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>Earlier today, <a href="https://www.smartkarma.com/entities/perpetual-ltd" target="_blank" data-smartkarma-citation="entities:599:1" rel="noopener">Perpetual Ltd (PPT AU)</a> made a conditional, non-binding indicative proposal for <a href="https://www.smartkarma.com/entities/pendal-group-ltd" target="_blank" data-smartkarma-citation="entities:15795:1" rel="noopener">Pendal Group (PDL AU)</a> to acquire 100% of the shares by way of a Scheme of Arrangement.</li>
<li>
<a href="https://www.smartkarma.com/entities/pendal-group-ltd" target="_blank" data-smartkarma-citation="entities:15795:1" rel="noopener">Pendal Group (PDL AU)</a> shareholders will receive 1 share of <a href="https://www.smartkarma.com/entities/perpetual-ltd" target="_blank" data-smartkarma-citation="entities:599:1" rel="noopener">Perpetual Ltd (PPT AU)</a> for every 7.5 shares of PDL plus A$1.67/PDL share in cash.</li>
<li>This is a highly opportunistic offer and it is unlikely that <a href="https://www.smartkarma.com/entities/pendal-group-ltd" target="_blank" data-smartkarma-citation="entities:15795:1" rel="noopener">Pendal Group (PDL AU)</a>'s Board will support the proposal. There could be further improved proposals that come in. </li>
</ul>


Earlier today, Perpetual Ltd (PPT AU) made a conditional, non-binding indicative proposal for Pendal Group (PDL AU) to acquire 100% of the shares by way of a Scheme of Arrangement.

Pendal Group (PDL AU) shareholders will receive 1 share of Perpetual Ltd (PPT AU) for every 7.5 shares of PDL plus A$1.67/PDL share in cash.
This is a highly opportunistic offer and it is unlikely that Pendal Group (PDL AU)'s Board will support the proposal. There could be further improved proposals that come in. 


Perpetual's Indicative (& Opportunistic) Offer for Pendal Group: Details & Index Implications

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<p><a href="https://www.smartkarma.com/entities/smartgroup-corp-ltd" target="_blank" data-smartkarma-citation="entities:19954:1" rel="noopener">Smartgroup Corp (SIQ AU)</a>, a provider of employee management services, has <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02427457-2A1326453?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a> an Indicative Offer by way of a Scheme from TPG Global and Australia-based Potential Capital, with superannuation fund Aware Super joining as a co-investor.</p>
<p>The consortium is Offering A$10.35/share, a 31.7% premium to the undisturbed price. </p>
<p>SIQ's board has backed the proposal and granted the consortium four weeks of exclusive due diligence.</p>
<p>This appears a full Offer. But as it remains non-binding, expect shares to trade wide to terms in the absence of a competing proposal.</p>
<p>More below the fold. </p>

Smartgroup Corp (SIQ AU), a provider of employee management services, has announced an Indicative Offer by way of a Scheme from TPG Global and Australia-based Potential Capital, with superannuation fund Aware Super joining as a co-investor.
The consortium is Offering A$10.35/share, a 31.7% premium to the undisturbed price. 
SIQ's board has backed the proposal and granted the consortium four weeks of exclusive due diligence.
This appears a full Offer. But as it remains non-binding, expect shares to trade wide to terms in the absence of a competing proposal.
More below the fold. 

Smartgroup (SIQ AU): Indicative Offer From TPG/Potential Capital/Aware Super

<div>
<p>After <a href="https://www.smartkarma.com/entities/boral-ltd" target="_blank" data-smartkarma-citation="entities:1487:1" rel="noopener">Boral Ltd (BLD AU)</a>'s board rejected <a href="https://www.smartkarma.com/entities/seven-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:803:1" rel="noopener">Seven Group Holdings (SVW AU)</a>'s $6.50/share Offer in its <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02383423-2A1302901?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">Target Statement</a> of 9 June, Seven <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02383423-2A1302901?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">bumped</a> its Offer on the <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02388314-2A1305588?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">25 June</a>, stating it would pay $7.30 cash if they get to 29.5%, and up to $7.40 cash if they get to 34.5%.</p>
</div>
<div>
<p>Seven reached 29.5% by <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02390670-2A1307144?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">July 1</a>, 34.5% less than a <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02392570-2A1308444?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">week later</a>, then 52.65% on the <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02395727-2A1310071?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">15 July</a>. Clearing 50% automatically extended the Offer period (pursuant to<a href="http://www5.austlii.edu.au/au/legis/cth/consol_act/ca2001172/s624.html" target="_blank" rel="noopener"> s624</a> of the Corporations Act) to the 29 July - i.e. a two-week extension.</p>
<p>As of this morning, Seven held <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02398044-2A1311218?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">59.23%</a>. </p>
</div>
<div>
<p><a href="https://www.smartkarma.com/profiles/travis-lundy" target="_blank" data-smartkarma-citation="accounts:25" rel="noopener">Travis Lundy</a> and I have tackled this Offer <a href="https://skr.ma/Bxs7L" target="_blank" rel="noopener">here</a>, <a href="https://www.smartkarma.com/compose/insight/54682/Boral%20Ltd%20(BLD%20AU)%20Rejects%20Seven's%20Bump.%20Read%20more:%20https:/skr.ma/46Wun" target="_blank" rel="noopener">here</a>, and <a href="https://skr.ma/q9jMa" target="_blank" rel="noopener">here</a>.</p>
<p>With the Offer tentatively expected to close in a week's time, now is a good time to address a handful of questions I and other readers have raised.</p>
</div>


After Boral Ltd (BLD AU)'s board rejected Seven Group Holdings (SVW AU)'s $6.50/share Offer in its Target Statement of 9 June, Seven bumped its Offer on the 25 June, stating it would pay $7.30 cash if they get to 29.5%, and up to $7.40 cash if they get to 34.5%.


Seven reached 29.5% by July 1, 34.5% less than a week later, then 52.65% on the 15 July. Clearing 50% automatically extended the Offer period (pursuant to s624 of the Corporations Act) to the 29 July - i.e. a two-week extension.
As of this morning, Seven held 59.23%. 


Travis Lundy and I have tackled this Offer here, here, and here.
With the Offer tentatively expected to close in a week's time, now is a good time to address a handful of questions I and other readers have raised.


Boral Ltd: Seven's Done Deal. What Happens Next?

<div><p>Following the $1.3bn sale of its 50% stake in USG Boral to Knauf Gips KG, international building and construction materials play <a href="https://www.smartkarma.com/entities/boral-ltd" target="_blank" data-smartkarma-citation="entities:1487:1" rel="noopener">Boral Ltd (BLD AU)</a> <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02359742-2A1290439?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a> on April 1 it would use the proceeds to reduce net debt, and apply the remaining proceeds to commence a buyback. Boral aimed to buy up to 10% of shares out, or ~122mn shares, at a cost of A$670mn based on the then-prevalent share price. </p></div><div><p>On the 10 May, <a href="https://www.smartkarma.com/entities/seven-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:803:1" rel="noopener">Seven Group Holdings (SVW AU)</a> <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02373310-2A1297476?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a> an off-market takeover at $6.50, a nil premium to last close. There are essentially no conditions to this Offer. There is no minimum acceptance condition. Seven currently holds ~23.18% and would be "satisfied" for the Offer to result in a holding of around 30%. </p></div><div>
<p>It was a cheeky Offer to ostensibly work around the creep provisions in the legislation, and Boral's board not altogether surprisingly, recommended shareholders reject the Offer in its <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02383423-2A1302901?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">Target Statement</a> on the 9 June. The Independent Expert came out with a fair value range of A$8.25-A$9.13/share, and concluded the Offer was <em>not</em> fair or reasonable. </p>
<p>Seven has now <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02383423-2A1302901?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">bumped</a> its Offer: it will pay $7.30 cash if they get to 29.5%. Or $7.40 cash if they get to 34.5%.</p>
<p>The revised Offer was expected to be summarily rejected, which it <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02388314-2A1305588?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">was</a>. But with a closing price of A$7.34 on Friday, A$7.40 may well get up.</p>
</div><div><p>More below the fold.</p></div>

Following the $1.3bn sale of its 50% stake in USG Boral to Knauf Gips KG, international building and construction materials play Boral Ltd (BLD AU) announced on April 1 it would use the proceeds to reduce net debt, and apply the remaining proceeds to commence a buyback. Boral aimed to buy up to 10% of shares out, or ~122mn shares, at a cost of A$670mn based on the then-prevalent share price. On the 10 May, Seven Group Holdings (SVW AU) announced an off-market takeover at $6.50, a nil premium to last close. There are essentially no conditions to this Offer. There is no minimum acceptance condition. Seven currently holds ~23.18% and would be "satisfied" for the Offer to result in a holding of around 30%. 
It was a cheeky Offer to ostensibly work around the creep provisions in the legislation, and Boral's board not altogether surprisingly, recommended shareholders reject the Offer in its Target Statement on the 9 June. The Independent Expert came out with a fair value range of A$8.25-A$9.13/share, and concluded the Offer was not fair or reasonable. 
Seven has now bumped its Offer: it will pay $7.30 cash if they get to 29.5%. Or $7.40 cash if they get to 34.5%.
The revised Offer was expected to be summarily rejected, which it was. But with a closing price of A$7.34 on Friday, A$7.40 may well get up.
More below the fold.

<p>After completing the $1.3bn sale of its 50% stake in USG Boral to Knauf Gips KG, international building and construction materials play <a href="https://www.smartkarma.com/entities/boral-ltd" target="_blank" data-smartkarma-citation="entities:1487:1" rel="noopener">Boral Ltd (BLD AU)</a> <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02359742-2A1290439?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a> on April 1 it would use the proceeds to reduce net debt to A$1.5bn from A$1.9bn, and apply the remaining proceeds to commence a buyback.</p>
<p>Boral aims to buy up to 10% of shares out, or ~122mn shares, at a cost of A$670mn based on the then-prevalent share price. CEO Zlato Todorcevski said: “<em>we believe that an on-market buy-back is the most effective method of returning this surplus capital to our shareholders</em>.”</p>
<p>As of <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02372944-2A1297240?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">this morning</a>, Boral had bought back ~10.15mn shares.</p>
<h3>The New News</h3>
<p>After the close of trading today, <a href="https://www.smartkarma.com/entities/seven-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:803:1" rel="noopener">Seven Group Holdings (SVW AU)</a> <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02373310-2A1297476?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a> an off-market takeover at $6.50, a nil premium to last close.</p>
<p>There are essentially no conditions to this Offer. There is no minimum acceptance condition. </p>
<p>Seven currently holds ~23.18% and would be "satisfied" for the Offer to result in a holding of around 30%. </p>
<p>The Offer is expected to open on May 25 and close on June 25, unless extended.</p>
<p>It's a strange Offer, one that Boral's board will likely reject.</p>
<p>More below the fold.</p>

After completing the $1.3bn sale of its 50% stake in USG Boral to Knauf Gips KG, international building and construction materials play Boral Ltd (BLD AU) announced on April 1 it would use the proceeds to reduce net debt to A$1.5bn from A$1.9bn, and apply the remaining proceeds to commence a buyback.
Boral aims to buy up to 10% of shares out, or ~122mn shares, at a cost of A$670mn based on the then-prevalent share price. CEO Zlato Todorcevski said: “we believe that an on-market buy-back is the most effective method of returning this surplus capital to our shareholders.”
As of this morning, Boral had bought back ~10.15mn shares.
The New News
After the close of trading today, Seven Group Holdings (SVW AU) announced an off-market takeover at $6.50, a nil premium to last close.
There are essentially no conditions to this Offer. There is no minimum acceptance condition. 
Seven currently holds ~23.18% and would be "satisfied" for the Offer to result in a holding of around 30%. 
The Offer is expected to open on May 25 and close on June 25, unless extended.
It's a strange Offer, one that Boral's board will likely reject.
More below the fold.

Australia

Perpetual Limited is a financial services company that has two primary activities, wealth management services and corporate trust services. The Company provides funds management, responsible entity services, trustee services, executor services, financial planning, investment administration, superannuation, custody and registry services.

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Perpetual Ltd (PPT AU)

Perpetual's Indicative (& Opportunistic) Offer for Pendal Group: Details & Index Implications

Perpetual's indicative & opportunistic proposal has resulted in a 21% jump in Pendal's stock price today. But that is unlikely to be enough. We...

Brian Freitas

Smartgroup (SIQ AU): Indicative Offer From TPG/Potential Capital/Aware Super

Trading at 10.8%/28.4% gross/annualised spread, assuming five months to complete. That appears attractive. A competing bidder cannot be ruled out,...

David Blennerhassett

Boral Ltd: Seven's Done Deal. What Happens Next?

I wouldn't short shares here. Not until you have some visibility whether Seven keeps extending, and/or closes in on 75%. If Seven gets to 75%, they...

David Blennerhassett

Boral Ltd (BLD AU) Rejects Seven's Bump

Arbs probably already have ~2% ahead of the bump. If arbs go all in, that extra 10% of shares out needed to hit the $7.40/share Offer can be...

David Blennerhassett

Boral Ltd (BLD AU): Seven's Nil Premium

An interested large investor looking to raise its stake, coupled with a solid buyback - if you can buy shares at or near the Offer price, do so....

David Blennerhassett

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