Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>This morning pre-open, <a href="https://www.smartkarma.com/entities/hochtief-ag" target="_blank" data-smartkarma-citation="entities:21652:1" rel="noopener">Hochtief AG (HOT GR)</a> announced that it now owned 89.77% of <a href="https://www.smartkarma.com/entities/cimic-group-ltd" target="_blank" data-smartkarma-citation="entities:20030:1" rel="noopener">CIMIC Group Ltd (CIM AU)</a>. That gets awfully close to the level for squeezeout. </li>
<li>Today post-close, the S&amp;P ASX Indices announced that <a href="https://www.smartkarma.com/entities/cimic-group-ltd" target="_blank" data-smartkarma-citation="entities:20030:1" rel="noopener">CIMIC Group Ltd (CIM AU)</a> would be deleted from, and <a href="https://www.smartkarma.com/entities/homeco-daily-needs-reit" target="_blank" data-smartkarma-citation="entities:33526:1" rel="noopener">HomeCo Daily Needs REIT (HDN AU)</a> added to ASX200 on 11 April. </li>
<li>This is a non-negligible event for HomeCo Daily Needs, but was relatively well-flagged.</li>
</ul>


This morning pre-open, Hochtief AG (HOT GR) announced that it now owned 89.77% of CIMIC Group Ltd (CIM AU). That gets awfully close to the level for squeezeout. 
Today post-close, the S&amp;P ASX Indices announced that CIMIC Group Ltd (CIM AU) would be deleted from, and HomeCo Daily Needs REIT (HDN AU) added to ASX200 on 11 April. 
This is a non-negligible event for HomeCo Daily Needs, but was relatively well-flagged.


HomeCo Daily Needs Moves to ASX200 (CIMIC Out)

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

<ul>
<li>
<a href="https://www.smartkarma.com/entities/homeco-daily-needs-reit" target="_blank" data-smartkarma-citation="entities:33526:1" rel="noopener">HomeCo Daily Needs REIT (HDN AU)</a> will replace <a href="https://www.smartkarma.com/entities/cimic-group-ltd" target="_blank" data-smartkarma-citation="entities:20030:1" rel="noopener">CIMIC Group Ltd (CIM AU)</a> in the <a href="https://www.smartkarma.com/entities/s-p-asx-200" target="_blank" data-smartkarma-citation="entities:22901:1" rel="noopener">S&amp;P/ASX 200 (AS51 INDEX)</a> at the close of trading on 11 April.</li>
<li>The change has come earlier than expected as Hochtief hold nearly 90% of CIMIC. Positioning on HDN could be light- the stock could rally over the next couple of days.</li>
<li>There could be another ad hoc change prior to the June rebalance and then there will be more changes at the regular rebalance in June.</li>
</ul>



HomeCo Daily Needs REIT (HDN AU) will replace CIMIC Group Ltd (CIM AU) in the S&amp;P/ASX 200 (AS51 INDEX) at the close of trading on 11 April.
The change has come earlier than expected as Hochtief hold nearly 90% of CIMIC. Positioning on HDN could be light- the stock could rally over the next couple of days.
There could be another ad hoc change prior to the June rebalance and then there will be more changes at the regular rebalance in June.


ASX200 Index Rebalance: HomeCo Daily Needs REIT (HDN) Replaces CIMIC; More Changes in May & June

David Blennerhassett

<ul>
<li>On the 23 February, <a href="https://www.smartkarma.com/entities/acs-actividades-de-construccion-y-servicios" target="_blank" data-smartkarma-citation="entities:21242:1" rel="noopener">Actividades de Construcción y Servicios (ACS SM)</a>, via 52.3%-held <a href="https://www.smartkarma.com/entities/hochtief-ag" target="_blank" data-smartkarma-citation="entities:21652:1" rel="noopener">Hochtief AG (HOT GR)</a> offered $22/share for all <a href="https://www.smartkarma.com/entities/cimic-group-ltd" target="_blank" data-smartkarma-citation="entities:20030:1" rel="noopener">CIMIC (CIM AU)</a> shares it does not own. </li>
<li>The Independent Expert (Grant Thornton) has assessed the Offer and concluded it to be fair and reasonable.</li>
<li>The Offer is unconditional. The close of the Offer, unless extended, is the 11 April.</li>
</ul>


On the 23 February, Actividades de Construcción y Servicios (ACS SM), via 52.3%-held Hochtief AG (HOT GR) offered $22/share for all CIMIC (CIM AU) shares it does not own. 
The Independent Expert (Grant Thornton) has assessed the Offer and concluded it to be fair and reasonable.
The Offer is unconditional. The close of the Offer, unless extended, is the 11 April.


IE Says Fair And Reasonable In CIMIC's Target Statement

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Yashili International Holdings / Event-Driven

<ul>
<li>We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore and the US (Chinese ADRs only). </li>
<li>This week, the highest gross spreads are <a href="https://www.smartkarma.com/entities/yashili-international-holdings-ltd" target="_blank" data-smartkarma-citation="entities:3397:1" rel="noopener">Yashili International Holdings (1230 HK)</a>, <a href="https://www.smartkarma.com/entities/razer-inc" target="_blank" data-smartkarma-citation="entities:24380:1" rel="noopener">Razer Inc (1337 HK)</a>, <a href="https://www.smartkarma.com/entities/51-job-inc-adr" target="_blank" data-smartkarma-citation="entities:532:1" rel="noopener">51 Job Inc Adr (JOBS US)</a>, <a href="https://www.smartkarma.com/entities/uniti-group-ltd" target="_blank" data-smartkarma-citation="entities:29042:1" rel="noopener">Uniti Group Ltd (UWL AU)</a>
</li>
<li>The lowest gross spreads are <a href="https://www.smartkarma.com/entities/cimic-group-ltd" target="_blank" data-smartkarma-citation="entities:20030:1" rel="noopener">CIMIC Group Ltd (CIM AU)</a>, <a href="https://www.smartkarma.com/entities/virtus-health-ltd" target="_blank" data-smartkarma-citation="entities:14776:1" rel="noopener">Virtus Health (VRT AU)</a>, <a href="https://www.smartkarma.com/entities/china-logistics-property-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:22799:1" rel="noopener">China Logistics Property Holdings (1589 HK)</a>, <a href="https://www.smartkarma.com/entities/z-energy-ltd" target="_blank" data-smartkarma-citation="entities:9838:1" rel="noopener">Z Energy Ltd (ZEL NZ)</a>, <a href="https://www.smartkarma.com/entities/singapore-press-holdings-limited" target="_blank" data-smartkarma-citation="entities:9952:1" rel="noopener">Singapore Press Holdings (SPH SP)</a> </li>
</ul>


We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore and the US (Chinese ADRs only). 
This week, the highest gross spreads are Yashili International Holdings (1230 HK), Razer Inc (1337 HK), 51 Job Inc Adr (JOBS US), Uniti Group Ltd (UWL AU)

The lowest gross spreads are CIMIC Group Ltd (CIM AU), Virtus Health (VRT AU), China Logistics Property Holdings (1589 HK), Z Energy Ltd (ZEL NZ), Singapore Press Holdings (SPH SP) 


Merger Arb Mondays - Yashili, Razer, 51Job, Uniti, Link, Sezzle, Guodian

European Event-Driven Analyst

Jesus Rodriguez Aguilar

<ul>
<li>Hochtief offers A$22/share in cash, a 33% premium to the closing share price on the prior day, and the offer is final. The offer is a relatively low amount.</li>
<li>The deal should complete. The premium is generous, as the 15.4x P/22e E paid is high given that Hochtief and ACS are trading at 9.9x and 11.3x, respectively.</li>
<li>ACS trades at 27% discount to NAV. Holding structure rationalization and c. €5 billion received should be a catalyst for discount tightening. Long 1 ACS SM/short 0.4162 HOT GR.</li>
</ul>


Hochtief offers A$22/share in cash, a 33% premium to the closing share price on the prior day, and the offer is final. The offer is a relatively low amount.
The deal should complete. The premium is generous, as the 15.4x P/22e E paid is high given that Hochtief and ACS are trading at 9.9x and 11.3x, respectively.
ACS trades at 27% discount to NAV. Holding structure rationalization and c. €5 billion received should be a catalyst for discount tightening. Long 1 ACS SM/short 0.4162 HOT GR.


ACS/Hochtief/CIMIC: Rationalization of Holding Structure

Germany

Brenntag AG sells and distributes industrial and specialty chemicals.  The Company also develops and prepares specific chemical compounds and offers analysis services.  Brenntag's customers include oil and gas, paint, cosmetic, pharmaceutical, and water treatment companies.

GEA Group Aktiengesellschaft is a farm technology, mechanical equipment, process industry and refrigeration technology company. The Company supplies equipment for the food processing industry. GEA products have industrial, pharmaceutical and chemical applications.

KION Group AG provides material handling solutions. The Company offers forklifts, warehouse equipments, and other industrial trucks.

Rational AG manufactures and markets food preparation appliances/processors and kitchen accessories for caterers and canteen kitchens.  The Company's products cook and reheat food.  Rational sells primarily to hotels, restaurants, canteens and caterers in Europe, the United States, and Asia.

DMG Mori Aktiengesellschaft manufactures and markets machine tools. The Company's products include automatic lathes, milling, turning, laser, and ultrasonic machines.

Krones AG designs and manufactures production machinery and packaging robots for breweries, soft drink and water bottlers, chemical manufacturers, and food processors.  The Company produces cleaning, filling, labeling, sorting, and packaging production systems for the handling of plastic and glass containers. Krones operates worldwide.

KUKA AG manufactures production machinery and equipment, and offers production engineering services.  The Company designs and builds automobile factories, and produces welding and assembly systems, industrial robots, turning machines, packaging machinery, and measuring and control instruments for water and gas suppliers.  KUKA operates in Europe, the Americas, and Asia.

Jungheinrich AG manufactures battery, diesel, and gas powered merchandise stackers and forklifts.  The products are used in warehouses, production facilities, and for point-of-sales retail storage.  It produces shelving systems, rents forklifts, sells used forklifts, offers financing, and manages forklift fleets.  The Company sells in Europe, the Americas, Africa, and Asia.

MTU Aero Engines AG develops and manufactures engines and offers commercial engine services and support.  The Company sells to manufacturers and operators of engines and industrial gas turbines across the world.

China Communications Construction Company Ltd. is a transportation infrastructure group.  The Company is involved in infrastructure construction, infrastructure design, dredging, and port machinery manufacturing.  China Communications has operations worldwide.

China Communications Construction (1800 HK)

GMR Infrastructure is an infrastructure company with interests in airports, power and roads. The Company is developing a greenfield international airport at Hyderabad, and is also operating, managing and developing the Delhi airport. Additionally, it is involved in development and operation of power plants and road projects in India.

OBAYASHI CORPORATION is a general contractor operating nationwide and overseas. The Company builds commercial, residential, institutional buildings with earthquake-resistant technology.  Obayashi also performs civil engineering works for such as railroads.  The Company, through its subsidiaries, operates real estate, golf course, and financial businesses.

Fluor Corporation is a professional services company. The Company provides engineering, procurement, construction and maintenance as well as project management services on a global basis. Fluor also provides outsourcing of maintenance services and asset operations, equipment rental and sales, business support services, and other services.

KBR, Inc. is a global engineering, construction, and services company supporting the energy, petrochemicals, government services, and civil infrastructure sectors.  The Company offers a wide range of services through two business segments, Energy and Chemicals (E&C) and Government and Infrastructure (G&I).

KAJIMA CORPORATION is a general contractor operating nationwide and overseas. The Company builds commercial, residential, and institutional buildings with high-rise and earthquake-resistant construction technology.  Kajima also performs large scale civil engineering works such as nuclear power plants. The Company operates real estate and office automation equipment businesses.

Comfort Systems USA, Inc. provides heating, ventilation, and air conditioning system installation, maintenance, repair, and replacement services. The Company's commercial and industrial markets include office buildings, retail centers, apartment complexes, hotels, manufacturing plants, and government facilities.

MasTec, Inc. is a specialty contractor operating across a range of industries. The Company activities are the building, installation, maintenance, and upgrade of utility and communications infrastructure, including electrical utility transmission and distribution, wind farms, solar farms, renewable energy and natural gas infrastructure, wireless, and wireline.

TAISEI CORPORATION is a general contractor operating nationwide and overseas. The Company builds residential, commercial, and institutional buildings such as condominiums and single-family houses.  Taisei also performs civil engineering works for roads.  The Company, through its subsidiaries, operates real estate, resort development, and financial businesses.

Metallurgical Corporation of China Ltd., through its subsidiaries, operates in EPC projects (engineering, procurement and construction) mainly for metallurgical facilities, natural resources exploration, equipment fabrication, and property development.

Metallurgical Corporation Of China Ltd (601618 CH)

Hochtief AG provides construction and construction related services worldwide. The Company finances, designs, builds, constructs and operates a wide variety of facilities through its five divisions; Airport, Development, Construction Services Americas, Construction Services Asia Pacific, and Construction Services Europe.

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Hochtief AG (HOT GR)

HomeCo Daily Needs Moves to ASX200 (CIMIC Out)

HomeCo Daily Needs moves to the S&P ASX200 on an intra-quarter move, as expected, replacing CIMIC which is nearing 90% ownership by Hochtief as of...

Travis Lundy

ASX200 Index Rebalance: HomeCo Daily Needs REIT (HDN) Replaces CIMIC; More Changes in May & June

HDN AU will replace CIM AU in the ASX200 at the close on 11 April. LKE AU could replace CWN AU in May. Then there could be another 4 changes to the...

Brian Freitas

IE Says Fair And Reasonable In CIMIC's Target Statement

This is done and trading to terms given Hochtief's right to exercise on-market purchases. Separately, Hochtief appears "cheap" relative to its...

David Blennerhassett

Merger Arb Mondays - Yashili, Razer, 51Job, Uniti, Link, Sezzle, Guodian

This week, the highest gross spreads are Yashili (41.2%), Razer (19.2%), 51 Job (16.0%), Uniti Group (9.8%), Link (8.6%), Sezzle (7.0%), Guodian...

Arun George

ACS/Hochtief/CIMIC: Rationalization of Holding Structure

The offer is well timed, as CIMIC shares had been trading at seven-year lows prior to the offer. Gross spread is nearly inexistent, but worth...

Jesus Rodriguez Aguilar

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