Event-Driven Investment Opportunities, Special Situation Investments

Dalius Tauraitis

Event-Driven Investment Opportunities

Special Situation Investments

Focus on event-driven trades and low risk arbitrage opportunities with short term catalysts

Event-Driven

Direct Line Insurance Group Pl / Event-Driven

<ul>
<li>Aviva is acquiring Direct Line for £1.297 cash, 0.2867 AV shares, and £0.05 dividend, totaling £2.70/share.</li>
<li>Direct Line's board is prepared to recommend the offer; Aviva is conducting due diligence with a PUSU date set for December 25.</li>
<li>The offer values Direct Line at 1.6x BV and 2.6x TBV, with potential regulatory scrutiny due to market share.</li>
</ul>


Aviva is acquiring Direct Line for £1.297 cash, 0.2867 AV shares, and £0.05 dividend, totaling £2.70/share.
Direct Line's board is prepared to recommend the offer; Aviva is conducting due diligence with a PUSU date set for December 25.
The offer values Direct Line at 1.6x BV and 2.6x TBV, with potential regulatory scrutiny due to market share.


Aviva's Acquisition of Direct Line: 9.5% Merger Arbitrage Opportunity Amid Regulatory Considerations and Shareholder Dynamics

European Event-Driven Analyst

Jesus Rodriguez Aguilar

<ul>
<li>Aviva’s sweetened 275p proposal for Direct Line, with a 73.3% premium, aims to strengthen its UK insurance market leadership and achieve £100M+ cost synergies, enhancing profitability and competitiveness.</li>
<li>The proposal values Direct Line at an 13.05x forward P/E multiple, higher than its five-year average of 9.95x. The acquisition is a transformative move for Aviva amidst ongoing sector consolidation.</li>
<li>PUSU deadline is 25 December. Gross spread is 8.8%. I believe Aviva will make a firm offer and would be long the spread. </li>
</ul>


Aviva’s sweetened 275p proposal for Direct Line, with a 73.3% premium, aims to strengthen its UK insurance market leadership and achieve £100M+ cost synergies, enhancing profitability and competitiveness.
The proposal values Direct Line at an 13.05x forward P/E multiple, higher than its five-year average of 9.95x. The acquisition is a transformative move for Aviva amidst ongoing sector consolidation.
PUSU deadline is 25 December. Gross spread is 8.8%. I believe Aviva will make a firm offer and would be long the spread. 


Aviva/Direct Line: Preliminary Offer Agreement

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Nec Networks & System Integr / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/nec-networks-system-integr" target="_blank" data-smartkarma-citation="entities:16396:1" rel="noopener">Nec Networks (1973 JP)</a>'s own FA didn't include any measure of transaction synergies to be created about which NEC and NESIC were so sure. This is not being done right.</li>
<li>
<a href="https://www.smartkarma.com/entities/singapore-post-ltd" target="_blank" data-smartkarma-citation="entities:150:1" rel="noopener">Singapore Post (SPOST SP)</a>'s muted price action after announcing the ~S$900mn FMH sale is illustrative. But expect more value to be unlocked from divesting non-core ops going forward. </li>
<li>The FTC' blocking the giant grocery merger of <a href="https://www.smartkarma.com/entities/kroger-co" target="_blank" data-smartkarma-citation="entities:20824:1" rel="noopener">Kroger Co (KR US)</a> and <a href="https://www.smartkarma.com/entities/albertsons-cos-inc" target="_blank" data-smartkarma-citation="entities:33026:1" rel="noopener">Albertsons Cos (ACI US)</a> spells trouble for ACT and <a href="https://www.smartkarma.com/entities/seven-i-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:1041:1" rel="noopener">Seven &amp; I Holdings (3382 JP)</a>.</li>
</ul>



Nec Networks (1973 JP)'s own FA didn't include any measure of transaction synergies to be created about which NEC and NESIC were so sure. This is not being done right.

Singapore Post (SPOST SP)'s muted price action after announcing the ~S$900mn FMH sale is illustrative. But expect more value to be unlocked from divesting non-core ops going forward. 
The FTC' blocking the giant grocery merger of Kroger Co (KR US) and Albertsons Cos (ACI US) spells trouble for ACT and Seven &amp; I Holdings (3382 JP).


Last Week in Event SPACE: NEC Network, SingPost, Seven & I, CPMC, Exedy

<ul><li>Highwire Capital's acquisition of SPAR Group at $2.50/share faces challenges due to financing issues and founder stock sales.</li><li>Marlowe resumed stock buybacks, purchasing £1.9m worth of shares, with £22m remaining in buyback authorization.</li><li>Pacific Current Group announced a tender offer at A$12/share, implying a 30% discount to pro-forma NAV.</li></ul>

Highwire Capital's acquisition of SPAR Group at $2.50/share faces challenges due to financing issues and founder stock sales.Marlowe resumed stock buybacks, purchasing £1.9m worth of shares, with £22m remaining in buyback authorization.Pacific Current Group announced a tender offer at A$12/share, implying a 30% discount to pro-forma NAV.

SSI Weekly Highlights: Merger Arbs, Acquisition Challenges, and Strategic Buybacks in Focus

Japan TMT Analyst

Pelham Smithers

Market Intel on Asian Tech with a Japan focus

Pelham Smithers Associates

Founded in 2009, Pelham Smithers Associates (PSA) provides market intelligence on Asian technology, focusing in particular on Japan. The industries covered by our team of specialists are: consumer electronics, telecomms, pharmaceuticals, internet, electronic parts and materials, automotive technology, retail and capital goods. 

Research is provided by the following:
Pelham Smithers: Macro, consumer electronics, telecoms & pharma
Joel Scheiman: Electronics materials / components
Julie Boote: Autos
Will Nestuk: Capital goods, machinery & transportation equipment parts
Thao Nguyen: eCommerce, internet content, marketing & advertising

Thematic (Sector/Industry)

The vote to leave the European Union will have both shorter and longer term impacts on the UK economy. There will be a shorter term impact on demand and, separately, on potential supply. The longer term one will depend largely on the policy response. Any decline in demand can in principle be offset by a lower exchange rate or by fiscal or monetary stimulus. A reduction in potential supply can only be offset, after a delay, by increased investment. This is therefore the key challenge and policy success will be determined by the extent to which investment is stimulated and adequate long- term growth thereby assured. In addition, there is also likely to be a reduction in living standards through a deterioration in the terms of trade as a result of weaker sterling, but this was in any event likely as the exchange rate appeared overvalued before the vote.

The vote to leave the European Union will have both shorter and longer term impacts on the UK economy. There will be a shorter term impact on demand and, separately, on potential supply. The longer term one will depend largely on the policy response. Any decline in demand can in principle be offset by a lower exchange rate or by fiscal or monetary stimulus. A reduction in potential supply can only be offset, after a delay, by increased investment. This is therefore the key challenge and policy success will be determined by the extent to which investment is stimulated and adequate long- term growth thereby assured. In addition, there is also likely to be a reduction in living standards through a deterioration in the terms of trade as a result of weaker sterling, but this was in any event likely as the exchange rate appeared overvalued before the vote.  

United Kingdom

Direct Line Insurance Group PLC provides personal and commercial insurance and services. The Company offers a range of insurance products including automobile, home, travel, pet, property, and accident insurance. Direct Line Insurance serves private customers and business clients online and by phone throughout the United Kingdom, Germany, and Italy.

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Direct Line Insurance Group Pl (DLG LN)

Aviva's Acquisition of Direct Line: 9.5% Merger Arbitrage Opportunity Amid Regulatory Considerations and Shareholder Dynamics

Aviva is acquiring Direct Line for £1.297 cash, 0.2867 AV shares, and £0.05 dividend, totaling £2.70/share.

Special Situation Investments

Aviva/Direct Line: Preliminary Offer Agreement

Aviva’s sweetened 275p proposal for Direct Line, with a 73.3% premium, aims to strengthen its UK insurance market leadership.

Jesus Rodriguez Aguilar

Last Week in Event SPACE: NEC Network, SingPost, Seven & I, CPMC, Exedy

It’s Sunday! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed during the...

David Blennerhassett

SSI Weekly Highlights: Merger Arbs, Acquisition Challenges, and Strategic Buybacks in Focus

Highwire Capital's acquisition of SPAR Group at $2.50/share faces challenges due to financing issues and founder stock sales.

Special Situation Investments

The UK Economy - After Brexit

The vote to leave the European Union will have both shorter and longer term impacts on the UK economy. There will be a shorter term impact on...

Pelham Smithers Associates

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