Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<h3><strong>The SHORT &amp; SWEET</strong></h3><ul>
<li>Australian banks are seeing or are going to see sharp hikes in H1 dividends this year despite APRA guidance to be prudent with capital decisions. </li>
<li>APRA changed its guidance on 29 July. </li>
<li>ANZ had announced a decent-sized buyback earlier in July and NAB announced one on 30 July. </li>
<li>Others are expected to announce buy-backs in August.</li>
</ul><h3>The Longer Introduction</h3><p>In April 2020 when markets were crashing and there was tremendous uncertainty about what ravages covid might bring to every sector of the economy, <a href="https://www.smartkarma.com/entities/national-australia-bank-ltd" target="_blank" data-smartkarma-citation="entities:15:1" rel="noopener">National Australia Bank (NAB AU)</a> slashed its dividend and launched a A$3.5bn capital raise. Other companies did the same, but the other major banks avoided a capital raise in 2020 because they had either raised equity earlier (all four majors raised equity in 2015, but <a href="https://www.smartkarma.com/entities/westpac-banking-corp" target="_blank" data-smartkarma-citation="entities:444:1" rel="noopener">Westpac Banking (WBC AU)</a> also raised in Nov 2019) or they cut or eliminated an interim dividend (ANZ and CBA cut theirs, and Westpac eliminated their div for H1 2020 entirely).</p><p>For NAB, the capital raise was an institutional share placement of A$3bn and a A$500mm Share Purchase Plan (SPP) targeting individual shareholders. The SPP was well-received, priced at A$14.15/share - the same price as the placement - so when books closed a month later and the market price was 10% higher, demand had been strong enough that the SPP was boosted by A$750mm to A$1.25bn. </p><p>That was probably overly cautious at the time, but it was a huge gift to shareholders. A week after the SPP shares started trading on 2 June, the shares were changing hands above A$20/share. </p><p>Fast forward almost a year later to the 6 May release of H1 earnings and the bank said it had too much capital with its Common Equity Tier 1 ratio at 12.37-12.40%. It noted it intended to take action to lower that but stay above APRA's Unquestionably Strong benchmark of 10.5%. This came despite APRA's <a href="https://www.apra.gov.au/news-and-publications/apra-issues-guidance-to-authorised-deposit-taking-institutions-and-insurers" target="_blank" rel="noopener">guidance</a> in early April of 2021 that it expected deposit-taking institutions it expected they (and other financial institutions) <em>"limit discretionary capital distributions in the months ahead, including deferrals or prudent reductions in dividends." </em>The 7 April <a href="https://www.apra.gov.au/sites/default/files/2020-04/Capital%20management.pdf" target="_blank" rel="noopener">letter</a> (pdf) on Capital Management said,</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/221/292/original/Screenshot+2021-07-31+at+3.03.52+PM.png?1627715057" class="editor-image img-responsive" data-smartkarma-image-id="221292"></figure><p></p></section><p>Interestingly, <a href="https://www.smartkarma.com/entities/australia-and-new-zealand-banking-group-anz" target="_blank" data-smartkarma-citation="entities:443:1" rel="noopener">Australia and New Zealand Banking Group (ANZ) (ANZ AU)</a> announced a A$1.5bn buyback - ~2% of market cap - on 19 July and the stock bounced $1/share to A$28/share over a few days. This was obviously discussed with APRA but ANZ CEO Shayne Elliott had said on 5 May when reporting a 126% increase in H1 profit helped by writebacks, and a jump in H1 div,  that the Australian economy was booming and said, “Australia is in really good shape in where we sit today," and he quite clearly laid out the case for a buyback then.</p><blockquote>
<p><strong> “We have an embarrassment of riches, if you will, in terms of excess capital.”</strong></p>
<p><strong>“Clearly the only path to get to 10.8, putting aside almost unimaginable growth in our balance sheet, would be some sort of capital management activity,”</strong></p>
<p>ANZ Bank CEO Shayne Elliott (5 May 2021)</p>
</blockquote><p>ANZ was first off the block.</p><p>On 29 July, APRA <a href="https://www.apra.gov.au/news-and-publications/apra-updates-guidance-on-capital-management-for-banks-and-insurers" target="_blank" rel="noopener">updated its guidance</a> and the <a href="https://www.apra.gov.au/sites/default/files/2020-07/Letter%20to%20authorised%20deposit-taking%20institutions%20-%20Capital%20management.pdf" target="_blank" rel="noopener">new letter</a> on capital management eliminates the strict requirement but maintains guidance on 50% dividend payout. </p><h3>New NAB News</h3><p>On Friday 30 July 2021, <a href="https://www.smartkarma.com/entities/national-australia-bank-ltd" target="_blank" data-smartkarma-citation="entities:15:1" rel="noopener">National Australia Bank (NAB AU)</a> filed an <a href="https://www.asx.com.au/asxpdf/20210730/pdf/44yt960pv5csx8.pdf" target="_blank" rel="noopener">announcement</a> with the ASX for an on-market buyback for A$2.5bn of its shares, which is about 3% of current market cap, as part of its effort to move its Common Equity Tier 1 ratio to 10.75-11.25%. </p><p>Under Corporations Act 2001, a company has to announce an on-market buyback to ASIC 14 days before starting. The buyback is expected to start in mid-late August and go through a period as long as end July 2022. That ASIC <a href="https://www.asx.com.au/asxpdf/20210730/pdf/44ytb9zm9cfdpn.pdf" target="_blank" rel="noopener">lodgment</a> was made Friday too. Because it is an on-market buy back under the limits of the 10/12 rule (&gt;10% of shares to be bought back in &lt;12 months), no further details are required to be given out.</p><blockquote>
<p>The timing and actual number of shares purchased under the buy-back will depend on market conditions, the prevailing share price and other considerations....</p>
<p>In addition to the on-market buy-back announced today, NAB intends to purchase shares on-market to satisfy Dividend Reinvestment Plan requirements over the buy-back period...</p>
<p>The exact nature, amount, and timing of any further capital returns beyond the $2.5 billion on-market buy-back announced today, will be dependent on market conditions and capital outlook.</p>
</blockquote><p>Despite the still strict-sounding guidance from APRA, the organisation conducted stress tests and released results last December saying even in "severe downside scenario" where growth dropped 15% and unemployment rose 13% and house prices fell 30%, the major banks would all pass the minimum capital requirement with room to spare.</p><p>The fact that these two banks have announced buybacks indicates APRA is comfortable with where banks stand, suggesting that the even more capitaltastic Westpac and CBA are likely to announce buybacks next month with earnings. </p>

The SHORT &amp; SWEET
Australian banks are seeing or are going to see sharp hikes in H1 dividends this year despite APRA guidance to be prudent with capital decisions. 
APRA changed its guidance on 29 July. 
ANZ had announced a decent-sized buyback earlier in July and NAB announced one on 30 July. 
Others are expected to announce buy-backs in August.
The Longer IntroductionIn April 2020 when markets were crashing and there was tremendous uncertainty about what ravages covid might bring to every sector of the economy, National Australia Bank (NAB AU) slashed its dividend and launched a A$3.5bn capital raise. Other companies did the same, but the other major banks avoided a capital raise in 2020 because they had either raised equity earlier (all four majors raised equity in 2015, but Westpac Banking (WBC AU) also raised in Nov 2019) or they cut or eliminated an interim dividend (ANZ and CBA cut theirs, and Westpac eliminated their div for H1 2020 entirely).For NAB, the capital raise was an institutional share placement of A$3bn and a A$500mm Share Purchase Plan (SPP) targeting individual shareholders. The SPP was well-received, priced at A$14.15/share - the same price as the placement - so when books closed a month later and the market price was 10% higher, demand had been strong enough that the SPP was boosted by A$750mm to A$1.25bn. That was probably overly cautious at the time, but it was a huge gift to shareholders. A week after the SPP shares started trading on 2 June, the shares were changing hands above A$20/share. Fast forward almost a year later to the 6 May release of H1 earnings and the bank said it had too much capital with its Common Equity Tier 1 ratio at 12.37-12.40%. It noted it intended to take action to lower that but stay above APRA's Unquestionably Strong benchmark of 10.5%. This came despite APRA's guidance in early April of 2021 that it expected deposit-taking institutions it expected they (and other financial institutions) "limit discretionary capital distributions in the months ahead, including deferrals or prudent reductions in dividends." The 7 April letter (pdf) on Capital Management said,Interestingly, Australia and New Zealand Banking Group (ANZ) (ANZ AU) announced a A$1.5bn buyback - ~2% of market cap - on 19 July and the stock bounced $1/share to A$28/share over a few days. This was obviously discussed with APRA but ANZ CEO Shayne Elliott had said on 5 May when reporting a 126% increase in H1 profit helped by writebacks, and a jump in H1 div,  that the Australian economy was booming and said, “Australia is in really good shape in where we sit today," and he quite clearly laid out the case for a buyback then.
 “We have an embarrassment of riches, if you will, in terms of excess capital.”
“Clearly the only path to get to 10.8, putting aside almost unimaginable growth in our balance sheet, would be some sort of capital management activity,”
ANZ Bank CEO Shayne Elliott (5 May 2021)
ANZ was first off the block.On 29 July, APRA updated its guidance and the new letter on capital management eliminates the strict requirement but maintains guidance on 50% dividend payout. New NAB NewsOn Friday 30 July 2021, National Australia Bank (NAB AU) filed an announcement with the ASX for an on-market buyback for A$2.5bn of its shares, which is about 3% of current market cap, as part of its effort to move its Common Equity Tier 1 ratio to 10.75-11.25%. Under Corporations Act 2001, a company has to announce an on-market buyback to ASIC 14 days before starting. The buyback is expected to start in mid-late August and go through a period as long as end July 2022. That ASIC lodgment was made Friday too. Because it is an on-market buy back under the limits of the 10/12 rule (&gt;10% of shares to be bought back in &lt;12 months), no further details are required to be given out.
The timing and actual number of shares purchased under the buy-back will depend on market conditions, the prevailing share price and other considerations....
In addition to the on-market buy-back announced today, NAB intends to purchase shares on-market to satisfy Dividend Reinvestment Plan requirements over the buy-back period...
The exact nature, amount, and timing of any further capital returns beyond the $2.5 billion on-market buy-back announced today, will be dependent on market conditions and capital outlook.
Despite the still strict-sounding guidance from APRA, the organisation conducted stress tests and released results last December saying even in "severe downside scenario" where growth dropped 15% and unemployment rose 13% and house prices fell 30%, the major banks would all pass the minimum capital requirement with room to spare.The fact that these two banks have announced buybacks indicates APRA is comfortable with where banks stand, suggesting that the even more capitaltastic Westpac and CBA are likely to announce buybacks next month with earnings. 

Aussie Bank Buyback Season Starts - Expect A$12-15bn and Funky Flows

David Blennerhassett

<div>
<p>On the 30 April, aged-care Australian listed operator <a href="https://www.smartkarma.com/entities/japara-healthcare-ltd" target="_blank" data-smartkarma-citation="entities:14760:1" rel="noopener">Japara Healthcare (JHC AU)</a> announced it had received an unsolicited, indicative, conditional, and non-binding Offer from Little Company of Mary Health Care - otherwise known as Calvary - by way of a Scheme, at A$1.04/share.</p>
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<div>
<p>On the 5 June, Calvary <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02382224-3A568448?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">increased</a> the indicative Offer price to A$1.20/share.  JHC's board concluded it was appropriate to grant Calvary due diligence access.</p>
</div>
<div>
<p>On the 15 June, the Bolton Clarke Group <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02384417-3A568803?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">made</a> a conditional, non-binding indicative proposal by way of a Scheme, at A$1.22/share. The Offer was subject to due diligence, financing, unanimous support from JHC's directors, and final approval from the Bolton Clarke board. </p>
</div>
<div>
<p>Due diligence access, consistent with that afforded to Calvary, was also provided.</p>
<p>JHC has now <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02399332-3A571403?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a> that it has entered into a Scheme Implementation Deed (SID) with Calvary, by way of a Scheme at A$1.40/share. The consideration will be reduced by any dividends paid. </p>
<p>JHC's board of directors have unanimously recommended the Scheme, in the absence of a superior proposal and subject to an independent expert concluding the Scheme is fair &amp; reasonable. </p>
<p>This looks done &amp; dusted. </p>
</div>


On the 30 April, aged-care Australian listed operator Japara Healthcare (JHC AU) announced it had received an unsolicited, indicative, conditional, and non-binding Offer from Little Company of Mary Health Care - otherwise known as Calvary - by way of a Scheme, at A$1.04/share.


On the 5 June, Calvary increased the indicative Offer price to A$1.20/share.  JHC's board concluded it was appropriate to grant Calvary due diligence access.


On the 15 June, the Bolton Clarke Group made a conditional, non-binding indicative proposal by way of a Scheme, at A$1.22/share. The Offer was subject to due diligence, financing, unanimous support from JHC's directors, and final approval from the Bolton Clarke board. 


Due diligence access, consistent with that afforded to Calvary, was also provided.
JHC has now announced that it has entered into a Scheme Implementation Deed (SID) with Calvary, by way of a Scheme at A$1.40/share. The consideration will be reduced by any dividends paid. 
JHC's board of directors have unanimously recommended the Scheme, in the absence of a superior proposal and subject to an independent expert concluding the Scheme is fair &amp; reasonable. 
This looks done &amp; dusted. 


Japara Healthcare (JHC): Calvary Takes Charge

<p>In mid-late June, the two largest Listed Investment Corporations in Australia - <a href="https://www.smartkarma.com/entities/milton-corp-ltd" target="_blank" data-smartkarma-citation="entities:29090:1" rel="noopener">Milton Corp Ltd (MLT AU)</a> and <a href="https://www.smartkarma.com/entities/washington-h-soul-pattinson-and-co-ltd" target="_blank" data-smartkarma-citation="entities:6054:1" rel="noopener">Washington H. Soul Pattinson and Co. Ltd (SOL AU)</a> - announced plans to merge, with SOL (a.k.a. "WHSP") becoming the surviving entity. </p>
<p>This was discussed by <a href="https://www.smartkarma.com/profiles/david-blennerhassett" target="_blank" data-smartkarma-citation="accounts:840" rel="noopener">David Blennerhassett</a> in <a href="https://www.smartkarma.com/insights/whsp-s-proposed-merger-with-milton-corp" target="_blank" data-smartkarma-citation="insights:53422" rel="noopener">WHSP's Proposed Merger With Milton Corp</a> and by myself in <a href="https://www.smartkarma.com/insights/milton-merger-is-a-most-marvelous-arb" target="_blank" data-smartkarma-citation="insights:53464" rel="noopener">Milton Merger Is A Most Marvelous Arb</a> and <a href="https://www.smartkarma.com/insights/milton-whsp-merger-index-implications-and-the-marvelous-arb" target="_blank" data-smartkarma-citation="insights:53551" rel="noopener">Milton-WHSP Merger Index Implications and the Marvelous Arb</a>. </p>
<p>It is a complicated deal. </p>
<p>Milton had been trading at a discount to NAV, where NAV was 97% or so listed stocks. WHSP had been trading at a premium to NAV. WHSP agreed to pay a premium to NAV for MLT shares, but the construct provided for some really interesting other optionality (some positive, a little negative) for MLT shareholders. </p>
<p>In early July, Milton announced its NAV at A$5.50/share and assuming it is exactly A$5.5000/share, the Quiddity Milton Model was off by 0.16%. When it released its top 20 stock and weights list which showed about A$50-60mm of adjustments to positions since 31 Dec 2020 within the top 20 names, that lowered the NAV miss to about 0.07% and that is probably a matter of timing and stray dividend income or a mark on its private assets.</p>
<p>Interestingly, as WHSP rose 10% then came back a bit, and Milton rose with it, but the Milton NAV did not rise much, the "spread to terms" has stayed reasonably stable except for some near-market-close shenanigans at times. </p>
<p>But it still feels like people don't get it. </p>
<p>There's some really interesting convexity here. Still.</p>
<p>And the supply/demand tilt is remarkable.</p>

In mid-late June, the two largest Listed Investment Corporations in Australia - Milton Corp Ltd (MLT AU) and Washington H. Soul Pattinson and Co. Ltd (SOL AU) - announced plans to merge, with SOL (a.k.a. "WHSP") becoming the surviving entity. 
This was discussed by David Blennerhassett in WHSP's Proposed Merger With Milton Corp and by myself in Milton Merger Is A Most Marvelous Arb and Milton-WHSP Merger Index Implications and the Marvelous Arb. 
It is a complicated deal. 
Milton had been trading at a discount to NAV, where NAV was 97% or so listed stocks. WHSP had been trading at a premium to NAV. WHSP agreed to pay a premium to NAV for MLT shares, but the construct provided for some really interesting other optionality (some positive, a little negative) for MLT shareholders. 
In early July, Milton announced its NAV at A$5.50/share and assuming it is exactly A$5.5000/share, the Quiddity Milton Model was off by 0.16%. When it released its top 20 stock and weights list which showed about A$50-60mm of adjustments to positions since 31 Dec 2020 within the top 20 names, that lowered the NAV miss to about 0.07% and that is probably a matter of timing and stray dividend income or a mark on its private assets.
Interestingly, as WHSP rose 10% then came back a bit, and Milton rose with it, but the Milton NAV did not rise much, the "spread to terms" has stayed reasonably stable except for some near-market-close shenanigans at times. 
But it still feels like people don't get it. 
There's some really interesting convexity here. Still.
And the supply/demand tilt is remarkable.

Milton's Marvelous Arb Meanders Along... Marvelously

Australian Pharmaceutical Industries / Event-Driven

<div>
<div>
<p>Back on the 14 December 2018, wholesale and retail pharmacy health/beauty and lifestyle products operator <a href="https://www.smartkarma.com/entities/19399" target="_blank" data-smartkarma-citation="entities:19399:1" rel="noopener"><strong>Australian Pharmaceutical Industries (API AU)</strong></a> (API) <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2995-02059816-3A507826?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a> that it had become a substantial shareholder in key competitor <a href="https://www.smartkarma.com/entities/15966" target="_blank" data-smartkarma-citation="entities:15966:1" rel="noopener">Sigma Healthcare Ltd (SIG AU)</a> by purchasing 137.26mm shares, or 12.95%.</p>
<p>On the same day, it was <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2995-02059834-3A507836?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">made public</a> that API had made an indicative non-binding proposal to Sigma through a Scheme of Arrangement whereby Sigma shareholders would receive 0.31 shares of API and A$0.23 in cash for each share of Sigma held. The proposal was first tabled to the board back on 11 October 2018.</p>
<p><a href="https://www.smartkarma.com/profiles/travis-lundy" target="_blank" data-smartkarma-citation="accounts:25" rel="noopener">Travis Lundy</a> discussed the Offer in <em><a href="https://skr.ma/araq7" target="_blank" rel="noopener">API Tilts at Sigma Healthcare: Expect More</a></em> and <em><a href="https://skr.ma/szfi2" target="_blank" rel="noopener">Sigma Healthcare Market Update: Strategic Review Expects More</a>, </em>concluding the Offer was light. </p>
<p>Sigma thought so too and summarily <a href="https://www.asx.com.au/asxpdf/20190313/pdf/443fhtv2whrv40.pdf" target="_blank" rel="noopener">rejected</a> the Offer on the 13 March 2019 and terminated discussions. Sigma believed its future potential is on a standalone basis. Sigma also cited API's share price decline of &gt;15% since the 11 October announcement, implying a 12% decline in value for its shareholders; and also flagged the potential execution risk in regards to ACCC consent. $60mn in synergies from merging was, however, not disputed by Sigma.</p>
</div>
<p>API said it had <a href="https://www.asx.com.au/asxpdf/20190313/pdf/443ftrffbvj16w.pdf" target="_blank" rel="noopener">closed its data room </a>and was reviewing its shareholding in Sigma.</p>
<p>API subsequently sold its stake in Sigma on the <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02185851-3A531484?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">16 December 2019</a>. </p>
<h3>The New News</h3>
</div>
<p>API has now <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02394187-3A570533?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a> an indicative, non-binding Offer from <a href="https://www.smartkarma.com/entities/wesfarmers-ltd" target="_blank" data-smartkarma-citation="entities:1104:1" rel="noopener">Wesfarmers Ltd (WES AU)</a> by way of a Scheme at $1.38/share,  a 20.5% premium to last close.  </p>
<p>Separately, Wesfarmers has entered into an agreement with API's largest shareholder <a href="https://www.smartkarma.com/entities/washington-h-soul-pattinson-and-co-ltd" target="_blank" data-smartkarma-citation="entities:6054:1" rel="noopener">Washington H. Soul Pattinson and Co. Ltd (SOL AU)</a> (WHSP), such that WHSP will vote its 19.3% interest in favour of Wesfarmers' proposal, in the absence of a superior Offer.</p>
<div>
<p>This looks done, and is trading accordingly. </p>
</div>
<div>
<p>More below the fold.</p>
</div>



Back on the 14 December 2018, wholesale and retail pharmacy health/beauty and lifestyle products operator Australian Pharmaceutical Industries (API AU) (API) announced that it had become a substantial shareholder in key competitor Sigma Healthcare Ltd (SIG AU) by purchasing 137.26mm shares, or 12.95%.
On the same day, it was made public that API had made an indicative non-binding proposal to Sigma through a Scheme of Arrangement whereby Sigma shareholders would receive 0.31 shares of API and A$0.23 in cash for each share of Sigma held. The proposal was first tabled to the board back on 11 October 2018.
Travis Lundy discussed the Offer in API Tilts at Sigma Healthcare: Expect More and Sigma Healthcare Market Update: Strategic Review Expects More, concluding the Offer was light. 
Sigma thought so too and summarily rejected the Offer on the 13 March 2019 and terminated discussions. Sigma believed its future potential is on a standalone basis. Sigma also cited API's share price decline of &gt;15% since the 11 October announcement, implying a 12% decline in value for its shareholders; and also flagged the potential execution risk in regards to ACCC consent. $60mn in synergies from merging was, however, not disputed by Sigma.

API said it had closed its data room and was reviewing its shareholding in Sigma.
API subsequently sold its stake in Sigma on the 16 December 2019. 
The New News

API has now announced an indicative, non-binding Offer from Wesfarmers Ltd (WES AU) by way of a Scheme at $1.38/share,  a 20.5% premium to last close.  
Separately, Wesfarmers has entered into an agreement with API's largest shareholder Washington H. Soul Pattinson and Co. Ltd (SOL AU) (WHSP), such that WHSP will vote its 19.3% interest in favour of Wesfarmers' proposal, in the absence of a superior Offer.

This looks done, and is trading accordingly. 


More below the fold.


API AU: The Hunter Turns The Hunted As Wesfarmers Makes A Move

<p>Despite a very large move in <a href="https://www.smartkarma.com/entities/washington-h-soul-pattinson-and-co-ltd" target="_blank" data-smartkarma-citation="entities:6054:1" rel="noopener">Washington H. Soul Pattinson and Co. (SOL AU)</a> ("WHSP") on Wednesday 23 June as people started to figure out the index implications on WHSP, the arb and the <a href="https://www.smartkarma.com/entities/milton-corp-ltd" target="_blank" data-smartkarma-citation="entities:29090:1" rel="noopener">Milton Corp Ltd (MLT AU)</a> ("MLT") leg appears under-appreciated, still. </p><p>The Marvelous Milton Arb still has much to offer. </p><p>And for those who care, it pays to build your model. </p><p>The fancy arithmetic in the Marvelous MLT Merger Model is described in <a href="https://www.smartkarma.com/insights/milton-merger-is-a-most-marvelous-arb" target="_blank" data-smartkarma-citation="insights:53464" rel="noopener">Milton Merger Is A Most Marvelous Arb</a> .</p><p>Much more below the fold. </p>

Despite a very large move in Washington H. Soul Pattinson and Co. (SOL AU) ("WHSP") on Wednesday 23 June as people started to figure out the index implications on WHSP, the arb and the Milton Corp Ltd (MLT AU) ("MLT") leg appears under-appreciated, still. The Marvelous Milton Arb still has much to offer. And for those who care, it pays to build your model. The fancy arithmetic in the Marvelous MLT Merger Model is described in Milton Merger Is A Most Marvelous Arb .Much more below the fold. 

Milton-WHSP Merger Index Implications and the Marvelous Arb

Australia

Washington H. Soul Pattinson & Company Limited is an investment holding company. The Company owns shares and properties, coal mining, bulk handling, commercial television licensee, telecommunications carrier, merchant banking, funds management, pharmaceutical retailing, manufacture, processing and marketing of biscuits and cakes.

Washington H. Soul Pattinson and Co. Ltd (SOL AU)

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Washington H. Soul Pattinson and Co. Ltd (SOL AU)

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Japara Healthcare (JHC): Calvary Takes Charge

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Milton's Marvelous Arb Meanders Along... Marvelously

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API AU: The Hunter Turns The Hunted As Wesfarmers Makes A Move

With SOL's backing, you realistically have a $1.38/share floor, with the possibility of another bidder emerging. You could position yourself around...

David Blennerhassett

Milton-WHSP Merger Index Implications and the Marvelous Arb

The proposed Milton / WHSP Merger has some marvelous math. And some funky index effects. Milton is smaller but has higher "float" so index weights...

Travis Lundy

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52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)