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>In this insight, we take a look at the potential index changes for F100 and F250 in the run up to the June 2023 Rebalance.</li>
<li>Based on latest prices, there are no changes expected for F100 while there could be up to four changes in F250 between now and the June 2023 Rebalance</li>
<li>This includes the potential intra-review replacement of F250 member <a href="https://www.smartkarma.com/entities/al-noor-hospitals-group-plc" target="_blank" data-smartkarma-citation="entities:21813:1" rel="noopener">Mediclinic International (MDC LN)</a> in the F250 index.</li>
</ul>


In this insight, we take a look at the potential index changes for F100 and F250 in the run up to the June 2023 Rebalance.
Based on latest prices, there are no changes expected for F100 while there could be up to four changes in F250 between now and the June 2023 Rebalance
This includes the potential intra-review replacement of F250 member Mediclinic International (MDC LN) in the F250 index.


Quiddity Leaderboard for UK F100/​250 June 2023: Mediclinic Replacement Candidates Have High Impact

<ul>
<li>In this insight, we take a look at Quiddity's final predictions for index changes for UK's F100 and F250 indices for the March 2023 Rebalance.</li>
<li>The index changes are likely to be confirmed after market close today and there could be more intra-review changes later this month.</li>
<li>In this insight, we take a look at the recent price performance of names that can potentially be involved in index changes and our flow expectations for each name.</li>
</ul>


In this insight, we take a look at Quiddity's final predictions for index changes for UK's F100 and F250 indices for the March 2023 Rebalance.
The index changes are likely to be confirmed after market close today and there could be more intra-review changes later this month.
In this insight, we take a look at the recent price performance of names that can potentially be involved in index changes and our flow expectations for each name.


Quiddity Final Predictions for UK F100/250 March 2023 Regular Review & Other Intra-Review Changes

European Event-Driven Analyst

Jesus Rodriguez Aguilar

<ul>
<li>Shareholders have gently pressed. SARIA has upped by 4.4% ("increased and final") its cash offer for casings manufacturer Devro to 320p+10p interim, which represents 10x EV/Fwd EBITDA and 17.1x Fwd P/E.</li>
<li>The increased consideration puts the offer almost in line with market leader Viscofan's multiples (10.2x EV/Fwd EBITDA). The initial offer was already generous, even more so now.</li>
<li>The deal should complete. Spread (gross/annualised) is 1.06%/2.65%, assuming settlement by 14 July (settlement will happen the same day as the second permitted dividend payment).</li>
</ul>


Shareholders have gently pressed. SARIA has upped by 4.4% ("increased and final") its cash offer for casings manufacturer Devro to 320p+10p interim, which represents 10x EV/Fwd EBITDA and 17.1x Fwd P/E.
The increased consideration puts the offer almost in line with market leader Viscofan's multiples (10.2x EV/Fwd EBITDA). The initial offer was already generous, even more so now.
The deal should complete. Spread (gross/annualised) is 1.06%/2.65%, assuming settlement by 14 July (settlement will happen the same day as the second permitted dividend payment).


<ul>
<li>Saria agreed to acquire Devro for 316.1p/share in cash, for an implied equity value of £540.8 million and an implied EV of £667 million. This represents 9.6x EV/Fwd EBITDA, 65% premium.</li>
<li>The offer price seems fair: the multiple is close to Viscofan's (market leader) and my fair value estimate is 305p (DCF based). A competing bid seems unlikely.</li>
<li>After the shares went ex-dividend, gross spread is 2.7%, but the estimated annual return is 3.6% (assuming settlement by 30 September 2023), which means there should be better opportunities elsewhere.</li>
</ul>


Saria agreed to acquire Devro for 316.1p/share in cash, for an implied equity value of £540.8 million and an implied EV of £667 million. This represents 9.6x EV/Fwd EBITDA, 65% premium.
The offer price seems fair: the multiple is close to Viscofan's (market leader) and my fair value estimate is 305p (DCF based). A competing bid seems unlikely.
After the shares went ex-dividend, gross spread is 2.7%, but the estimated annual return is 3.6% (assuming settlement by 30 September 2023), which means there should be better opportunities elsewhere.


Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

EURO STOXX 50 Price EUR / Technical Analysis

This report highlights actionable set ups from predominately European, developed markets, and is supportive of our view that Europe is bottoming, a viewpoint that remains far from consensus. Within Europe, we put a spotlight on Germany’s DAX and France’s CAC 40. Today’s recommendations are primarily from cyclical Sectors, however European Consumer Staples also exhibits bottoming RS.

This report highlights actionable set ups from predominately European, developed markets, and is supportive of our view that Europe is bottoming, a viewpoint that remains far from consensus. Within Europe, we put a spotlight on Germany’s DAX and France’s CAC 40. Today’s recommendations are primarily from cyclical Sectors, however European Consumer Staples also exhibits bottoming RS. 

Developed Markets Chart Book: Europe in Focus

United Kingdom

Devro PLC produces manufactured casings for the food industry.  The Company produces collagen-based products for manufacturers of sausages, salami, hams, and other cooked meats.

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Devro PLC (DVO LN)

Quiddity Leaderboard for UK F100/250 June 2023: Mediclinic Replacement Candidates Have High Impact

The Top 15 F250 potential ADDs have decent impact and some of these names could become intra-review ADDs or regular ADDs between now and June 2023....

Janaghan Jeyakumar, CFA

Quiddity Final Predictions for UK F100/250 March 2023 Regular Review & Other Intra-Review Changes

I expect three changes in the regular review and two intra-review changes in March 2023 for the F250 index. I do not expect any changes for the...

Janaghan Jeyakumar, CFA

SARIA/Devro: Increased and Final

On 16 February, the boards of Bidco and Devro announced that they agreed an increased and final Revised Proposal, as a result of engaging with...

Jesus Rodriguez Aguilar

SARIA/Devro: Agreed Offer

Saria agreed to acquire Devro for 316.1p/share in cash, for an implied equity value of £540.8 million and an implied EV of £667 million. This...

Jesus Rodriguez Aguilar

Developed Markets Chart Book: Europe in Focus

This report highlights actionable set ups from predominately European, developed markets, and is supportive of our view that Europe is bottoming, a...

Vermilion Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Quiddity Leaderboard for UK F100/​250 June 2023: Mediclinic Replacement Candidates Have High Impact

The Top 15 F250 potential ADDs have decent impact and some of these names could become intra-review ADDs or regular ADDs between now and June 2023....

Janaghan Jeyakumar, CFA

Quiddity Final Predictions for UK F100/250 March 2023 Regular Review & Other Intra-Review Changes

I expect three changes in the regular review and two intra-review changes in March 2023 for the F250 index. I do not expect any changes for the...

Janaghan Jeyakumar, CFA

SARIA/Devro: Increased and Final

On 16 February, the boards of Bidco and Devro announced that they agreed an increased and final Revised Proposal, as a result of engaging with...

Jesus Rodriguez Aguilar

SARIA/Devro: Agreed Offer

Saria agreed to acquire Devro for 316.1p/share in cash, for an implied equity value of £540.8 million and an implied EV of £667 million. This...

Jesus Rodriguez Aguilar

Developed Markets Chart Book: Europe in Focus

This report highlights actionable set ups from predominately European, developed markets, and is supportive of our view that Europe is bottoming, a...

Vermilion Research

Quiddity Leaderboard for UK F100/250 June 2023: Mediclinic Replacement Candidates Have High Impact