Europcar - Finally
All,
Please refer to our unchanged analysis here.
After initially positioning ourselves for a VW take-out ahead of the restructuring, it is finally here - only that we sold after the German OEM did not bite last year. Clearly, we have missed that trade, despite being bullish on the business.
Strategic Valuation:
At 50 Euro cents per share, the acquisition values the company at an astronomic multiple of whatever future earnings we might want to pick. We have been writing about the strategic importance of Europcar in a market moving towards shared ownership, leasing, short-term rentals, and electrification and won’t repeat all that here.
Change of Control:
In our opinion VW should aim to fully control Europcar to extract the most value for its own benefits. We are therefore expecting a change of control and with that a refinancing of the cap structure, including the EC Finance bonds.
Positioning:
We still hold a small position in the EC Finance bonds and a VW take-over should provide our exit.
Shelf:
The restructuring lies behind us and a VW take-over will clear the decks all round. So we are not anticipating doing further work on the name.
Here to discuss,
Wolfgang
E: wfelix@sarria.co.uk
T: +44 203 744 7003