Dufry Furthers Market Consolidation With Autogrill Buy as Demand Improves; Shares Attractive

We are maintaining our fair value estimate for Dufry after the announcement of its acquisition of travel food and beverage company Autogrill. We believe shares remain undervalued. The 50.5% stake in Autogrill held by the Benetton family (Edizione) will be exchanged to Dufry shares (around 29 million new shares would be issued, versus 91 million outstanding at the end of 2021), making the Benetton family the largest shareholder in the entity (around 20%-25% expected stake). The remaining shares will be either offered for exchange at the same conditions or paid in cash at EUR 6.33 per share. The transaction values Autogrill at around 0.7 times 2022 EV/consensus revenue, below the 0.95 revenue multiple for Dufry. Nonetheless, Autogrill trailed Dufry in terms of profitability prior to the pandemic.