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.

Event-Driven

<p>On Thursday, <a href="https://www.smartkarma.com/entities/374" target="_blank" data-smartkarma-citation="entities:374:1">MYOB Group Ltd (MYO AU)</a> released its Scheme Booklet in which the Independent Expert, Grant Samuel, valued MYOB between A$3.19 and A$3.69 per share. Consequently, Grant Samuel concluded that <a href="https://www.smartkarma.com/entities/27333" target="_blank" data-smartkarma-citation="entities:27333:1">KKR &amp; Co Inc (KKR US)</a>'s revised proposal of A$3.40 cash per share is fair and reasonable. However, Manikay Partners continues to voice concerns about the KKR proposal as it believes MYOB is worth well in excess of A$4.00 per share.</p><div class="content-highlight"><p>With the shares 4 cents below KKR’s revised proposal, we continue to believe shareholders should cash out as Manikay’s valuation is only justifiable if MYOB’s delivers flawless execution.</p></div>

On Thursday, MYOB Group Ltd (MYO AU) released its Scheme Booklet in which the Independent Expert, Grant Samuel, valued MYOB between A$3.19 and A$3.69 per share. Consequently, Grant Samuel concluded that KKR &amp; Co Inc (KKR US)'s revised proposal of A$3.40 cash per share is fair and reasonable. However, Manikay Partners continues to voice concerns about the KKR proposal as it believes MYOB is worth well in excess of A$4.00 per share.With the shares 4 cents below KKR’s revised proposal, we continue to believe shareholders should cash out as Manikay’s valuation is only justifiable if MYOB’s delivers flawless execution.

MYOB (MYO AU): Manikay’s Valuation Requires Flawless Execution

<p>On 5 March 2019, Manikay Partners, an 11% shareholder, wrote to <a href="https://www.smartkarma.com/entities/374" target="_blank" data-smartkarma-citation="entities:374:1">MYOB Group Ltd (MYO AU)</a> chairman Justin Milne to reveal that it believed that <a href="https://www.smartkarma.com/entities/27333" target="_blank" data-smartkarma-citation="entities:27333:1">KKR &amp; Co Inc (KKR US)</a>’s recommended offer of $3.40 cash per share was too low due to the significant market rally and normalisation of financing markets.</p><div class="content-highlight"><p>Manikay believes MYOB is worth well in excess of A$4.00 per share. Manikay intends to use the threat of a shareholder rejection to get KKR to sweeten its bid, in our view. However, we believe that KKR has little reason to increase its bid. With the shares just 1 cent below KKR’s revised proposal, we believe shareholders should cash out.</p></div>

On 5 March 2019, Manikay Partners, an 11% shareholder, wrote to MYOB Group Ltd (MYO AU) chairman Justin Milne to reveal that it believed that KKR &amp; Co Inc (KKR US)’s recommended offer of $3.40 cash per share was too low due to the significant market rally and normalisation of financing markets.Manikay believes MYOB is worth well in excess of A$4.00 per share. Manikay intends to use the threat of a shareholder rejection to get KKR to sweeten its bid, in our view. However, we believe that KKR has little reason to increase its bid. With the shares just 1 cent below KKR’s revised proposal, we believe shareholders should cash out.

<p><a href="https://www.smartkarma.com/entities/374" target="_blank" data-smartkarma-citation="entities:374:1">MYOB Group Ltd (MYO AU)</a>'s shares are trading A$3.42, marginally above <a href="https://www.smartkarma.com/entities/27333" target="_blank" data-smartkarma-citation="entities:27333:1">KKR &amp; Co Inc (KKR US)</a>'s revised lower offer of A$3.40 cash per share, due to the expectation of a bidder trumping KKR. The optimism has also been stoked by the sharp market rally since MYOB agreed to recommend KKR's revised lower offer on 24 December 2018. The ASX 200 and ASX 300 Information Technology Index has rallied 10% and 20% respectively from 24 December 2018 to 15 February 2019.</p><div class="content-highlight"><p>While shareholders may feel like KKR is acquiring MYOB at a knockdown price, the market could quickly revert to a downward trend. We believe that shareholders hoping for a white knight to ride to the rescue will be disappointed.</p></div>

MYOB Group Ltd (MYO AU)'s shares are trading A$3.42, marginally above KKR &amp; Co Inc (KKR US)'s revised lower offer of A$3.40 cash per share, due to the expectation of a bidder trumping KKR. The optimism has also been stoked by the sharp market rally since MYOB agreed to recommend KKR's revised lower offer on 24 December 2018. The ASX 200 and ASX 300 Information Technology Index has rallied 10% and 20% respectively from 24 December 2018 to 15 February 2019.While shareholders may feel like KKR is acquiring MYOB at a knockdown price, the market could quickly revert to a downward trend. We believe that shareholders hoping for a white knight to ride to the rescue will be disappointed.

MYOB (MYO AU): KKR Making Out like Bandits Due to a Sharp Market Rally

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

<p>Broad global indexes (MSCI ACWI, ACWI ex-U.S., and EAFE) are showing signs of bottoming due to positive short-term price inflections topside their respective downtrends. Additionally, cyclical Sectors Technology, Consumer Discretionary, and Manufacturing exhibit early signs of price and RS bottoms throughout Europe, Japan, and EM.  In today’s report we highlight attractive and actionable opportunities within these cyclical Sectors, and provide a technical appraisal of major global indexes.</p>

Broad global indexes (MSCI ACWI, ACWI ex-U.S., and EAFE) are showing signs of bottoming due to positive short-term price inflections topside their respective downtrends. Additionally, cyclical Sectors Technology, Consumer Discretionary, and Manufacturing exhibit early signs of price and RS bottoms throughout Europe, Japan, and EM.  In today’s report we highlight attractive and actionable opportunities within these cyclical Sectors, and provide a technical appraisal of major global indexes.

Global Equity Strategy: Global Outlook Improving

<p>On 24 December, <a href="https://www.smartkarma.com/entities/374" target="_blank" data-smartkarma-citation="entities:374:1">MYOB Group Ltd (MYO AU)</a> announced that it entered into a scheme implementation agreement under which KKR will acquire MYOB at $3.40 per share, which is 10% lower than 2 November offer price of A$3.77. MYOB claims its decision to recommend KKR's lower offer was based on current market uncertainty, long-term nature of its strategic growth plans and the go-shop provisions of the deal. </p><div class="content-highlight"><p>We believe that KKR's revised offer is opportunistic, but MYOB's shareholders are caught between a rock and a hard place. Shareholders can take a short-term view and grudgingly accept the revised offer. Alternatively, shareholders can take a long-term view by rejecting the offer and hope MYOB's strategic growth plans and a market recovery can reverse the inevitable share price collapse.</p></div>

On 24 December, MYOB Group Ltd (MYO AU) announced that it entered into a scheme implementation agreement under which KKR will acquire MYOB at $3.40 per share, which is 10% lower than 2 November offer price of A$3.77. MYOB claims its decision to recommend KKR's lower offer was based on current market uncertainty, long-term nature of its strategic growth plans and the go-shop provisions of the deal. We believe that KKR's revised offer is opportunistic, but MYOB's shareholders are caught between a rock and a hard place. Shareholders can take a short-term view and grudgingly accept the revised offer. Alternatively, shareholders can take a long-term view by rejecting the offer and hope MYOB's strategic growth plans and a market recovery can reverse the inevitable share price collapse.

MYOB (MYO AU): Shareholders Are Caught Between a Rock and a Hard Place

United Kingdom

The Sage Group plc is a software publishing company. The Group develops, publishes and distributes accounting and payroll software for personal computer systems. Via its subsidiaries, Sage also maintains a registered user database which provides a market for their related products and services, including computer forms, software support contracts, program upgrades and training.

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Sage Group (SGE LN)

MYOB (MYO AU): Manikay’s Valuation Requires Flawless Execution

On Thursday, MYOB Group Ltd (MYO AU) released its Scheme Booklet in which the Independent Expert, Grant Samuel, valued MYOB between A$3.19 and...

Arun George

MYOB (MYO AU): Head for the Exit

On 5 March 2019, Manikay Partners, an 11% shareholder, wrote to MYOB Group Ltd (MYO AU) chairman Justin Milne to reveal that it believed that KKR...

Arun George

MYOB (MYO AU): KKR Making Out like Bandits Due to a Sharp Market Rally

MYOB Group Ltd (MYO AU)'s shares are trading A$3.42, marginally above KKR & Co Inc (KKR US)'s revised lower offer of A$3.40 cash per share, due...

Arun George

Global Equity Strategy: Global Outlook Improving

Broad global indexes (MSCI ACWI, ACWI ex-U.S., and EAFE) are showing signs of bottoming due to positive short-term price inflections topside their...

Vermilion Research

MYOB (MYO AU): Shareholders Are Caught Between a Rock and a Hard Place

On 24 December, MYOB Group Ltd (MYO AU) announced that it entered into a scheme implementation agreement under which KKR will acquire MYOB at $3.40...

Arun George

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