Thread by @puppyeh1

Hunter Douglas UPDATE $HDG.NA. Great news as acquirer formally drops squeeze out after tender ends w/ abysmally low participation (23% of minorities at 82 EUR).

The go-forward setup is, I think, the is best risk/reward I have seen, in my history in the markets. Why?

👇👇

What did we learn from the tender process?

- the 84% shareholder wanted to pay 82 EUR to acquire all minorities
- a Minority Group consisting of 45% of minorities thought fair value was 150-200 EUR/share
- Add Value fund, a key minority, thinks fair value is 160->200 EUR/share

What else did the tender accomplish?

- Everyone who wanted to sell anywhere near the current price (ie 82), sold. This was ~1.3mm shares
- All other sizeable shareholders of record think fair value is SIGNIFICANTLY higher than current. Not 10%, 20%, - more than DOUBLE....

What else? Two things: 1) absolute valuation is absurdly cheap; and 2) valuation discount to comps is borderline absurd.

1) Imo post-2Q LTM EBITDA is >$830mm. FY21E I think will be ~$900mm EBITDA. At last (86 EUR/share) this means $HDG.NA is at 4.6x LTM, 4.2x FY21E EV/EBITDA...

2) Just in case this doesn't compute, consider that any other biz that even looks close to $HDG.NA is trading on a double-digit EV/EBITDA multiple (Somfy, Nien Made, Spring Window, etc)...we are not talking a turn or two here, the discount is massive....

3) Catalysts. 2Q will be a massive beat (why do you think they wanted to wrap this up now??); as will 3Q and probably 4Q. Also Springs Window is for sale - best direct comp - this will likely print >10x EV/EBITDA in next few months...

Finally $HDG.NA skipped the div last year. I think they earn 13 EUR per share this year, ie its on 6.5x P/E with all other clear comps closer to 20x. I think its on a 6.3% clean div yield EVEN IF there's no special div to catch up for last year...

...and finally lets talk about the obvious rerun of a takeout. Dutch law means Bergson can't come back over for a year (ie until next April) but why would they wait? That's only 10 months away...and obviously they aren't paying 82 or lower...

...which brings us to the MAIN POINT. The downside is basically the stock stays at a massive discount to fair value and Bergson comes back in a year and pays a tiny premium to 82 and all the holdouts give up...which is basically zero real downside...

That is the downside. And what is the upside??

Even if we never smell fair value, $HDG.NA historically traded at a ~30-40% discount to comps...implying something north of 150 EUR and around 190 EUR/share...

But even a bare bones normalized 6x EV/EBITDA - versus comps in the mid-teens - on CY earnings implies 125 EUR/share...

In other words the upside/downside skew is fairly ridiculous on a one-year view. We risk 2-4 EUR/share, for a shot at something like 40-90 EUR/share upside, or a 20-25:1, option-like payout.

This is why today this became my largest position, by a country mile 👊👊

This is no longer an event trade - but it's a post-event, hugely attractive post-event setup. You don't often get the chance to buy mkt-leading franchises w/ clean floats at 4x EV/EBITDA w no debt.

Well done again to all holdouts here. This was the optimal outcome 🤘🤘

DYODD 🙏