Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

<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> aims to raise around US$456m (NZ$750m) via an institutional placement.</li>
<li>Proceeds from the placement will be used to acquire the remaining stake on One New Zealand from Brookfields.</li>
<li>In this note, we will talk about the placement and run the deal through our ECM framework.</li>
</ul>



Infratil Ltd (IFT NZ) aims to raise around US$456m (NZ$750m) via an institutional placement.
Proceeds from the placement will be used to acquire the remaining stake on One New Zealand from Brookfields.
In this note, we will talk about the placement and run the deal through our ECM framework.


Infratil Placement - Acquisition of Familiar Asset at Higher Multiples, Stock Is Toppish

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

Event-Driven

<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

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.

<p><a href="https://www.smartkarma.com/entities/z-energy-ltd" target="_blank" data-smartkarma-citation="entities:9838:1" rel="noopener">Z Energy Ltd (ZEL NZ)</a> is a fuel distribution and retailing business which owns and manages over 300 fuel stations in New Zealand under the Z and Caltex brands. Z Energy revealed a non-binding indicative proposal from <a href="https://www.smartkarma.com/entities/ampol-ltd" target="_blank" data-smartkarma-citation="entities:345:1" rel="noopener">Caltex Australia (ALD AU)</a>/Ampol to acquire it via a scheme of arrangement. Ampol is offering NZ$3.78 per share. The bid represents a 22% premium to the share price on 12 August (prior to receipt of the announced proposal), a 35% premium to the share price on 26 July (prior to media speculation regarding a bid) and a 47% premium to the share price on 1 June (prior to Ampol’s first rejected proposal).</p><p>Z Energy has agreed to grant Ampol a four-week exclusivity period to conduct due diligence. The indicative offer permits Z Energy to pay dividends up to NZ 10 cents on the scheme implementation to accommodate any regulatory-driven delays. Subject to discussions, Ampol’s offer may include a scrip component and a secondary New Zealand listing.  </p><p>Pushing for a better price is part of the M&amp;A game. The Board had rejected Ampol’s previous three offers as they did not represent compelling value. The Board was able to secure a sweetened bid which offers a 12.8% bump to Ampol’s first offer of NZ$3.35 per share.  </p><p>Ampol’s offer is a premium to Z Energy's historical EV/EBITDA multiples but a discount to pre-COVID-19 share prices. Z Energy’s CEO opines that Ampol’s bid could be a catalyst for other bidders that had previously signalled interest to make a move for Z Energy. Potential bidders could be <a href="https://www.smartkarma.com/entities/chevron-corp" target="_blank" data-smartkarma-citation="entities:11091:1" rel="noopener">Chevron Corp (CVX US)</a>, Vitol, <a href="https://www.smartkarma.com/entities/glencore-plc" target="_blank" data-smartkarma-citation="entities:764:1" rel="noopener">Glencore Plc (GLEN LN)</a>, Trafigura and Japanese refiners.</p><div class="content-highlight"><p>Overall, we think Ampol’s offer is a good starting point to lay down a valuation benchmark and suspect that there is some upside to the final offer price. At the last close price of NZ$3.48, Z Energy’s shares are trading at an 8.6% gross spread to the indicative offer.</p></div>

Z Energy Ltd (ZEL NZ) is a fuel distribution and retailing business which owns and manages over 300 fuel stations in New Zealand under the Z and Caltex brands. Z Energy revealed a non-binding indicative proposal from Caltex Australia (ALD AU)/Ampol to acquire it via a scheme of arrangement. Ampol is offering NZ$3.78 per share. The bid represents a 22% premium to the share price on 12 August (prior to receipt of the announced proposal), a 35% premium to the share price on 26 July (prior to media speculation regarding a bid) and a 47% premium to the share price on 1 June (prior to Ampol’s first rejected proposal).Z Energy has agreed to grant Ampol a four-week exclusivity period to conduct due diligence. The indicative offer permits Z Energy to pay dividends up to NZ 10 cents on the scheme implementation to accommodate any regulatory-driven delays. Subject to discussions, Ampol’s offer may include a scrip component and a secondary New Zealand listing.  Pushing for a better price is part of the M&amp;A game. The Board had rejected Ampol’s previous three offers as they did not represent compelling value. The Board was able to secure a sweetened bid which offers a 12.8% bump to Ampol’s first offer of NZ$3.35 per share.  Ampol’s offer is a premium to Z Energy's historical EV/EBITDA multiples but a discount to pre-COVID-19 share prices. Z Energy’s CEO opines that Ampol’s bid could be a catalyst for other bidders that had previously signalled interest to make a move for Z Energy. Potential bidders could be Chevron Corp (CVX US), Vitol, Glencore Plc (GLEN LN), Trafigura and Japanese refiners.Overall, we think Ampol’s offer is a good starting point to lay down a valuation benchmark and suspect that there is some upside to the final offer price. At the last close price of NZ$3.48, Z Energy’s shares are trading at an 8.6% gross spread to the indicative offer.

<p>Earlier today, <a href="https://www.smartkarma.com/entities/ampol-ltd" target="_blank" data-smartkarma-citation="entities:345:1" rel="noopener">Caltex Australia (ALD AU)</a> announced that it has submitted a non-binding indicative proposal to acquire <a href="https://www.smartkarma.com/entities/z-energy-ltd" target="_blank" data-smartkarma-citation="entities:9838:1" rel="noopener">Z Energy Ltd (ZEL NZ)</a> for NZ$3.78/share, valuing the company at around NZ$2bn and representing an implied Enterprise Value of NZ$2.8bn. The proposal would be implemented by way of a scheme of arrangement.</p><p>The offer price represents a premium of 22% to the close the day before the offer was made and is a 24% premium to the last close. But the offer is also 40% lower than the close price two years ago and 50% lower than the close price three years ago.</p><p>A dividend mechanism has been proposed that would permit <a href="https://www.smartkarma.com/entities/z-energy-ltd" target="_blank" data-smartkarma-citation="entities:9838:1" rel="noopener">Z Energy Ltd (ZEL NZ)</a> to pay a dividend on implementation of the scheme equal to NZ$0.055/share, per calendar day for each day that financial close extends beyond 31 March 2022, up to a limit of NZ$0.10/share.</p><p>The transaction is subject to negotiation of a Scheme Implementation Agreement (SIA), <a href="https://www.smartkarma.com/entities/ampol-ltd" target="_blank" data-smartkarma-citation="entities:345:1" rel="noopener">Caltex Australia (ALD AU)</a> and <a href="https://www.smartkarma.com/entities/z-energy-ltd" target="_blank" data-smartkarma-citation="entities:9838:1" rel="noopener">Z Energy Ltd (ZEL NZ)</a> board approval, <a href="https://www.smartkarma.com/entities/z-energy-ltd" target="_blank" data-smartkarma-citation="entities:9838:1" rel="noopener">Z Energy Ltd (ZEL NZ)</a> shareholder approval, New Zealand High Court approval, and regulatory clearances under the New Zealand Commerce Act and Overseas Investment Act.</p><p>To partially fund the transaction, <a href="https://www.smartkarma.com/entities/ampol-ltd" target="_blank" data-smartkarma-citation="entities:345:1" rel="noopener">Caltex Australia (ALD AU)</a> could issue around A$600m of stock to <a href="https://www.smartkarma.com/entities/z-energy-ltd" target="_blank" data-smartkarma-citation="entities:9838:1" rel="noopener">Z Energy Ltd (ZEL NZ)</a> shareholders or conduct a pro rata entitlement offer to its own shareholders.</p><p>We feel that the <a href="https://www.smartkarma.com/entities/z-energy-ltd" target="_blank" data-smartkarma-citation="entities:9838:1" rel="noopener">Z Energy Ltd (ZEL NZ)</a> board is still not convinced that the deal price is a good level for shareholders and it could take a bump to get this through. There could also be other players that enter the fray now that they know <a href="https://www.smartkarma.com/entities/z-energy-ltd" target="_blank" data-smartkarma-citation="entities:9838:1" rel="noopener">Z Energy Ltd (ZEL NZ)</a> could consider a deal.</p>

Earlier today, Caltex Australia (ALD AU) announced that it has submitted a non-binding indicative proposal to acquire Z Energy Ltd (ZEL NZ) for NZ$3.78/share, valuing the company at around NZ$2bn and representing an implied Enterprise Value of NZ$2.8bn. The proposal would be implemented by way of a scheme of arrangement.The offer price represents a premium of 22% to the close the day before the offer was made and is a 24% premium to the last close. But the offer is also 40% lower than the close price two years ago and 50% lower than the close price three years ago.A dividend mechanism has been proposed that would permit Z Energy Ltd (ZEL NZ) to pay a dividend on implementation of the scheme equal to NZ$0.055/share, per calendar day for each day that financial close extends beyond 31 March 2022, up to a limit of NZ$0.10/share.The transaction is subject to negotiation of a Scheme Implementation Agreement (SIA), Caltex Australia (ALD AU) and Z Energy Ltd (ZEL NZ) board approval, Z Energy Ltd (ZEL NZ) shareholder approval, New Zealand High Court approval, and regulatory clearances under the New Zealand Commerce Act and Overseas Investment Act.To partially fund the transaction, Caltex Australia (ALD AU) could issue around A$600m of stock to Z Energy Ltd (ZEL NZ) shareholders or conduct a pro rata entitlement offer to its own shareholders.We feel that the Z Energy Ltd (ZEL NZ) board is still not convinced that the deal price is a good level for shareholders and it could take a bump to get this through. There could also be other players that enter the fray now that they know Z Energy Ltd (ZEL NZ) could consider a deal.

Ampol's NBIO for Z Energy: May Need More to Go Through

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<div>
<p>On the 14 March, <a href="https://www.smartkarma.com/entities/tilt-renewables-ltd" target="_blank" data-smartkarma-citation="entities:24371:1" rel="noopener">Tilt Renewables Ltd (TLT NZ)</a> <a href="http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/TLT/369079/342312.pdf" target="_blank" rel="noopener">announced</a> a binding agreement from <a href="https://www.smartkarma.com/entities/mighty-river-power" target="_blank" data-smartkarma-citation="entities:9933:1" rel="noopener">Mercury NZ Ltd (MCY NZ)</a> and PowAR by way of a Scheme at NZ$7.80/share, or a 99% premium to the undisturbed price.  PowAR is a partnership between <a href="https://www.smartkarma.com/entities/agl-energy-ltd" target="_blank" data-smartkarma-citation="entities:554:1" rel="noopener">AGL Energy Ltd (AGL AU)</a>, QIC, and Australia’s sovereign wealth fund.</p>
</div>
<div>
<p>Should the Scheme be approved, Tilt will sell its Australian assets to PowAR, and Mercury NZ would acquire the New Zealand assets. The Offer had the backing of Infratil and Mercury, holding 65.46% and 19.92% respectively.</p>
</div>
<div>
<p>On the 16 April, Tilt <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02364436-3A565443?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a> it has amended the terms of the Scheme Implementation Agreement (SIA), such that PowAR/Mercury would now pay NZ$8.10/share. The SIA had also been amended to include the removal of provisions allowing Tilt to evaluate any competing proposal to the Scheme or to terminate the SIA if a superior proposal were to be received.</p>
<p>Given the SIA cannot be terminated in such circumstances, neither Mercury nor Infratil are released from their voting commitments. This means that the emergence of a superior alternative transaction is remote unless the SIA terminates due to reasons such as a condition not being fulfilled.</p>
</div>
<div>
<p>The Scheme Booklet is now <a href="http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/TLT/373692/348047.pdf" target="_blank" rel="noopener">out</a>. The Scheme Meeting will be held on the 14 July, with an expected implementation date of the 3 August.</p>
<div>
<p>The Independent Advisor has concluded the Scheme was "reasonable". </p>
</div>
<div>
<p>More below the fold.</p>
</div>
</div>


On the 14 March, Tilt Renewables Ltd (TLT NZ) announced a binding agreement from Mercury NZ Ltd (MCY NZ) and PowAR by way of a Scheme at NZ$7.80/share, or a 99% premium to the undisturbed price.  PowAR is a partnership between AGL Energy Ltd (AGL AU), QIC, and Australia’s sovereign wealth fund.


Should the Scheme be approved, Tilt will sell its Australian assets to PowAR, and Mercury NZ would acquire the New Zealand assets. The Offer had the backing of Infratil and Mercury, holding 65.46% and 19.92% respectively.


On the 16 April, Tilt announced it has amended the terms of the Scheme Implementation Agreement (SIA), such that PowAR/Mercury would now pay NZ$8.10/share. The SIA had also been amended to include the removal of provisions allowing Tilt to evaluate any competing proposal to the Scheme or to terminate the SIA if a superior proposal were to be received.
Given the SIA cannot be terminated in such circumstances, neither Mercury nor Infratil are released from their voting commitments. This means that the emergence of a superior alternative transaction is remote unless the SIA terminates due to reasons such as a condition not being fulfilled.


The Scheme Booklet is now out. The Scheme Meeting will be held on the 14 July, with an expected implementation date of the 3 August.

The Independent Advisor has concluded the Scheme was "reasonable". 


More below the fold.



Tilt Renewables: Scheme Booklet Out. EGM Firmed

New Zealand

Infratil Limited is an infrastructure investment company. The Company invests in airports, energy such as renewable and waste-energy, and public transportation.

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Infratil Ltd (IFT NZ)

Infratil Placement - Acquisition of Familiar Asset at Higher Multiples, Stock Is Toppish

Infratil Ltd (IFT NZ) aims to raise around US$456m (NZ$750m) via an institutional placement. In this note, we talk about the placement and run the...

Sumeet Singh

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

Ampol Lobs an Offer for Z Energy

Z Energy revealed a non-binding indicative proposal from Ampol at NZ$3.78 per share. We suspect that there is some upside to the final offer price....

Arun George

Ampol's NBIO for Z Energy: May Need More to Go Through

Ampol has submitted a non-binding indicative proposal to buy Z Energy at HK$3.78/share in cash. We feel that the deal will go through with a bump....

Brian Freitas

Tilt Renewables: Scheme Booklet Out. EGM Firmed

Done deal and trading tight at a 1.0%/7.2% gross/annualised spread. Given the spread and Tilt's low liquidity, this insight is bearish.

David Blennerhassett

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