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A 49% gain on Unbail-Rodamco with a bonus capped in 9 months

Led by the duo of Xavier Niel and Léon Bressler, a group of shareholders comprising 4.1% of the capital of the property company will try to oppose the very dilutive capital increase of the property company.

We had no luck on our last “derivative stock advice on Unibail-Rodamco Westfield.” Recommended on this site on April 22, the capped bonus issued by Société Générale (code: FR0013503760) with a deadline of September 25, 2020 and with limits located at 35 euros for the lowest and at 85.50 euros for the highest was deactivated mid-September. The action of this shopping center real estate company effectively broke the threshold of 35 euros when management presented its “Reset” plan intended to strengthen its balance sheet to cope with a rise in debt with the depreciation of the value of the centers following a drop in client attendance and requests to renegotiate rents from tenants, or even their bankruptcy. The pressure remains strong on the real estate with the surge of the second wave of the epidemic in Europe but a group of shareholders united around two respected personalities, Xavier Niel, the boss of Iliad, the parent company of free, and especially Léon Bressler, the former boss of Unibail, is opposed to the management plan providing for a very largely dilutive capital increase of 3.5 billion. This fundraiser will be put to the vote of the shareholders at a general meeting called on November 10 and the Niel-Bressler duo will try to have it rejected. Instead, these two personalities want to join the board of Unibail and propose to refocus the property on its most beautiful shopping centers located in Europe, which involves a resale of the American subsidiary Westfield bought too expensive.

Reimbursed at 61 euros under conditions

It remains to be seen whether given the current unfavorable seller environment, the company will achieve its goals. In the meantime, the Niel-Bressler tandem is likely to be heard by other shareholders at the general meeting on November 10, given the very large float. The failure of the capital increase and the entry of the two men to the board of the real estate company could encourage further catching up in value and a reduction in the discount. It is thus possible to position on a new capped bonus issued by Societe Generale with a deadline set on June 25, 2021 and two terminals located at 30 euros for the lowest and 61 euros for the highest. The certificate will be redeemed at maturity at its bonus level of 61 euros provided that the Unibail-Rodamco-Westfield share does not drop below the 30 euros threshold by then. Given its purchase price, the product is likely to deliver a 49% gain within nine months. For a controlled risk since in the worst case where the action of the real estate company actually pushes the lower limit of 30 euros of the capped bonus, it will still be reimbursed at the end of June 25, 2021 at the value. Except that the investor will not receive the dividends that the property company may pay to its shareholders. The certificate also does not allow you to remain exposed to a rebound in the share above the bonus level of 61 euros which is the maximum redemption price.

Our advice: buy a Unibail-Rodamco-Westfield capped bonus issued by Société Générale (code: FRSGE001A0G2); deadline: June 25, 2021; terminals: 30/61 euros; parity: 1 share for 1 certificate; price: 40.92 euros; portion: 1.

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