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/bhp-group-ltd" target="_blank" data-smartkarma-citation="entities:147:1" rel="noopener">BHP Group Ltd (BHP AU)</a> made a non-binding indicative proposal to acquire all shares in <a href="https://www.smartkarma.com/entities/oz-minerals-ltd" target="_blank" data-smartkarma-citation="entities:1138:1" rel="noopener">OZ Minerals Ltd (OZL AU)</a> at A$25/share and was swiftly rejected.</li>
<li>We feel an offer around the A$28.5-A$29/share range would get the <a href="https://www.smartkarma.com/entities/oz-minerals-ltd" target="_blank" data-smartkarma-citation="entities:1138:1" rel="noopener">OZ Minerals Ltd (OZL AU)</a> Board to open up its books for due diligence.</li>
<li>3.25% of the outstanding shares have been shorted and the stock could trade higher than the BHP offer price. We'd wait for a price around A$25/share to enter.</li>
</ul>



BHP Group Ltd (BHP AU) made a non-binding indicative proposal to acquire all shares in OZ Minerals Ltd (OZL AU) at A$25/share and was swiftly rejected.
We feel an offer around the A$28.5-A$29/share range would get the OZ Minerals Ltd (OZL AU) Board to open up its books for due diligence.
3.25% of the outstanding shares have been shorted and the stock could trade higher than the BHP offer price. We'd wait for a price around A$25/share to enter.


OZ Minerals (OZL): BHP Offer Swiftly Rejected

Index Rebalance

<ul>
<li>There could be one change to the <a href="https://www.smartkarma.com/entities/s-p-asx-200" target="_blank" data-smartkarma-citation="entities:22901:1" rel="noopener">S&amp;P/ASX 200 (AS51 INDEX)</a> in July following the privatisation of <a href="https://www.smartkarma.com/entities/uniti-group-ltd" target="_blank" data-smartkarma-citation="entities:29042:1" rel="noopener">Uniti Group Ltd (UWL AU)</a>. </li>
<li>Then there will be a whole bunch of changes to the S&amp;P/ASX 100 Index, <a href="https://www.smartkarma.com/entities/s-p-asx-200" target="_blank" data-smartkarma-citation="entities:22901:1" rel="noopener">S&amp;P/ASX 200 (AS51 INDEX)</a> and S&amp;P/ASX 300 Index in September as part of the regular rebalance. </li>
<li>There is large short interest on a couple of the potential adds and a lot of the potential deletes. That will drive stock price moves closer to implementation.</li>
</ul>


There could be one change to the S&amp;P/ASX 200 (AS51 INDEX) in July following the privatisation of Uniti Group Ltd (UWL AU). 
Then there will be a whole bunch of changes to the S&amp;P/ASX 100 Index, S&amp;P/ASX 200 (AS51 INDEX) and S&amp;P/ASX 300 Index in September as part of the regular rebalance. 
There is large short interest on a couple of the potential adds and a lot of the potential deletes. That will drive stock price moves closer to implementation.


S&P/​​ASX Index Rebalance Preview (Sep): Plenty of High Impact Changes

<ul>
<li>A KKR led consortium has made a conditional, non-binding, indicative proposal to acquire 100% of the shares in <a href="https://www.smartkarma.com/entities/ramsay-health-care-ltd" target="_blank" data-smartkarma-citation="entities:673:1" rel="noopener">Ramsay Health Care (RHC AU)</a> at A$88/share in cash.</li>
<li>The offer values <a href="https://www.smartkarma.com/entities/ramsay-health-care-ltd" target="_blank" data-smartkarma-citation="entities:673:1" rel="noopener">Ramsay Health Care (RHC AU)</a> at A$20.14bn and is a premium of 36.7% to the last close. The premium is over 30% even using longer term VWAPs.</li>
<li>There will be changes to the S&amp;P/ASX family of indices to maintain the number of index members. We will know more once an indicative timeline is published.</li>
</ul>


A KKR led consortium has made a conditional, non-binding, indicative proposal to acquire 100% of the shares in Ramsay Health Care (RHC AU) at A$88/share in cash.
The offer values Ramsay Health Care (RHC AU) at A$20.14bn and is a premium of 36.7% to the last close. The premium is over 30% even using longer term VWAPs.
There will be changes to the S&amp;P/ASX family of indices to maintain the number of index members. We will know more once an indicative timeline is published.


Ramsay Health Care (RHC AU): Indicative Proposal from KKR & Index Implications

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>The S&amp;P DJI Index team announced the replacement for <a href="https://www.smartkarma.com/entities/ausnet-services" target="_blank" data-smartkarma-citation="entities:10293:1" rel="noopener">Ausnet Services (AST AU)</a> when it is deleted from the S&amp;P/ASX200 Friday at the close: <a href="https://www.smartkarma.com/entities/arena-reit" target="_blank" data-smartkarma-citation="entities:12209:1" rel="noopener">Arena Reit (ARF AU)</a> </li>
<li>There are other changes to sub-indices which are not publicly announced but which should align with previous analysis</li>
<li>This insight provides estimates for the index events Friday and ways to play them.</li>
</ul>


The S&amp;P DJI Index team announced the replacement for Ausnet Services (AST AU) when it is deleted from the S&amp;P/ASX200 Friday at the close: Arena Reit (ARF AU) 
There are other changes to sub-indices which are not publicly announced but which should align with previous analysis
This insight provides estimates for the index events Friday and ways to play them.


This morning 18 October, 2021, <a href="https://www.smartkarma.com/entities/homeco-daily-needs-reit" target="_blank" data-smartkarma-citation="entities:33526:1" rel="noopener">HomeCo Daily Needs REIT (HDN AU)</a> and <a href="https://www.smartkarma.com/entities/aventus-group" target="_blank" data-smartkarma-citation="entities:25897:1" rel="noopener">Aventus Group (AVN AU)</a> announced they had entered into a Binding Scheme Implementation Deed for HDS to acquire AVN through a Scheme of Arrangement. This will create a combined portfolio of A$4.1bn and a combined market cap of A$3.2bn on a pro-forma basis. Terms are that AVN security-holders will receive 2.2 HDN securities AND either A$0.285/unit of cash or 0.038 HMC securities (either or, not a combination). HDN is contributing 93% of the total consideration paid to AVN holders. <a href="https://www.smartkarma.com/entities/home-consortium-ltd" target="_blank" data-smartkarma-citation="entities:29082:1" rel="noopener">Home Consortium Ltd (HMC AU)</a> is contributing the other 7%, which will lower HMC's ownership of HDN post-merger. The consideration results in a premium of 15.3% from the Friday close, a 16.4% premium to one-month VWAP, and a 41.9% premium to 30 June 2021. There is ~4% accretion involved for security-holders of both sides assuming the cash option is take-up.Both HDN and AVN boards unanimously recommend/support the deal (AVN in the absence of a superior proposal) and AVN shareholders and directors representing 29.3% of AVN voting rights (22.6% by BBRC Retail and 6.7% by the AVN Board) have agreed to vote for the Scheme. Separately, HMC has done a deal to buy a 6% stake in AVN directly from BBRC at a cash amount equal to the Offer Price. That will leave the HMC holding at 13.5% post-merger.HDN is the smaller of the two and existing AVN shareholders will end up with nearly 57% of the total NEWCO HDN shares out after the deal (AVN minorities will have 47.1% while after selling 6% to HMC, BBRC will have 10.1%). HMC will have 13.5% of the post-merger business. Importantly, the entire management team of AVN is expected to join HMC, and the CEO and CFO of AVN will become CEO and CFO, respectively, of HDN MergeCo.The Scheme Booklet will be out in about two months, the Scheme meeting executed in late January 2022, and implementation will be mid-February under the proposed schedule. This looks like a decent deal, and a done deal.

This morning 18 October, 2021, HomeCo Daily Needs REIT (HDN AU) and Aventus Group (AVN AU) announced they had entered into a Binding Scheme Implementation Deed for HDS to acquire AVN through a Scheme of Arrangement. This will create a combined portfolio of A$4.1bn and a combined market cap of A$3.2bn on a pro-forma basis. Terms are that AVN security-holders will receive 2.2 HDN securities AND either A$0.285/unit of cash or 0.038 HMC securities (either or, not a combination). HDN is contributing 93% of the total consideration paid to AVN holders. Home Consortium Ltd (HMC AU) is contributing the other 7%, which will lower HMC's ownership of HDN post-merger. The consideration results in a premium of 15.3% from the Friday close, a 16.4% premium to one-month VWAP, and a 41.9% premium to 30 June 2021. There is ~4% accretion involved for security-holders of both sides assuming the cash option is take-up.Both HDN and AVN boards unanimously recommend/support the deal (AVN in the absence of a superior proposal) and AVN shareholders and directors representing 29.3% of AVN voting rights (22.6% by BBRC Retail and 6.7% by the AVN Board) have agreed to vote for the Scheme. Separately, HMC has done a deal to buy a 6% stake in AVN directly from BBRC at a cash amount equal to the Offer Price. That will leave the HMC holding at 13.5% post-merger.HDN is the smaller of the two and existing AVN shareholders will end up with nearly 57% of the total NEWCO HDN shares out after the deal (AVN minorities will have 47.1% while after selling 6% to HMC, BBRC will have 10.1%). HMC will have 13.5% of the post-merger business. Importantly, the entire management team of AVN is expected to join HMC, and the CEO and CFO of AVN will become CEO and CFO, respectively, of HDN MergeCo.The Scheme Booklet will be out in about two months, the Scheme meeting executed in late January 2022, and implementation will be mid-February under the proposed schedule. This looks like a decent deal, and a done deal. 

HomeCo Daily Needs REIT (HDN AU) To Merge with Aventus (AVN AU) In Self-Takeunder

Australia

Region RE Limited operates as a real estate investment trust. The Company focuses on investments in shopping centre, liquor retailers, and discount department stores. Region RE serves customers in Australia.

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Region RE (RGN AU)

OZ Minerals (OZL): BHP Offer Swiftly Rejected

BHP's offer to acquire all shares in OZL at A$25/share (32% premium to last close) was rejected. There should be a higher offer coming in and could...

Brian Freitas

S&P/ASX Index Rebalance Preview (Sep): Plenty of High Impact Changes

There are a lot of potential changes to the S&P/ASX family of indices over the next few months. Passive trading impact is high on a lot of stocks...

Brian Freitas

Ramsay Health Care (RHC AU): Indicative Proposal from KKR & Index Implications

A KKR led consortium has made a conditional, non-binding, indicative proposal to acquire 100% of Ramsay Health Care (RHC AU) at A$88/share in cash....

Brian Freitas

S&P/ASX200 - Ausnet OUT, Arena REIT IN

The S&P/ASX 200 will see Ausnet replaced by Arena REIT on 4 Feb. This is widely expected/predicted and Arena has outperformed, but it is a lot of...

Travis Lundy

HomeCo Daily Needs REIT (HDN AU) To Merge with Aventus (AVN AU) In Self-Takeunder

Home Daily Needs is merging with the larger Aventus under the HCM umbrella where AVN execs will take over HDN mgmt. This is OK, and will probably...

Travis Lundy

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52-week Range

Market Cap (USDm)

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OZ Minerals (OZL): BHP Offer Swiftly Rejected

BHP's offer to acquire all shares in OZL at A$25/share (32% premium to last close) was rejected. There should be a higher offer coming in and could...

Brian Freitas

S&P/​​ASX Index Rebalance Preview (Sep): Plenty of High Impact Changes

There are a lot of potential changes to the S&P/ASX family of indices over the next few months. Passive trading impact is high on a lot of stocks...

Brian Freitas

Ramsay Health Care (RHC AU): Indicative Proposal from KKR & Index Implications

A KKR led consortium has made a conditional, non-binding, indicative proposal to acquire 100% of Ramsay Health Care (RHC AU) at A$88/share in cash....

Brian Freitas

S&P/ASX200 - Ausnet OUT, Arena REIT IN

The S&P/ASX 200 will see Ausnet replaced by Arena REIT on 4 Feb. This is widely expected/predicted and Arena has outperformed, but it is a lot of...

Travis Lundy

HomeCo Daily Needs REIT (HDN AU) To Merge with Aventus (AVN AU) In Self-Takeunder

Home Daily Needs is merging with the larger Aventus under the HCM umbrella where AVN execs will take over HDN mgmt. This is OK, and will probably...

Travis Lundy

S&P/ASX Index Rebalance Preview (Sep): Plenty of High Impact Changes