Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<p>On the 19 April, Oaktree <a href="https://www.smartkarma.com/compose/insight/53085/uyout%20Mr%20Packer%20via%20a%20%E2%80%9Ca%20structured%20instrument%20with%20the%20proceeds%20to%20be%20used%20by%20Crown%20to%20buy%20back%20some%20or%20all%20of%20the%20Crown%20shares%E2%80%9D%20held%20by%20his%20private%20company,%20Consolidated%20Press%20Holdings." target="_blank" rel="noopener">made</a> an $3bn unsolicited proposal to CWN's board via a then-undetermined debt/equity structure.</p>
<p>The transaction was geared to buy James Packer 37% stake in CWN via “<em>a structured instrument with the proceeds to be used by Crown to buy back some or all of the Crown shares</em>” held by his Packer's private company, Consolidated Press Holdings (CPH).</p>
<p>It was hardly a clean counter to Blackstone's cash Offer of <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02355769-3A563928?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">$11.85/share</a>. And questions remained as to size of the equity stake and the facility's interest rate. </p>
<p>Blackstone subsequently increased its non-binding proposal for CWN by 4% on the 4 May to <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02372885-3A566842?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">$12.35</a>. Shortly after, Crown's domestic rival <a href="https://www.smartkarma.com/entities/star-entertainment-grp-ltd" target="_blank" data-smartkarma-citation="entities:926:1" rel="noopener">Star Entertainment Grp (SGR AU)</a> lobbed a non-binding <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02372888_PS-3A566843?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">proposal</a>, by way of a Scheme, either via the issuance of 2.68 new Star shares for every Crown share, or a possible cash alternative of A$12.50/share, subject to clawback.</p>
<p>Crown summarily concluded  Blackstone's Offer <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02375134-3A567212?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">undervalued</a> the company, but it required <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02375140-3A567213?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">more information</a> from Star to finalise its decisions. There was no comment on Oaktree's offer.</p>
<h3>The New News</h3>
<p>This morning Oaktree <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02384403-3A568800?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">bumped its proposal/facility</a> to $3.1bn, incorporating a 2bn private term loan and a $1.1bn loan convertible into new shares. </p>
<p>The facility would be used to selectively buyback CPH's shares in CWN.</p>
<p>The convertible would be convertible into new shares of CWN at A$13/share, with such conversion capped at 9.99% of Crown's outstanding shares.</p>
<p>It's an interesting proposition. Plus it sticks a $13/share handle out there.</p>
<p>More below the fold.</p>

On the 19 April, Oaktree made an $3bn unsolicited proposal to CWN's board via a then-undetermined debt/equity structure.
The transaction was geared to buy James Packer 37% stake in CWN via “a structured instrument with the proceeds to be used by Crown to buy back some or all of the Crown shares” held by his Packer's private company, Consolidated Press Holdings (CPH).
It was hardly a clean counter to Blackstone's cash Offer of $11.85/share. And questions remained as to size of the equity stake and the facility's interest rate. 
Blackstone subsequently increased its non-binding proposal for CWN by 4% on the 4 May to $12.35. Shortly after, Crown's domestic rival Star Entertainment Grp (SGR AU) lobbed a non-binding proposal, by way of a Scheme, either via the issuance of 2.68 new Star shares for every Crown share, or a possible cash alternative of A$12.50/share, subject to clawback.
Crown summarily concluded  Blackstone's Offer undervalued the company, but it required more information from Star to finalise its decisions. There was no comment on Oaktree's offer.
The New News
This morning Oaktree bumped its proposal/facility to $3.1bn, incorporating a 2bn private term loan and a $1.1bn loan convertible into new shares. 
The facility would be used to selectively buyback CPH's shares in CWN.
The convertible would be convertible into new shares of CWN at A$13/share, with such conversion capped at 9.99% of Crown's outstanding shares.
It's an interesting proposition. Plus it sticks a $13/share handle out there.
More below the fold.

Crown Resorts (CWN AU): Oaktree's Intriguing Proposal

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<p>On the 10 May, Blackstone increased its non-binding proposal for <a href="https://www.smartkarma.com/entities/crown-resorts-ltd" target="_blank" data-smartkarma-citation="entities:808:1" rel="noopener">Crown Resorts (CWN AU)</a> by 4% to <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02372885-3A566842?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">$12.35</a>. Shortly after, Crown's domestic rival <a href="https://www.smartkarma.com/entities/star-entertainment-grp-ltd" target="_blank" data-smartkarma-citation="entities:926:1" rel="noopener">Star Entertainment Grp (SGR AU)</a> lobbed an unsolicited, non-binding, and indicative <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02372888_PS-3A566843?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">proposal</a>, by way of a Scheme, either via the issuance of 2.68 new Star shares for every Crown share, or a possible cash alternative of A$12.50/share, subject to clawback.</p>
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<div>
<p>In <em><a href="https://skr.ma/7hWBx" target="_blank" rel="noopener">Crown Resorts: Blackstone &amp; Star Place Their Bets</a></em>, I concluded both Offers were light.</p>
<p>This morning Crown agreed that Blackstone's Offer <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02375134-3A567212?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">undervalued</a> the company. But that it required <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02375140-3A567213?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">more information</a> from Star before finalising its view on the cash/scrip Offer. Based on the pushback to Blackstone's Offer, it is difficult to see the board recommending Star's A$0.15/share premium.</p>
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<div>
<p>More below the fold. </p>
</div>


On the 10 May, Blackstone increased its non-binding proposal for Crown Resorts (CWN AU) by 4% to $12.35. Shortly after, Crown's domestic rival Star Entertainment Grp (SGR AU) lobbed an unsolicited, non-binding, and indicative proposal, by way of a Scheme, either via the issuance of 2.68 new Star shares for every Crown share, or a possible cash alternative of A$12.50/share, subject to clawback.


In Crown Resorts: Blackstone &amp; Star Place Their Bets, I concluded both Offers were light.
This morning Crown agreed that Blackstone's Offer undervalued the company. But that it required more information from Star before finalising its view on the cash/scrip Offer. Based on the pushback to Blackstone's Offer, it is difficult to see the board recommending Star's A$0.15/share premium.


More below the fold. 


Crown Says Blackstone's Bid Is Light. Undecided On Star

Last Week in Event SPACE: Prosus/Naspers, Wilmar, Invesco Office, Boral, Honshu Chem, Crown Resorts

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<p>When <a href="https://www.smartkarma.com/entities/crown-resorts-ltd" target="_blank" data-smartkarma-citation="entities:808:1" rel="noopener">Crown Resorts (CWN AU)</a> <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02355769-3A563928?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a> on the 22 March it had received an unsolicited, non-binding and indicative takeover <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02355769-3A563928?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">proposal</a>, by way of a Scheme, from Blackstone, at $11.85/share - a 19% premium to the average price of Crown's shares since the release of its <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02342917-3A561577?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">1H21 results</a>, my initial takeaway was "<em>Blackstone needs to bid higher</em>".</p>
<p>This morning, Blackstone did just that - increasing its non-binding proposal by 4% to <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02372885-3A566842?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">$12.35</a>.</p>
<p>Seven minutes later, Crown's domestic rival <a href="https://www.smartkarma.com/entities/star-entertainment-grp-ltd" target="_blank" data-smartkarma-citation="entities:926:1" rel="noopener">Star Entertainment Grp (SGR AU)</a> tabled an unsolicited, non-binding, and indicative <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02372888_PS-3A566843?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">proposal</a>, by way of a Scheme, either via the issuance of 2.68 new Star shares for every Crown share, or a possible cash alternative of A$12.50/share, subject to a scale back.</p>
<p>Both Offers still look light.</p>
<p>More below the fold. </p>
</div>


When Crown Resorts (CWN AU) announced on the 22 March it had received an unsolicited, non-binding and indicative takeover proposal, by way of a Scheme, from Blackstone, at $11.85/share - a 19% premium to the average price of Crown's shares since the release of its 1H21 results, my initial takeaway was "Blackstone needs to bid higher".
This morning, Blackstone did just that - increasing its non-binding proposal by 4% to $12.35.
Seven minutes later, Crown's domestic rival Star Entertainment Grp (SGR AU) tabled an unsolicited, non-binding, and indicative proposal, by way of a Scheme, either via the issuance of 2.68 new Star shares for every Crown share, or a possible cash alternative of A$12.50/share, subject to a scale back.
Both Offers still look light.
More below the fold. 


Crown Resorts: Blackstone & Star Place Their Bets

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

TSE Tokyo Price Index TOPIX / Technical Analysis

<p>Despite EAFE’s YTD outperformance relative to EM, EAFE and EM returns have generally been equal since August, shown by the stalemate in the EAFE vs. EM ratio. The U.S. dollar (DXY) is currently trading near support within the 16-17 month uptrend channel. Technicals suggest the most likely scenario is for the DXY uptrend to continue and for support to hold -- which would likely result in EAFE reasserting as leadership.  In this publication we highlight attractive investment themes and individual ideas across developed markets, with special attention given to Japan, Germany, Sweden, Italy, Spain, and Switzerland.</p>

Despite EAFE’s YTD outperformance relative to EM, EAFE and EM returns have generally been equal since August, shown by the stalemate in the EAFE vs. EM ratio. The U.S. dollar (DXY) is currently trading near support within the 16-17 month uptrend channel. Technicals suggest the most likely scenario is for the DXY uptrend to continue and for support to hold -- which would likely result in EAFE reasserting as leadership.  In this publication we highlight attractive investment themes and individual ideas across developed markets, with special attention given to Japan, Germany, Sweden, Italy, Spain, and Switzerland.

Developed Markets Strategy: Stick with Japan

Australia

The Star Entertainment Group Limited owns and operates casinos and hotels. The Company offers services and amenities such as gaming facilities, nightclubs, bars, restaurants, exhibition centers. The Star Entertainment Group conducts business in Australia.

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Star Entertainment Group (SGR AU)

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Despite EAFE’s YTD outperformance relative to EM, EAFE and EM returns have generally been equal since August, shown by the stalemate in the EAFE...

Vermilion Research

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