Richemont
Note: This is a daily stock update and the information stands true as of 07/10/24, 09:00 CET.
Company Update:
Expert Opinion:
YNAP was a disastrous acquisition and getting rid of it , even for a massive loss is good news. While we still had a positive value in our Net Asset Value for YNAP (but only 1% of our NAV) , I believe the market will consider that as a minor event. Richemont trades in line with the sector (excluding Hermès). However, the recent interest by Bernard Arnault in Richemont and the need to find a solution on the complex shareholding situation (the family owns 10% of the company but has 51% of the voting rights) provides an interesting potentially speculative appeal. We have a reduce rating with no upside but I see less downside on the name than for others in the sector.
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Company Update:
Richemont finalized the disposal of YNAP (YOOX Net-a-Porter) to Mytheresa.com, a German but US listed entity with a market cap of $370m.
Richemont will bring in the YNAP operation debt free as well as €555m in cash (c$610m). The deal will be paid in new Mytheresa shares and Richemont will own a 33% stake in the company.
Richemont will also provide YNAP with a six-year €100 million revolving credit facility.
The market cap of Mytheresa post-deal should be around $980m and the Richemont stake is therefore theoretically valued around $330m, meaning that Richemont gets rid of YNAP for a negative equity value of c$285m.
Richemont originally acquired YNAP in 2018 in a deal valuing it at €5.1 billion. They already took a €2.7bn write-down and will take another €1.3bn net asset write-down.
Expert Opinion:
YNAP was a disastrous acquisition and getting rid of it , even for a massive loss is good news. While we still had a positive value in our Net Asset Value for YNAP (but only 1% of our NAV) , I believe the market will consider that as a minor event. Richemont trades in line with the sector (excluding Hermès). However, the recent interest by Bernard Arnault in Richemont and the need to find a solution on the complex shareholding situation (the family owns 10% of the company but has 51% of the voting rights) provides an interesting potentially speculative appeal. We have a reduce rating with no upside but I see less downside on the name than for others in the sector.
For daily updates, subscribe to our newsletter and for detailed daily updates, reach out to us at sales@alphavalue.eu
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