market folly

We're posting up notes from the Sohn London investment conference.  Next up is Catherine Berjal of CIAM who presented a long of Accor (EPA: AC).


Catherine Berjal's Sohn London Conference Presentation

Long Accor (EPA: AC)

CIAM is an activist but Accor is not currently an activist position.

Accor is the perfect target for Private equity. PE like the travel and Tourism sectors because of the high returns on capital. In particular, they like the hotels businesses as they are: asset-light, scalable, it’s easy to bring in new management, there are often opportunities to sell off assets.

Accor is a European leader in hotel management. It’s the sixth largest hospitality conglomerate worldwide with 5000 hotels and is the market leader in Europe and the Middle East.

It has above average cash generation. EBITDA will grow at 14% CAGR over the next 5 years.

There are multiple opportunities for a PE firm to unlock value: sell non-core assets, sell luxury brands. A PE takeover would bring 50% upside from the current share price. CIAM will support a PE takeover at the right price.

Write-downs in recent years have scared investors off. Accor is undervalued and out of favour. A sum of the parts valuation suggests 30% upside.


Be sure to check out the rest of the presentations from Sohn London conference 2019.