Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>The spread on the BHP PLC/Limited arbitrage has widened as stock borrow on the AU line has dried up ahead of the ex-date for the General Meeting</li>
<li>An analysis of the shareholder register of BHP Group PLC suggests that BHP has mis-underestimated the passive ownership of PLC by a lot.</li>
<li>All told, on a NET basis, the 28th of January is likely to be a US$40bn index event (two way, both names, both funding trades). Another $10-15bn rolls within index.</li>
</ul>


The spread on the BHP PLC/Limited arbitrage has widened as stock borrow on the AU line has dried up ahead of the ex-date for the General Meeting
An analysis of the shareholder register of BHP Group PLC suggests that BHP has mis-underestimated the passive ownership of PLC by a lot.
All told, on a NET basis, the 28th of January is likely to be a US$40bn index event (two way, both names, both funding trades). Another $10-15bn rolls within index.


BHP Unification - Trading and Spread Update

European Event-Driven Analyst

Jesus Rodriguez Aguilar

Groupe Bruxelles Lambert Sa / Event-Driven

<ul>
<li>Premiums of selected DLC's have generally tightened during December, following the unification of BHP : BHP/BLT 1.3%; Rio Tinto AU/LN, 9.9% (widened); Shell, nil premium.</li>
<li>Discounts to NAV of holdcos have shown mixed performance: Alba, 42.7%; GBL, 30%; Heineken Holdings, 17.9%; Industrivärden, 14.4%; Investor AB, 7.5%; Kinnevik B, 22.4% (premium).</li>
<li>Recommended trades: BHP/BLT, GBL vs. listed assets, Industrivärden vs. listed assets.</li>
</ul>


Premiums of selected DLC's have generally tightened during December, following the unification of BHP : BHP/BLT 1.3%; Rio Tinto AU/LN, 9.9% (widened); Shell, nil premium.
Discounts to NAV of holdcos have shown mixed performance: Alba, 42.7%; GBL, 30%; Heineken Holdings, 17.9%; Industrivärden, 14.4%; Investor AB, 7.5%; Kinnevik B, 22.4% (premium).
Recommended trades: BHP/BLT, GBL vs. listed assets, Industrivärden vs. listed assets.


Selected European Holdcos and DLCs: December '21 Report

<ul>
<li>The shareholder prospectus and circular were published on 8 December. Shareholders will vote on 20 January 2022. Unification is expected to complete by 31 January 2022.</li>
<li>The benefits for Plc shareholders are evident. Ltd shareholders should reap the rewards in the longer term. BHP US trades at 1.4% premium vs. BBL US. </li>
<li>The spread is expected to tighten further. The most convenient way to play it is though the Adr: Long BBL US, short BHP US.</li>
</ul>


The shareholder prospectus and circular were published on 8 December. Shareholders will vote on 20 January 2022. Unification is expected to complete by 31 January 2022.
The benefits for Plc shareholders are evident. Ltd shareholders should reap the rewards in the longer term. BHP US trades at 1.4% premium vs. BBL US. 
The spread is expected to tighten further. The most convenient way to play it is though the Adr: Long BBL US, short BHP US.


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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

<ul>
<li>The BHP Board has decided to proceed with the Unification due to the advantages of simplification, strategic flexibility, elimination of DLC dividend arrangement, and elimination of share price differentials. </li>
<li>Since announcement of the Unification, the <a href="https://www.smartkarma.com/entities/bhp-billiton-plc-adr" target="_blank" data-smartkarma-citation="entities:14531:1" rel="noopener">BHP Billiton Plc (ADR) (BBL US)</a> discount to <a href="https://www.smartkarma.com/entities/bhp-billiton-ltd-adr" target="_blank" data-smartkarma-citation="entities:5424:1" rel="noopener">BHP Billiton (ADR) (BHP US)</a> has narrowed from 16.6% to 1.4% and will reach parity soon.</li>
<li>There will be selling on <a href="https://www.smartkarma.com/entities/bhp-billiton-plc" target="_blank" data-smartkarma-citation="entities:21840:1" rel="noopener">BHP Billiton (BLT LN)</a> from UK Index and STOXX trackers in January, and S&amp;P/ASX trackers will buy <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>, possibly in 2 tranches. </li>
</ul>


The BHP Board has decided to proceed with the Unification due to the advantages of simplification, strategic flexibility, elimination of DLC dividend arrangement, and elimination of share price differentials. 
Since announcement of the Unification, the BHP Billiton Plc (ADR) (BBL US) discount to BHP Billiton (ADR) (BHP US) has narrowed from 16.6% to 1.4% and will reach parity soon.
There will be selling on BHP Billiton (BLT LN) from UK Index and STOXX trackers in January, and S&amp;P/ASX trackers will buy BHP Group (BHP AU), possibly in 2 tranches. 


BHP Unification: Board Approves; S&P Market Consultation in Progress

<ul>
<li>Premiums of selected DLC's have generally tightened during November, following the unification of BHP : BHP/BLT 2.1%; Rio Tinto AU/LN, 8.6%; Shell, nil premium.</li>
<li>Discounts to NAV for European holdcos have generally widened during November, following market volatility: Alba, 42.2%; GBL 30.5%; Heineken Holdings 16.4%; Industrivärden, 13.1%; Investor, 12%; Kinnevik B, 19.8% (premium).</li>
<li>Recommended trades: BHP/BLT, GBL vs. listed assets, Industrivärden vs. listed assets.</li>
</ul>


Premiums of selected DLC's have generally tightened during November, following the unification of BHP : BHP/BLT 2.1%; Rio Tinto AU/LN, 8.6%; Shell, nil premium.
Discounts to NAV for European holdcos have generally widened during November, following market volatility: Alba, 42.2%; GBL 30.5%; Heineken Holdings 16.4%; Industrivärden, 13.1%; Investor, 12%; Kinnevik B, 19.8% (premium).
Recommended trades: BHP/BLT, GBL vs. listed assets, Industrivärden vs. listed assets.


Selected European Holdcos and DLCs: November Report

Australia

BHP Group Plc operates as a resource mining company. The Company focuses on minerals, metals, petroleum products, and oil and gas extraction and processing activities, as well as provides marketing services. BHP Group serves customers worldwide.

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BHP Group UK (BHPBF US)

BHP Unification - Trading and Spread Update

The BHP Unification Trade is a big one. I expect that the "mandated" index sell of BHP LN and reverse funding trade are US$13bn a side, the BHP AU...

Travis Lundy

Selected European Holdcos and DLCs: December '21 Report

Premiums of selected DLC's have generally tightened during December. Discount to NAV of holdcos have shown mixed trends.

Jesus Rodriguez Aguilar

BHP's DLC Unification: Update and Spread

The premium of BHP Ltd. vs. Plc. is expected to disappear upon the unification of the DLC, by 31 January 2022. The most convenient way is through...

Jesus Rodriguez Aguilar

BHP Unification: Board Approves; S&P Market Consultation in Progress

The BHP Board has approved the Unification and the UK line could stop trading on 28 January. The UK line will see selling from UK Index and STOXX...

Brian Freitas

Selected European Holdcos and DLCs: November Report

Premiums of selected DLC's have generally tightened during November whilst discounts to NAV for selected European have generally widened.

Jesus Rodriguez Aguilar

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