Catherine Berjal Long Accor: Sohn London Conference

We're posting up notes from the Sohn London investment conference.  Next up is Catherine Berjal of CIAM who presented a long of Accor (EPA: AC).


Catherine Berjal's Sohn London Conference Presentation

Long Accor (EPA: AC)

CIAM is an activist but Accor is not currently an activist position.

Accor is the perfect target for Private equity. PE like the travel and Tourism sectors because of the high returns on capital. In particular, they like the hotels businesses as they are: asset-light, scalable, it’s easy to bring in new management, there are often opportunities to sell off assets.

Accor is a European leader in hotel management. It’s the sixth largest hospitality conglomerate worldwide with 5000 hotels and is the market leader in Europe and the Middle East.

It has above average cash generation. EBITDA will grow at 14% CAGR over the next 5 years.

There are multiple opportunities for a PE firm to unlock value: sell non-core assets, sell luxury brands. A PE takeover would bring 50% upside from the current share price. CIAM will support a PE takeover at the right price.

Write-downs in recent years have scared investors off. Accor is undervalued and out of favour. A sum of the parts valuation suggests 30% upside.


Be sure to check out the rest of the presentations from Sohn London conference 2019.

Anne-Sophie d'Andlau Long Euro Disney: Sohn London Conference

We're posting notes from the Sohn London investment conference 2016.  Next up is Anne-Sophie d'Andlau of CIAM who pitched long Euro Disney (EPA:EDL).


Anne-Sophie d'Andlau's Sohn London Conference Presentation

Long Euro Disney (EPA: EDL) 

Euro Disney listed in Paris in 1989 but has never made a profit. The shares are down 99% since floatation. Euro Disney has a complicated ownership structure with Walt Disney US owning 77%.

Euro Disney is the most popular tourist destination in Europe with 15 million visitors per year. The reason it has never made a profit is due to the heavy royalties and management fees it has to pay to Walt Disney US. Net income has always been negative. The licensing fees are three times the accepted market practice. Without the fees, Euro Disney would be as profitable as other Disney theme parks. Euro Disney has a long history of restructurings. Shareholders have been diluted by around 9x. CIAM estimate that over the last ten years Euro 930 million has been overcharged by the Walt Disney company.

About 18 months ago, Walt Disney launched a minority buyout to take Euro Disney private at $1.25 per share, a price that d’Andlau described as ridiculous.  It was after the buyout proposal that CIAM got involved.

The Euro Disney business is divided into two segments.

-    Resort activities: theme parks, hotels

-    Real estate

CIAM have identified unrecognised value in the real estate assets of about Euro 1.9 billion or about half the land value of Euro Disney. This valuation is not included in the company accounts or in the takeover documents. CIAM think the takeover price should be 3x higher. This has led CIAM to take 3 actions.

-    They opposed the minority buyout by Disney US to take the company private at $1.25. Euro Disney is still listed. They are challenging the regulator who gave the deal the go-ahead in the Supreme Court.

-    In the Criminal Court, they are taking judicial action against Disney US for favouring Disney shareholders over Euro Disney shareholders. More specifically they are accusing Disney of the misuse of corporate assets, the publication of misleading accounts and managing a company for the sole interest of the majority shareholder.

-    CIAM is also taking a civil case to try to recover the Euro 930 million that they believe has been siphoned off from Euro Disney over the last 10 years.

Be sure to check out the rest of the Sohn London conference presentations here.