DIA Memo 180221
- Understand prospects for DIA to successfully execute its turnaround plan – what natural impediments are there that need to be addressed?
- Understand whether, free float notwithstanding, the c. 15% take-back yield buying DIA’s 2023 SUNs to exchange into 2026 SUNs is attractive or not
- Analysis of DIA’s competitive position within Spain – market share trends, sales densities, LFL sales growth, price positioning and store estate comparisons
- Financial projections, DCF valuation and sensitivities
- Can DIA’s capex-led store refurbishment, store re-sitings and new store openings plan, together with assortment optimisation, reverse market share losses to Mercadona and Lidl and restore DIA to a sustainable financial trajectory?
- Would DEA Finance (a vehicle of majority shareholder, Letter One) sell down its position in DIA’s Exchange 2026 SUNs once the recapitalisation plan is completed by Apr-21 and its sufficient voting position in the 2023 SUNs has been used to implement the exchange of 2023 SUNs into 2026 SUNs with a mixed cash-pay and PIK coupon?
- How much has Letter One invested in DIA’s equity and SUNs over time and what kind of return might it achieve if DIA is successful with its turnaround plan?
- Pro forma for its recapitalisation, DIA’s FY 20E net leverage will be similar to that of Casino France at FY 20E. Casino 2026 SUNs yield c. 5% vs DIA exchange 2026 SUNs c. 15% – is the differential warranted?
- When might DIA be able to contemplate a loan-to-bond refi of its Syndicated Facility should it wish to?
- View, Variant Perception & Recommendations
- Business Overview & Analysis
- DIA In Spain & Its Competitive Position
- DIA In Other Markets & Its Competitive Position
- Historic Financial Analysis
- Financial Model – Projections, Valuation & Sensitivities