendi: ~ -21
UMG: ~ -14
Bollore: ~ +20
ODET: ~ +33
So do I miss something here? The discount collapsed a lot the last year? As you hold ODET congrats to this decision. I would personally feel actually a bit late to the party.