European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>Bain has a 10.01% stake (likely acquired &lt;€32/share) and could play nasty: its stake is enough to block a squeeze-out, and if it launches a €34/share offer, it will be hostile.</li>
<li>Meanwhile, Silver Lake (5% recently acquired+25.1% from the foundation) has sweetened to €32/share (19.4x EV/Fwd EBIT, well above 11.1x last-10y average). The Board could change sides (as recently with Caverion).</li>
<li>The shares trade 3.5% above Silver Lake's, but at a discount of 2.5% to Bain's possible offer. The market believes Bain will bid. I raise my TP to €32.</li>
</ul>


Bain has a 10.01% stake (likely acquired &lt;€32/share) and could play nasty: its stake is enough to block a squeeze-out, and if it launches a €34/share offer, it will be hostile.
Meanwhile, Silver Lake (5% recently acquired+25.1% from the foundation) has sweetened to €32/share (19.4x EV/Fwd EBIT, well above 11.1x last-10y average). The Board could change sides (as recently with Caverion).
The shares trade 3.5% above Silver Lake's, but at a discount of 2.5% to Bain's possible offer. The market believes Bain will bid. I raise my TP to €32.


<ul>
<li>Silver Lake has announced its intention to launch a cash offer to delist Software AG at €30/share (53% premium, 12.7x EV/NTM EBITDA, 20.5x Fwd P/E), targeting 37% of the float.</li>
<li>The Board is suportive and Silver Lake does not seek a domination agreement. The offer price <strong>will not be adjusted</strong> by the next dividend (€0.05, ex-date 19 May).</li>
<li>My fair value estimate (EV/EBITDA based) is €26.54/share, the offer price seems adequate. The offer targets 37.6% of the float, feasible. Gross spread (incl. divi) is 0.97%, not terribly exciting.</li>
</ul>


Silver Lake has announced its intention to launch a cash offer to delist Software AG at €30/share (53% premium, 12.7x EV/NTM EBITDA, 20.5x Fwd P/E), targeting 37% of the float.
The Board is suportive and Silver Lake does not seek a domination agreement. The offer price will not be adjusted by the next dividend (€0.05, ex-date 19 May).
My fair value estimate (EV/EBITDA based) is €26.54/share, the offer price seems adequate. The offer targets 37.6% of the float, feasible. Gross spread (incl. divi) is 0.97%, not terribly exciting.


Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Wuestenrot & Wuerttembergische / Event-Driven

<ul>
<li>The March 2023 index changes for the DAX index family were confirmed after the close on Friday 3rd March 2023.</li>
<li>There will be one change for DAX, two for MDAX, and two for SDAX mostly in line with our expectations. Separately, there is also a change in TecDAX.</li>
<li>In this insight, we take a closer look at our expectations for index flows and the recent price and volume performance of the names involved in the index rebalance event.</li>
</ul>


The March 2023 index changes for the DAX index family were confirmed after the close on Friday 3rd March 2023.
There will be one change for DAX, two for MDAX, and two for SDAX mostly in line with our expectations. Separately, there is also a change in TecDAX.
In this insight, we take a closer look at our expectations for index flows and the recent price and volume performance of the names involved in the index rebalance event.


Quiddity Flow Expectations for DAX Mar 23 Rebal: WUW GR Vs SDAX Seems Interesting

<ul>
<li>In this insight, we take a look at the names leading the race to become ADDs/DELETEs for the DAX, MDAX, and SDAX Indices.</li>
<li>In the March 2023 review, I do not see any changes for the DAX index although a couple names are close to the border.</li>
<li>As it stands, I currently expect two more changes between MDAX and SDAX and one more ADD/DEL for the SDAX index based on the latest available data.</li>
</ul>


In this insight, we take a look at the names leading the race to become ADDs/DELETEs for the DAX, MDAX, and SDAX Indices.
In the March 2023 review, I do not see any changes for the DAX index although a couple names are close to the border.
As it stands, I currently expect two more changes between MDAX and SDAX and one more ADD/DEL for the SDAX index based on the latest available data.


Quiddity Leaderboard for DAX Mar 23: Linde DEL Triggers US$2.7bn Reverse Funding Flows

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>Our outlook remains bullish and we continue to believe that the path of least resistance remains higher for global equities (MSCI ACWI). As long as the MSCI ACWI (ACWI-US), ACWI ex-US (ACWX-US), EM (EEM-US), and EAFE (EFA-US) are above their respective intermediate-term support levels we believe a positive outlook is warranted. Support levels to watch include $75 on ACWI-US, $44 on ACWX-US, $41 on EEM-US, and $60 on EFA-US. We recap significant technical levels across major markets and highlight specific opportunities within the Technology and Materials Sectors.</p>

Our outlook remains bullish and we continue to believe that the path of least resistance remains higher for global equities (MSCI ACWI). As long as the MSCI ACWI (ACWI-US), ACWI ex-US (ACWX-US), EM (EEM-US), and EAFE (EFA-US) are above their respective intermediate-term support levels we believe a positive outlook is warranted. Support levels to watch include $75 on ACWI-US, $44 on ACWX-US, $41 on EEM-US, and $60 on EFA-US. We recap significant technical levels across major markets and highlight specific opportunities within the Technology and Materials Sectors.

Global Equity Strategy: Bullish Outlook Intact

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)

Sweetened Offer and Bain Interloping

Software AG agreed on 4 May to amend the investment agreement concluded on 21 April with Silver Lake. The offer price is increased to €32.00, an...

Jesus Rodriguez Aguilar

Silver Lake/Software AG: Agreed Offer

Silver Lake offers €30/share in cash (plus €0.05 divi), 53% premium, 12.7x EV/Fwd NTM EBITDA and 20.5x Fwd P/E, and intends to delist Software AG....

Jesus Rodriguez Aguilar

Quiddity Flow Expectations for DAX Mar 23 Rebal: WUW GR Vs SDAX Seems Interesting

I would be Bullish SDAX ADD Wuestenrot & Wuerttembergische (WUW GR) vs the SDAX index because historically SDAX ADDs have clearly outperformed the...

Janaghan Jeyakumar, CFA

Quiddity Leaderboard for DAX Mar 23: Linde DEL Triggers US$2.7bn Reverse Funding Flows

The largest DAX member Linde AG (LIN GR) is expected to get deleted in February 2023 triggering extraordinary index changes and US$2.7bn in reverse...

Janaghan Jeyakumar, CFA

Global Equity Strategy: Bullish Outlook Intact

Our outlook remains bullish and we continue to believe that the path of least resistance remains higher for global equities (MSCI ACWI). As long as...

Vermilion Research

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