David Marcus, Chief Investment Officer, Evermore Global Advisors, presented his investment thesis on Bolloré at European Investing Summit 2016. Here’s a snapshot:
BOLLORÉ (Paris: BOL), founded in 1822, is a conglomerate based in France, involved in various businesses: transportation and logistics businesses in Africa, Europe, and Asia; port concessions in Africa; batteries for electric cars, etc. The company has controlling stakes in media assets (Vivendi and Havas) and other investments in listed companies. The company has an aggressive value creator at the helm in chairman and CEO Vincent Bolloré who has a track record of creating substantial value for shareholders. Simplification of the company’s complicated structure creates potential upside, as Bolloré pursues asset sales, operational restructuring of acquired businesses, stock buybacks, and spinoffs. As of the latest filing, the company has 15.3 million shares in treasury stock (0.5% of total outstanding shares). Once all iterations of circular ownership have been accounted for, the “treasury stock” effect is actually closer to 54%. Elimination of the treasury shares implicit in the crossholdings will be very accretive to Bolloré’s net asset value. Bolloré also offers investors indirect exposure to Africa, as 50+% of NAV is exposed to that continent. The shares trade at 55-64% discount to David’s estimate of intrinsic value.
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David Marcus has more than 20 years of experience in the investment management business. He began his career at Mutual Series Funds, mentored by renowned value investor Michael Price, and rose to manage the Mutual European Fund and co-manage the Mutual Shares and Mutual Discovery Funds. He also served as director of European Investments for Franklin Mutual Advisors, LLC. After leaving Franklin Mutual, David founded Marcstone Capital Management, LP, a long-short Europe-focused equity manager, largely funded by Swedish financier Jan Stenbeck. When Mr. Stenbeck passed away in 2002, David closed Marcstone and then co-founded a family office for the Stenbeck family; as an advisor to the family, he advised on the restructuring of a number of the public and private companies the family controlled. He later founded and served as managing partner of MarCap Investors LP, the investment manager of a European small cap special situations fund, which he managed from 2004 to 2009.