Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

<ul>
<li>The S&amp;P/ASX Index family is a widely-tracked group of indices and sub-indices which represent the performance of ASX-listed companies. </li>
<li>In March 2022, Index rebalance events will take place for the S&amp;P/ASX capitalization-weighted indices including ASX 300, ASX 200, ASX 100, ASX 50, and ASX 20. </li>
<li>In this insight, we take a look at the leading candidates who could become Adds/Deletes during the March 2022 Rebalance and other potential irregular changes.</li>
</ul>


The S&amp;P/ASX Index family is a widely-tracked group of indices and sub-indices which represent the performance of ASX-listed companies. 
In March 2022, Index rebalance events will take place for the S&amp;P/ASX capitalization-weighted indices including ASX 300, ASX 200, ASX 100, ASX 50, and ASX 20. 
In this insight, we take a look at the leading candidates who could become Adds/Deletes during the March 2022 Rebalance and other potential irregular changes.


S&P/​​ASX Indices: Quiddity Leaderboard for March 2022 Rebalance (Final)

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

<ul>
<li>
<a href="https://www.smartkarma.com/entities/senex-energy-ltd" target="_blank" data-smartkarma-citation="entities:18390:1" rel="noopener">Senex Energy (SXY AU)</a>'s Scheme Booklet is now out. The Scheme Meeting will be held on the 15 March. </li>
<li>The Independent Expert has concluded this US$600mn Offer is fair and reasonable and in the best interest of Senex shareholders.</li>
<li>The Offer price is full. And trading tight to terms.</li>
</ul>



Senex Energy (SXY AU)'s Scheme Booklet is now out. The Scheme Meeting will be held on the 15 March. 
The Independent Expert has concluded this US$600mn Offer is fair and reasonable and in the best interest of Senex shareholders.
The Offer price is full. And trading tight to terms.


Senex Energy: Scheme Booklet Out. Meeting On The 15 March

<ul>
<li>
<a href="https://www.smartkarma.com/entities/senex-energy-ltd" target="_blank" data-smartkarma-citation="entities:18390:1" rel="noopener">Senex Energy (SXY AU)</a> has <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02465599-2A1345453?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">entered</a> into a Scheme of Arrangement with Posco at A$4.60/share, in cash. In addition, Senex intends to pay an interim dividend of up to A$0.05/share.</li>
<li>Senex's board unanimously recommends that shareholders vote in favour of the Scheme. Key conditions of the Scheme include Senex shareholder approval and FIRB approval.</li>
<li>Senex expects a Scheme Meeting to occur in March 2022 and, if approved, the transaction is expected to complete in late March 2022.</li>
</ul>



Senex Energy (SXY AU) has entered into a Scheme of Arrangement with Posco at A$4.60/share, in cash. In addition, Senex intends to pay an interim dividend of up to A$0.05/share.
Senex's board unanimously recommends that shareholders vote in favour of the Scheme. Key conditions of the Scheme include Senex shareholder approval and FIRB approval.
Senex expects a Scheme Meeting to occur in March 2022 and, if approved, the transaction is expected to complete in late March 2022.


Senex Energy Enters Into Scheme With Posco

Global Special Situations & Strategy, SR Services Ltd

David Lepper

Global Special Situations & Strategy

SR Services Ltd

SR Services provides Strategic Knowledge and Solutions services for Family Offices and Corporate Business. 

We deliver this via advisory services, strategic planning, opportunity analysis/sourcing, as well as solution implementation. 

Whilst, we create intellectual discipline and operational leverage for your projects or daily activities, our ultimate objective is to empower whilst enhancing your decision making. 

Strategic Knowledge and Solutions

Cross Asset Strategy

<ul>
<li>
Our Q3-2021 All Cap High-Risk screen of stocks produced a market-cap-weighted average price return of 2% and a simple average decline of 0.2%.</li>
<li>
Out of the 34 stocks that appeared in our Q3-2021 screen, 15 stocks saw an average share price decline of 11.5%, whilst 19 stocks appreciated on average by 14%. The two biggest declining stock  were down 25% and 19% respectively.</li>
<li>Our Q4 2021 screen, with 38 names (up from 34 seen in Q3 and Q2 2021) delivers an interesting composition this quarter, </li>
<li>
As in the previous few quarters, we anticipate the possibility of a risk of deteriorating credit metrics during the next few quarters: Q4 2021’s Altman Z score rests at 1.23, which is just up on Q3 2021’s level of 1.19.</li>
</ul>



Our Q3-2021 All Cap High-Risk screen of stocks produced a market-cap-weighted average price return of 2% and a simple average decline of 0.2%.

Out of the 34 stocks that appeared in our Q3-2021 screen, 15 stocks saw an average share price decline of 11.5%, whilst 19 stocks appreciated on average by 14%. The two biggest declining stock  were down 25% and 19% respectively.
Our Q4 2021 screen, with 38 names (up from 34 seen in Q3 and Q2 2021) delivers an interesting composition this quarter, 

As in the previous few quarters, we anticipate the possibility of a risk of deteriorating credit metrics during the next few quarters: Q4 2021’s Altman Z score rests at 1.23, which is just up on Q3 2021’s level of 1.19.


Screening the Silk Road: Q4 2021 High-Risk Names to Avoid

M&amp;A deals in the Aussie energy space continue.
<a href="https://www.smartkarma.com/entities/posco-international-corporation" target="_blank" data-smartkarma-citation="entities:5954:1" rel="noopener">Posco International Corporation (047050 KS)</a>, the trading arm of South Korea's mega-steel play <a href="https://www.smartkarma.com/entities/posco" target="_blank" data-smartkarma-citation="entities:208:1" rel="noopener">Posco (005490 KS)</a>, has been granted exclusive due diligence through to 5 November to bump its indicative Offer of A$4.40/share for natural gas producer <a href="https://www.smartkarma.com/entities/senex-energy-ltd" target="_blank" data-smartkarma-citation="entities:18390:1" rel="noopener">Senex Energy (SXY AU)</a>. 
PIC first approached Senex on the 2 September with a A$4.00/share Offer, then A$4.20 on the 27 August, before submitting an indicative proposal of A$4.40/share on the 2 September, which is a 40% premium to the 30-day VWAP on that day. 
PIC was granted due diligence on the 15 September. The DD extension is to provide PIC with additional time to assess a further revised proposal at a higher price.
Should a firm Offer transpire, it will be done via an off-market takeover with a 50.1% minimum acceptance condition. FIRB approval would also be a condition. 
Senex is open to other offers:
<blockquote>
The Senex Board believes it is in the best interests of its shareholders to continue to engage with POSCO International and will assess any proposal received on its merits
</blockquote>
The proposal follows ongoing deals for <a href="https://www.smartkarma.com/entities/oil-search-ltd" target="_blank" data-smartkarma-citation="entities:773:1" rel="noopener">Oil Search Ltd (OSH AU)</a> (<a href="https://skr.ma/jxkVJ" target="_blank" rel="noopener">Oil Search/Santos: PNG a Potential Party Pooper</a> ) and <a href="https://www.smartkarma.com/entities/woodside-petroleum-ltd" target="_blank" data-smartkarma-citation="entities:177:1" rel="noopener">Woodside Petroleum (WPL AU)</a> tilt for <a href="https://www.smartkarma.com/entities/bhp-group-ltd" target="_blank" data-smartkarma-citation="entities:147:1" rel="noopener">BHP Group (BHP AU)</a> O&amp;G ops (<a href="https://skr.ma/wsrxa" target="_blank" rel="noopener">If Woodside Buys BHP Petroleum for Scrip, There Will Be Flowback</a>). 
More below the fold.

M&amp;A deals in the Aussie energy space continue.
Posco International Corporation (047050 KS), the trading arm of South Korea's mega-steel play Posco (005490 KS), has been granted exclusive due diligence through to 5 November to bump its indicative Offer of A$4.40/share for natural gas producer Senex Energy (SXY AU). 
PIC first approached Senex on the 2 September with a A$4.00/share Offer, then A$4.20 on the 27 August, before submitting an indicative proposal of A$4.40/share on the 2 September, which is a 40% premium to the 30-day VWAP on that day. 
PIC was granted due diligence on the 15 September. The DD extension is to provide PIC with additional time to assess a further revised proposal at a higher price.
Should a firm Offer transpire, it will be done via an off-market takeover with a 50.1% minimum acceptance condition. FIRB approval would also be a condition. 
Senex is open to other offers:

The Senex Board believes it is in the best interests of its shareholders to continue to engage with POSCO International and will assess any proposal received on its merits

The proposal follows ongoing deals for Oil Search Ltd (OSH AU) (Oil Search/Santos: PNG a Potential Party Pooper ) and Woodside Petroleum (WPL AU) tilt for BHP Group (BHP AU) O&amp;G ops (If Woodside Buys BHP Petroleum for Scrip, There Will Be Flowback). 
More below the fold.

Australia

Senex Energy Limited explores for and acquires crude oil and natural gas.  The Company is focused on Oil in the Cooper Basin, Unconventional gas in the Cooper Basin, and Coal seam gas in the Surat Basin.

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Senex Energy (SXY AU)

S&P/ASX Indices: Quiddity Leaderboard for March 2022 Rebalance (Final)

A final look at the leading candidates who could become Adds/Deletes during the March 2022 Rebalance and other potential irregular changes.

Janaghan Jeyakumar, CFA

Senex Energy: Scheme Booklet Out. Meeting On The 15 March

Trading tight at a gross/annualised spread of 0.9%/6.3%, including the A$0.05/share dividend. This is a done deal. Play the spread.

David Blennerhassett

Senex Energy Enters Into Scheme With Posco

The Offer price is full. Trading at a gross/annualised spread of 1.9%/6.8%, including the A$0.05/share dividend. This is a done deal. Play the...

David Blennerhassett

Screening the Silk Road: Q4 2021 High-Risk Names to Avoid

As we move through into Q1 2022, we expect to see volatility around highly priced & leveraged names. This screen is a key starting point towards...

David Lepper

Senex (SXY AU): Posco's Looming Offer

Given DD has been afforded, $4.40/share is approaching full value Currently trading just below terms. I think $4.60/share will garner board...

David Blennerhassett

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

S&P/​​ASX Indices: Quiddity Leaderboard for March 2022 Rebalance (Final)

A final look at the leading candidates who could become Adds/Deletes during the March 2022 Rebalance and other potential irregular changes.

Janaghan Jeyakumar, CFA

Senex Energy: Scheme Booklet Out. Meeting On The 15 March

Trading tight at a gross/annualised spread of 0.9%/6.3%, including the A$0.05/share dividend. This is a done deal. Play the spread.

David Blennerhassett

Senex Energy Enters Into Scheme With Posco

The Offer price is full. Trading at a gross/annualised spread of 1.9%/6.8%, including the A$0.05/share dividend. This is a done deal. Play the...

David Blennerhassett

Screening the Silk Road: Q4 2021 High-Risk Names to Avoid

As we move through into Q1 2022, we expect to see volatility around highly priced & leveraged names. This screen is a key starting point towards...

David Lepper

Senex (SXY AU): Posco's Looming Offer

Given DD has been afforded, $4.40/share is approaching full value Currently trading just below terms. I think $4.60/share will garner board...

David Blennerhassett

S&P/ASX Indices: Quiddity Leaderboard for March 2022 Rebalance (Final)