de ING ce matin...Commentaires, ça reste compliqué, mais les mauvaises nouvelles sont dans le cours.


AGEAS (BUY, EUR3.1): MCS conversion, another legal battle looms
For further information contact analyst: Albert Ploegh, Amsterdam (31) 20 563 8748 

·       On December 7, in line with the original agreement, the EUR2 mandatory convertible securities instrument (MCS) is converted into ordinary Ageas shares. The holders of the MCS will receive 106.7m Ageas shares (4% dilution). Ageas believes it is entitled to receive EUR2bn in compensation from ABN Amro (in merger process with Fortis Bank Netherlands), or basically the Dutch state (100% owner ABN Amro). Recently, hedge funds that owned a large part of the MCS tried to extend the maturity date of the MCS as hopes that the Dutch State would directly buyback the instrument evaporated. For the owners, that likely purchased the MCS at very depressed prices, this would be quite attractive as it would mean that ABN Amro would have to continue to pay the 8.75% coupon. In our view, an appeal of this ruling is still pending.

·       We believ Ageas has tried to reach a settlement with the Dutch State on the MCS, which apparently failed. Ageas holds ABN Amro liable to pay EUR2bn. Based on the original agreement this payment needs to be settled by an issue of shares of ABN Amro. Thus Ageas could theoretically become a minority shareholder in ABN Amro, which clearly is not preferred by the Dutch State as this would complicate a sale or IPO of ABN Amro at a later stage. Not surprisingly The Dutch State contests this view. Ageas will initiate legal proceedings against ABN Amro (basically the Dutch State) if it fails to deliver the shares. We believe this delivery will not happen thus (another) legal proceeding looms. In addition to the MCS claim Ageas has already a legal appeal pending against the Dutch State in relation to so-called preference shares of EUR0.4bn.

·       The impact of the conversion is that the book value per share will decline from EUR3.90 to EUR3.74 (reflecting the dilution). The shareholders’ equity will remain unchanged at EUR9.6bn and there will be no impact on solvency. The conversion has no impact on our SOTP valuation (base scenario) as we already accounted for the dilution.

·       The failure of reaching a compromise is unfortunate as a legal case is likely time consuming and very distracting. With the many legacy issues outstanding the equity story of Ageas is already complex enough. In addition, the conversion might create an overhang of Ageas shares as the holders of the MCS might want to exit. Moreover following the claim of EUR2bn against the Dutch State we expect the Dutch State also to file counter claims. Earlier the Dutch State already threatened to file counter claims against Ageas in total of EUR275m if Ageas starts a legal proceeding against the Dutch State in relation to the MCS instrument. That said, with the share trading at 50% to book value (partly driven by peripheral sovereign debt worries) we believe this is more than reflected in the share price.

12:04 Écrit par swingteam-cc | Lien permanent | Commentaires (0) |  Facebook |

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