Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>RMB dual counter started trading. <a href="https://www.smartkarma.com/entities/great-wall-motor-co-ltd-cb302af9-398c-4d2d-ba39-023e43287eef" target="_blank" data-smartkarma-citation="entities:128:1" rel="noopener">Great Wall Motor (2333 HK)</a>'s A-shares trade at 3x the multiple. THAT is a big discount to harvest. </li>
<li>
<a href="https://www.smartkarma.com/entities/china-feihe-ltd" target="_blank" data-smartkarma-citation="entities:24413:1" rel="noopener">China Feihe (6186 HK)</a>'s CFO exits an indirect stake of 6.38% around Feihe's all-time low. </li>
<li>
<a href="https://www.smartkarma.com/entities/ecopro-co-ltd" target="_blank" data-smartkarma-citation="entities:19029:1" rel="noopener">EcoPro Co Ltd (086520 KS)</a> has swatted aside analyst downgrades and the indictment of its chairman to touch an all-time high</li>
</ul>


RMB dual counter started trading. Great Wall Motor (2333 HK)'s A-shares trade at 3x the multiple. THAT is a big discount to harvest. 

China Feihe (6186 HK)'s CFO exits an indirect stake of 6.38% around Feihe's all-time low. 

EcoPro Co Ltd (086520 KS) has swatted aside analyst downgrades and the indictment of its chairman to touch an all-time high


Last Week in Event SPACE: Great Wall Motor, China Feihe, EcoPro, PCCW

European Event-Driven Analyst

Jesus Rodriguez Aguilar

<ul>
<li>Silver Lake announced it waived the minimum acceptance threshold of 50% + 1 share in  its offer for <a href="https://www.smartkarma.com/entities/software-ag" target="_blank" data-smartkarma-citation="entities:21717:1" rel="noopener">Software AG (SOW GR)</a> . The acceptance period has been extended until 28 June.</li>
<li>Bain Capital abandons the pursuit and will sell its 10.01% stake to Silver Lake, which will now controls 41%, plus another 10% from a convertible bond.</li>
<li>Silver Lake is now pressing the minority shareholders to tender. Spread is 1.44%/15.13% (gross/annualised), assuming settlement on 31 July. I believe that Silver Lake will be successful. Long and tender.</li>
</ul>


Silver Lake announced it waived the minimum acceptance threshold of 50% + 1 share in  its offer for Software AG (SOW GR) . The acceptance period has been extended until 28 June.
Bain Capital abandons the pursuit and will sell its 10.01% stake to Silver Lake, which will now controls 41%, plus another 10% from a convertible bond.
Silver Lake is now pressing the minority shareholders to tender. Spread is 1.44%/15.13% (gross/annualised), assuming settlement on 31 July. I believe that Silver Lake will be successful. Long and tender.


Silver Lake/Software AG: Bain Clears the Way

Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

<ul>
<li>The June 2023 index changes for the DAX index family were confirmed after the close yesterday.</li>
<li>As expected, there were no changes announced for the DAX index.</li>
<li>There will be four changes for MDAX, one change for SDAX, and one change for TecDAX.</li>
</ul>


The June 2023 index changes for the DAX index family were confirmed after the close yesterday.
As expected, there were no changes announced for the DAX index.
There will be four changes for MDAX, one change for SDAX, and one change for TecDAX.


Quiddity Flow Expectations for DAX Jun 23 Rebal: Evotec Is the Main Surprise

<ul>
<li>In this insight, we take a look at Quiddity's estimates for the names leading the race to become ADDs/DELETEs for the DAX, MDAX, and SDAX Indices.</li>
<li>As things stand, there will not be any ADDs or DELs from the DAX index or the SDAX index.</li>
<li>There could be two ADDs/DELs for the MDAX index in the June 2023 rebalance.</li>
</ul>


In this insight, we take a look at Quiddity's estimates for the names leading the race to become ADDs/DELETEs for the DAX, MDAX, and SDAX Indices.
As things stand, there will not be any ADDs or DELs from the DAX index or the SDAX index.
There could be two ADDs/DELs for the MDAX index in the June 2023 rebalance.


Quiddity Leaderboard-DAX Jun 23: Two Changes for the MDAX Index

<ul>
<li>Bain goes mildly hostile, with a €34/share indicative offer (20.5x EV/Fwd EBIT on IBES consensus), above 11.1x last-10y average. Further, if it fully succeeded, it'd raise to €36/share (21.6x).</li>
<li>Software AG dislikes the improved indicative offer. The situation reminds of the battle for <a href="https://www.smartkarma.com/entities/caverion-corp" target="_blank" data-smartkarma-citation="entities:21753:1" rel="noopener">Caverion Corp (CAV1V FH)</a>, now being played, in which precisely Bain has been the unexpected loser.</li>
<li>At this point, it seems Silver Lake will have to raise its offer again. I raise my TP to €34. Long (possible upside to Bain's €36/share, 6.1% gross).</li>
</ul>


Bain goes mildly hostile, with a €34/share indicative offer (20.5x EV/Fwd EBIT on IBES consensus), above 11.1x last-10y average. Further, if it fully succeeded, it'd raise to €36/share (21.6x).
Software AG dislikes the improved indicative offer. The situation reminds of the battle for Caverion Corp (CAV1V FH), now being played, in which precisely Bain has been the unexpected loser.
At this point, it seems Silver Lake will have to raise its offer again. I raise my TP to €34. Long (possible upside to Bain's €36/share, 6.1% gross).


Germany

Software AG operates as a software development company. The Company enables enterprises to integrate, connect, and manage IoT components, as well as analyze data and predict future events based on artificial intelligence. Software serves customers worldwide.

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Software (SOW GR)

Last Week in Event SPACE: Great Wall Motor, China Feihe, EcoPro, PCCW

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David Blennerhassett

Silver Lake/Software AG: Bain Clears the Way

With the minimum acceptance condition dropped and Bain selling its 10% to Silver Lake, the takeover seems clear. The market has reluctantly...

Jesus Rodriguez Aguilar

Quiddity Flow Expectations for DAX Jun 23 Rebal: Evotec Is the Main Surprise

Drug discovery company Evotec AG (EVT GR) was a surprise addition to the MDAX index. The stock was previously an ineligible candidate but its...

Janaghan Jeyakumar, CFA

Quiddity Leaderboard-DAX Jun 23: Two Changes for the MDAX Index

There are seven days left in the reference period. The index changes will be confirmed after the close on 5th June 2023 and the inclusions...

Janaghan Jeyakumar, CFA

Rocket Software (Bain) Ups the Game

On late evening 9 May, Rocket Software, a US competitor controlled by Bain Capital, submitted a revised legally non-binding expression of interest...

Jesus Rodriguez Aguilar

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