Deal-making Bonanza Monday - WHS! ARV!
This one will be short and cheerful — big letter I wrote in the weekend to come, but the news waits for no one!
ARV — Arvida’s board of directors have unanimously agreed to a takeover — $1.70 per share — acquirer is Stonepeak, the American alternative investment firm. They previously had a $1.70 offer last year that didn’t eventuate. Here we have $1.70 again — stock had previously been trading in the $1.00 range so represents a healthy premium. Vote from shareholders is Q4 — clearly they want to get the deal through. We have previously written up Arvida as an undervalued stock, and previously we questioned why the first offer wasn’t taken. To me this one is a no-brainer — shareholders get significant upside … also shows the inherent value of our other retirement stocks, including Oceania!
No particular preference on the other retirement stocks, but if there was a gun to my head, I’d say OCA, SUM, RYM.
WHS — Not long ago we wrote about Nick Grayston, former Warehouse CEO (albeit chief value destroyer might be a better title). Rebecca at BusinessDesk wrote an excellent piece too — the long and short is that the group managed to burn money on McKinsey, the ill-fated “The Market” project, selling Torpedo7 for $1.00, etc. It’s a litany of failures. So it’s no surprise to see today’s notice — aptly titled ‘DON’T SELL YOUR SHARES’
I don’t blame Tindall for wanting to take the company private — saves it from scrutiny — it’s been completely hammered publicly (and for good reason). On the same token, The Warehouse is already effectively controlled by Tindall — taking it private doesn’t really change the mechanism of the company, aside from not being answerable to aggrieved shareholders.
It doesn’t change the fact that The Warehouse, in its current form, is pallid and unappetizing — nobody wants to buy threadbare leggings, a seemingly random grab-bag of groceries, or retirement home slippers. A long road ahead of them…
WBD — WarnerBrothersDiscovery stock is up +18% in the last five days. WBD is saddled with debt like none of your business (+$40bn). Finally there’s talk of moving that debt around — leaving an OldCo with WBD’s television and cable assets and debt (i.e linear TV), and launching a NewCo with the Crown Jewels — HBO, Warner Brothers, etc. I don’t love the plan (if you’re going to milk those old assets for money, you’re still labouring in the midst of a lollapalooza of debt). I’d prefer a sale of CNN, which is better run by Jeff Zucker, and perhaps a sale of the sports assets — ultimately WBD could become an attractive asset for say, Netflix or Sony to purchase. This may sound like crazy thinking now, but let’s see in five years…
Essilor — Meta is reportedly in talks to buy a minority stake in the eyewear giant. Zuck has always been trying to make wearable electronics call (i.e. glasses — who remembers Google Glass?) — actually, let’s pull up a picture of Google Glass:
It was possibly the least sexy, most cumbersome, slightly skin crawling piece of technology that Silicon Valley has put out in some time.
Anyway — I imagine Zuck will be looking to do a similar thing with the Ray-Ban maker. I’m dubious.
Galliano exits Margiela — John Galliano is exiting Maison Margiela after having a stellar run at the house — a second coming after his fall from grace when he was manning Dior. Speculation in the press that he’ll return to the LVMH fold (there’s also the possibility — low grade I think — that he moves to Chanel). I’ve said it once and I’ll say it again — Galliano is the finest courtier of his generation; behind all the pomp and over-the-top razz-ma-tazz is the work of a very fine tailor with a masterful understanding of cut and drape. Will be a loss to Margiela (owned now by OTB group/Renzo Rosso).
Chart of interest…
