Update: CBD gets another offer for Exito
Risk/reward now more attractive?
Hello Absolute Value Readers!
I am back with a quick update on CBD. I hope that this is value-additive.
Let me know if you have any thoughts or questions.
If you missed the original CBD write-up, please find it here:
I wanted to provide a quick update on CBD, as there have been many developments in the past couple of weeks.
Here’s a quick recap of what’s happened in the past few weeks:
June 28 - Colombian Billionaire, Jaime Gilinski, launches a low-ball bid for Almacenes Exito, at a value per share of COP 2,800 (vs. the market at COP 4,200). The board of CBD/GPA quickly rejects the deal.
June 28 - A Brazilian publication speculates that there might be interested parties for the GPA grocery business (core GPA).
July 3 - CBD/GPA provides an update, stating that the spin-off remains in place but has been slightly delayed. They aim to complete the spin-off by mid-Q3 (implying before August 15th). CBD successfully files a 20-F.
July 10 - A newspaper in Brazil breaks the news that Gilinski is looking for financing to launch a higher bid. They also note that Cencosud, the Chilean retail/grocery chain, is working on its own bid for Exito at a $1.2B USD valuation and has the financing for it.
July 18 - Jaime Gilinski makes a revised bid for Exito at a valuation of $1.15B USD, implying a per-share value of COP 3,720 (still ~11% below the market price of COP 4,2000).
So where does this leave us?