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.

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/integral-corporation" target="_blank" data-smartkarma-citation="entities:40028:1" rel="noopener">Integral Corporation (5842 JP)</a> is an independent Japanese private equity firm seeking to raise about US$174 million. The pricing is on 4 September, and the listing is on 20 September. </li>
<li>We previously discussed the IPO in <a href="https://www.smartkarma.com/insights/integral-corporation-ipo-the-bull-case" target="_blank" data-smartkarma-citation="insights:110936" rel="noopener">Integral Corporation IPO: The Bull Case</a> and <a href="https://www.smartkarma.com/insights/integral-corporation-ipo-the-bear-case" target="_blank" data-smartkarma-citation="insights:111035" rel="noopener">Integral Corporation IPO: The Bear Case</a>. </li>
<li>In this note, we discuss forecasts and valuation. Our analysis suggests that the indicative IPO price range of JPY2,800-3,400 per share is unattractive. We would give the IPO a pass.</li>
</ul>



Integral Corporation (5842 JP) is an independent Japanese private equity firm seeking to raise about US$174 million. The pricing is on 4 September, and the listing is on 20 September. 
We previously discussed the IPO in Integral Corporation IPO: The Bull Case and Integral Corporation IPO: The Bear Case. 
In this note, we discuss forecasts and valuation. Our analysis suggests that the indicative IPO price range of JPY2,800-3,400 per share is unattractive. We would give the IPO a pass.


Integral Corporation IPO: Valuation Insights

European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

Network International Holdings / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/network-international-holdings-plc" target="_blank" data-smartkarma-citation="entities:28918:1" rel="noopener">Network International Holdings (NETW LN)</a> and a <a href="https://www.smartkarma.com/entities/brookfield-asset-management-lt" target="_blank" data-smartkarma-citation="entities:23741:1" rel="noopener">Brookfield Asset Management Lt (BAM US)</a>-led consortium agreed on a 400p/share cash offer (64% premium, 12.9x EV/Fwd EBITDA) to be implemented via a scheme of arrangement. </li>
<li>Network is no longer grossly undervalued. The 9 June closing share price of 383p represents an 89% chance of completing the deal (based on the 245p close price). </li>
<li>Synergies have not been quantified, but may explain why Brookfield's consortium has been able to trump CVC. Spread is 4.25%/8.92% (gross/annualised, assuming settlement by 15 December). Long.</li>
</ul>



Network International Holdings (NETW LN) and a Brookfield Asset Management Lt (BAM US)-led consortium agreed on a 400p/share cash offer (64% premium, 12.9x EV/Fwd EBITDA) to be implemented via a scheme of arrangement. 
Network is no longer grossly undervalued. The 9 June closing share price of 383p represents an 89% chance of completing the deal (based on the 245p close price). 
Synergies have not been quantified, but may explain why Brookfield's consortium has been able to trump CVC. Spread is 4.25%/8.92% (gross/annualised, assuming settlement by 15 December). Long.


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>The changes for the <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200-index" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">KOSPI2 INDEX</a>, <a href="https://www.smartkarma.com/entities/kosdaq-150-index" target="_blank" data-smartkarma-citation="entities:31077:1" rel="noopener">KOSDAQ150 Index</a>, <a href="https://www.smartkarma.com/entities/shanghai-shenzhen-csi-300-index" target="_blank" data-smartkarma-citation="entities:22906:1" rel="noopener">CSI300 Index</a>, <a href="https://www.smartkarma.com/entities/sse-science-and-technology-innovation-board-50-index" target="_blank" data-smartkarma-citation="entities:29279:1" rel="noopener">STAR50 INDEX</a> and a bunch of other onshore China indices were implemented last week.</li>
<li>The coming week has a lot of rebalance implementations on Friday with the S&amp;P/ASX family and the MVIS family, among others.</li>
<li>AUM for the Yuanta/P-shares Taiwan Top 50 ETF (0050 TT) has continued to increase with big inflows in the last week.</li>
</ul>


The changes for the KOSPI2 INDEX, KOSDAQ150 Index, CSI300 Index, STAR50 INDEX and a bunch of other onshore China indices were implemented last week.
The coming week has a lot of rebalance implementations on Friday with the S&amp;P/ASX family and the MVIS family, among others.
AUM for the Yuanta/P-shares Taiwan Top 50 ETF (0050 TT) has continued to increase with big inflows in the last week.


Index Rebalance & ETF Flow Recap: HSCI, GDXJ, KRX New Deal, AMFI, Amman Mineral, Infratil

<ul>
<li>
<a href="https://www.smartkarma.com/entities/infratil-ltd" target="_blank" data-smartkarma-citation="entities:596:1" rel="noopener">Infratil Ltd (IFT NZ)</a> is acquiring <a href="https://www.smartkarma.com/entities/brookfield-asset-management-lt" target="_blank" data-smartkarma-citation="entities:23741:1" rel="noopener">Brookfield Asset Management Lt (BAM US)</a>'s 49.95% stake in One NZ for NZ$1.8bn. This will be partly funded through a NZ$850m placement.</li>
<li>There will be a NZ$750m underwritten placement at NZ$9.2/share (an 8.9% discount to the last close) and a retail offering of NZ$100m.</li>
<li>There will be passive buying from index trackers post the completion of the placement and the settlement of the shares and that will remove some of the overhang.</li>
</ul>



Infratil Ltd (IFT NZ) is acquiring Brookfield Asset Management Lt (BAM US)'s 49.95% stake in One NZ for NZ$1.8bn. This will be partly funded through a NZ$850m placement.
There will be a NZ$750m underwritten placement at NZ$9.2/share (an 8.9% discount to the last close) and a retail offering of NZ$100m.
There will be passive buying from index trackers post the completion of the placement and the settlement of the shares and that will remove some of the overhang.


Infratil (IFT NZ): NZ$850m Placement & Index Implications

<ul>
<li>Middle East and Africa leading payments processing firm Network International is in play. On 21 April, Brookfield submitted a 400p competing proposal, vs. CVC/Francisco's earlier 387p. Network was trading cheaply.</li>
<li>Exposure to underserved MEA markets should support sustainable longer-term growth. My fair value estimate is 431p. The shares trade 0.75% below Brookfield's proposal, the market awaits a counteroffer from CVC/Francisco.</li>
<li>The fact that Brookfield has raised just 3.4% above CVC/Francisco seems to signal that Brookfield will be cautious in case of an "auction". Long.
</li>
</ul>


Middle East and Africa leading payments processing firm Network International is in play. On 21 April, Brookfield submitted a 400p competing proposal, vs. CVC/Francisco's earlier 387p. Network was trading cheaply.
Exposure to underserved MEA markets should support sustainable longer-term growth. My fair value estimate is 431p. The shares trade 0.75% below Brookfield's proposal, the market awaits a counteroffer from CVC/Francisco.
The fact that Brookfield has raised just 3.4% above CVC/Francisco seems to signal that Brookfield will be cautious in case of an "auction". Long.



Canada

Brookfield Asset Management Ltd. operates as an investment management firm. The Company focuses on property development, renewable energy, infrastructure, insurance, and private equity. Brookfield Asset Management serves customers worldwide.

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Brookfield Asset Management Lt (BAM US)

Integral Corporation IPO: Valuation Insights

In this note, we discuss forecasts and valuation. Our analysis suggests that the indicative IPO price range of JPY2,800-3,400 per share is...

Arun George

Brookfield to Buy Network International

On 9 June, just before the expiration of the PUSU deadline, Brookfield and Network agreed on a 400p/share cash offer to be effected via a scheme of...

Jesus Rodriguez Aguilar

Index Rebalance & ETF Flow Recap: HSCI, GDXJ, KRX New Deal, AMFI, Amman Mineral, Infratil

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

Infratil (IFT NZ): NZ$850m Placement & Index Implications

Infratil is acquiring Brookfield's 49.95% stake in One NZ for NZ$1.8bn. The underwritten placement of NZ$750m is at NZ$9.2/shr, an 8.9% discount to...

Brian Freitas

Competing Proposals

On 21 April, Network International confirmed that it had received a highly preliminary, non-binding proposal regarding a possible cash offer of...

Jesus Rodriguez Aguilar

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