European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>On 24 October, Crayfish received all regulatory approvals (earlier than expected) and secured the fulfillment of the minimum acceptance condition of 66.67%. Crayfish has thus declared the offer unconditional.
</li>
<li>Triton's purchase offer will continue until 1 November, after which the purchase offer will be implemented. Spread is 0.46%/5.29% (gross/annualised, assuming settlement on 27 November). Long and tender.</li>
<li>In case Crayfish obtains &gt;90% of the shares, it intends to initiate compulsory redemption proceedings and delist Caverion.</li>
</ul>


On 24 October, Crayfish received all regulatory approvals (earlier than expected) and secured the fulfillment of the minimum acceptance condition of 66.67%. Crayfish has thus declared the offer unconditional.

Triton's purchase offer will continue until 1 November, after which the purchase offer will be implemented. Spread is 0.46%/5.29% (gross/annualised, assuming settlement on 27 November). Long and tender.
In case Crayfish obtains &gt;90% of the shares, it intends to initiate compulsory redemption proceedings and delist Caverion.


Triton/Caverion: Offer Declared Unconditional

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>Recent underperformance of <a href="https://www.smartkarma.com/entities/newmont-mining-corp" target="_blank" data-smartkarma-citation="entities:14503:1" rel="noopener">Newmont Mining (NEM US)</a> vs Peers appears to be part of a "perfect storm". </li>
<li>
<a href="https://www.smartkarma.com/entities/pccw-ltd" target="_blank" data-smartkarma-citation="entities:873:1" rel="noopener">PCCW Ltd (8 HK)</a> has an attractive yield on its side; and Richard Li has been buying. But a 6% premium to NAV is unsustainable for this holding company structure.</li>
<li>Palliser Capital's straightforward request is for a 35% reduction in <a href="https://www.smartkarma.com/entities/keisei-electric-railway-co" target="_blank" data-smartkarma-citation="entities:10876:1" rel="noopener">Keisei Electric Railway Co (9009 JP)</a>'s <a href="https://www.smartkarma.com/entities/oriental-land-co-ltd" target="_blank" data-smartkarma-citation="entities:13517:1" rel="noopener">Oriental Land (4661 JP)</a> holding reflects a strategic urgency. </li>
</ul>


Recent underperformance of Newmont Mining (NEM US) vs Peers appears to be part of a "perfect storm". 

PCCW Ltd (8 HK) has an attractive yield on its side; and Richard Li has been buying. But a 6% premium to NAV is unsustainable for this holding company structure.
Palliser Capital's straightforward request is for a 35% reduction in Keisei Electric Railway Co (9009 JP)'s Oriental Land (4661 JP) holding reflects a strategic urgency. 


Last Week In Event SPACE: Newcrest/Newmont, Keisei Electric, PCCW, Cosmo Energy, Leapmotor

<ul>
<li>Crayfish/Triton's purchase price is the highest and now officially preferred by <a href="https://www.smartkarma.com/entities/caverion-corp" target="_blank" data-smartkarma-citation="entities:21753:1" rel="noopener">Caverion Corp (CAV1V FH)</a>'s Board of directors. The offer period for both offers expires on 17 May.</li>
<li>Caverion's board advisors believe the offer will be finalized between October and February. Shares trade above Bain's alternative consideration (lower chance to succeed) and Triton has already secured 29.9%.</li>
<li>Spread to Triton's offer is 4%/7.9% (gross, annualised assuming settlement by  30 November), however the free float has been massively reduced, hence the liquidity too.</li>
</ul>


Crayfish/Triton's purchase price is the highest and now officially preferred by Caverion Corp (CAV1V FH)'s Board of directors. The offer period for both offers expires on 17 May.
Caverion's board advisors believe the offer will be finalized between October and February. Shares trade above Bain's alternative consideration (lower chance to succeed) and Triton has already secured 29.9%.
Spread to Triton's offer is 4%/7.9% (gross, annualised assuming settlement by  30 November), however the free float has been massively reduced, hence the liquidity too.


<ul>
<li>Bain goes mildly hostile, with a €34/share indicative offer (20.5x EV/Fwd EBIT on IBES consensus), above 11.1x last-10y average. Further, if it fully succeeded, it'd raise to €36/share (21.6x).</li>
<li>Software AG dislikes the improved indicative offer. The situation reminds of the battle for <a href="https://www.smartkarma.com/entities/caverion-corp" target="_blank" data-smartkarma-citation="entities:21753:1" rel="noopener">Caverion Corp (CAV1V FH)</a>, now being played, in which precisely Bain has been the unexpected loser.</li>
<li>At this point, it seems Silver Lake will have to raise its offer again. I raise my TP to €34. Long (possible upside to Bain's €36/share, 6.1% gross).</li>
</ul>


Bain goes mildly hostile, with a €34/share indicative offer (20.5x EV/Fwd EBIT on IBES consensus), above 11.1x last-10y average. Further, if it fully succeeded, it'd raise to €36/share (21.6x).
Software AG dislikes the improved indicative offer. The situation reminds of the battle for Caverion Corp (CAV1V FH), now being played, in which precisely Bain has been the unexpected loser.
At this point, it seems Silver Lake will have to raise its offer again. I raise my TP to €34. Long (possible upside to Bain's €36/share, 6.1% gross).


<ul>
<li>Triton's consortium reduced the acceptance threshold to 2/3rds of all shares, and, as expected,  the board of Caverion changed its recommendation in favour of the Triton consortium's proposal. </li>
<li>Nearly a third of the shares supporting the offer are held by each party. Bain's consortium hasn't improved Triton's offer and expects the latter will encounter antitrust hurdles.</li>
<li>Triton would make a cumulative IRR of about 20% if it sold the business for 7.5x EBITDA by year 7. Long and tender to Triton's offer (spread is 2.63%/3.75% gross/annualised).</li>
</ul>


Triton's consortium reduced the acceptance threshold to 2/3rds of all shares, and, as expected,  the board of Caverion changed its recommendation in favour of the Triton consortium's proposal. 
Nearly a third of the shares supporting the offer are held by each party. Bain's consortium hasn't improved Triton's offer and expects the latter will encounter antitrust hurdles.
Triton would make a cumulative IRR of about 20% if it sold the business for 7.5x EBITDA by year 7. Long and tender to Triton's offer (spread is 2.63%/3.75% gross/annualised).


Finland

Caverion Corporation provides building systems and industrial services in the Nordic countries, Central Europe, Russia and the Baltic countries. The Company provides services that cover all building systems in properties, including HVAC systems, security, fire safety and telecommunications systems as well as the automation that controls them.

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Caverion Corp (CAV1V FH)

Triton/Caverion: Offer Declared Unconditional

Crayfish has received regulatory approvals and met the minimum acceptance condition, making their offer unconditional. Triton's purchase offer...

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On late evening 9 May, Rocket Software, a US competitor controlled by Bain Capital, submitted a revised legally non-binding expression of interest...

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Caverion Switches to Triton's Offer

Triton's consortium reduced the acceptance threshold to 2/3rds of all shares, and, as expected, the board of Caverion changed its recommendation...

Jesus Rodriguez Aguilar

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Triton/Caverion: Offer Declared Unconditional

​Crayfish has received regulatory approvals and met the minimum acceptance condition, making their offer unconditional. Triton's purchase offer...

Jesus Rodriguez Aguilar

Last Week In Event SPACE: Newcrest/Newmont, Keisei Electric, PCCW, Cosmo Energy, Leapmotor

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Triton/Caverion: Drawing to a Close

The offer period expires on 17 May. Bain's offer has lower chances to succeed. Shares trade above Bain's alternative consideration (lower chance to...

Jesus Rodriguez Aguilar

Rocket Software (Bain) Ups the Game

On late evening 9 May, Rocket Software, a US competitor controlled by Bain Capital, submitted a revised legally non-binding expression of interest...

Jesus Rodriguez Aguilar

Caverion Switches to Triton's Offer

Triton's consortium reduced the acceptance threshold to 2/3rds of all shares, and, as expected, the board of Caverion changed its recommendation...

Jesus Rodriguez Aguilar

Crayfish has received regulatory approvals and met the minimum acceptance condition, making their offer unconditional. Triton's purchase offer...