Australia

• Adbri (ABC AU) has entered a scheme implementation deed with CRH (CRH US) and Barro at A$3.20 per share, a 41.0% premium to the undisturbed price of A$2.27 (13 December).
• The offer requires shareholder and FIRB approval. FIRB approval for the bidder, CRH, should be forthcoming as it is a Fortune 500 company with HQ in Ireland. 
• The offer is attractive vs. peer multiples and historical ranges. At the last close and for a mid-June payment, the gross/annualised spread is 1.9%/6.6%.

• Alcoa (AA US) has made a non-binding, indicative and conditional proposal to acquire all shares in Alumina (AWC AU). Shareholders will receive 0.02854 shares of Alcoa for each Alumina share. 
• Alcoa (AA US) has entered into an agreement with Allan Gray Australia that gives them the right to acquire 19.9% of Alumina Ltd (AWC AU) at the same swap ratio.
• Alumina Ltd (AWC AU) is a potential delete from the ASX100 Index at the March rebalance and that could provide an entry into the stock.

• CSR Ltd (CSR AU) has entered a scheme implementation deed with Cie De Saint-Gobain (SGO FP) at A$9.00 per share, a 32.9% premium to the undisturbed price (20 February).
• The offer has a ticking fee of A$0.02 per month (accrued daily) if the scheme’s effective date is delayed beyond 26 June. The offer requires FIRB approval. 
• The offer is attractive and represents a 15-year high. At the last close and for a mid-June payment, the gross/annualised spread is 7.4%/28.8%.

• Alumina Ltd (AWC AU)‘s non-binding proposal from Alcoa (AA US) is 0.02854 Alcoa shares per Alumina share, implying a value of A$1.15, a 13.1% premium to the undisturbed price.
• Alcoa has been granted a 20-business day exclusivity period. The Board intends to recommend a binding proposal. Allan Gray, the largest shareholder, is supportive. 
• While strategically sensible, the offer is not a knockout bid. The headcount test is a risk as retail forums suggest a majority view forming against the offer. 

• The hunter becomes the hunted. After Superloop (SLC AU) failed to clinch Symbio Holdings (SYM AU) last year, Aussie Broadband (ABB AU) has now made an Offer for Superloop.
• ABB’s indicative Offer provides Superloop shareholders with 0.21 new ABB shares for each Superloop share held, or an indicative Offer price of A$0.95/share, a 33.2% premium to the three-month VWAP.
• ABB has picked up 19.9% in Superloop, also at A$0.95/share. Superloop has yet to respond.  

• On the 21st Feb, Saint-Gobain (SGO FP) made an indicative Offer to CSR Ltd (CSR AU) shareholders of A$9/share by way of a Scheme, a 34% premium to last close. 
• Saint-Gobain and CSR have now entered into a definitive agreement, also at $9/share. The business combination has been unanimously approved by the boards of both companies. 
• Conditions include CSR’s shareholder approval and FIRB signing off. No specific mention of ACCC. The transaction is expected to close in the second half of this year.

• The ASX 200 INDEX closed last week down, and this week is barely up, it has been flat for 3 weeks and its direction is unclear.
• The index may be preparing for a pullback, even though our models at the moment are not flashing yet the “go SHORT” signal. Covering LONG holdings may be wise.
• Wait for prices > 7670 or the end of this week, if the index closes the week up, to increase the probability of success for a SHORT Trade.

• Kinatico Ltd (ASX:KYP) is a ‘Know Your People’ regtech company providing workforce compliance monitoring and management technology and services.
• KYP has reported H1 FY24 NPAT of $0.357m, a $1.13m turnaround on the previous corresponding period (pcp), and the company’s best-ever result.
• The gross margin and EBITDA margin hit record levels of 67.7% and 13.4% respectively. The result was above our gross margin forecast but in line with our EBITDA estimate. 

• Back on the 18 December 2023, construction play Adbri (ABC AU) entered into a process and exclusivity deed with CRH (CRH US) and 42.7%-shareholder Raymond Barro (Chairman).
• Adbri has now entered into a Scheme Implementation Deed with CRH under which CRH will acquire all of the shares in Adbri that the Barro Group does not currently own.
• Conditions include Adbri’s shareholder approval and FIRB signing off. The transaction is expected to close in June of this year.

• Kinatico Ltd (ASX:KYP) is a ‘Know Your People’ regtech company providing workforce compliance monitoring and management technology and services.
• KYP has reported H1 FY24 NPAT of $0.357m, a $1.13m turnaround on the previous corresponding period (pcp), and the company’s best-ever result.
• The gross margin and EBITDA margin hit record levels of 67.7% and 13.4% respectively.

• Rent.com.au Limited (ASX:RNT) is a purpose-led company seeking to empower home renters through its technology platform and a growing number of aligned transactional services.
• The company has reported an 11% increase in H1 FY24 revenue to $1.6m with its transactional platform, RentPay delivering a 137% increase in revenue to $0.22m, driven by a 122% increase in customers and ARPU growth of 18%.
• The search portal reported a positive EBITDA of $0.092m for the half, its best result in two years and up 42% on the previous corresponding period (pcp), while RentPay posted a loss of $1.029m, flat on the pcp, and a 26% improvement on H2 FY23. 

• Right on the heels of acquiring Symbio Holdings (SYM AU), Aussie Broadband (ABB AU) has made a non-binding indicative offer to take Superloop (SLC AU) private.
• Superloop (SLC AU) had initiated the proposal to take Symbio Holdings (SYM AU) private before Aussie Broadband (ABB AU) swooped in. Now ABB has SLC in its sights.
• The offer is a small premium and Aussie Broadband Pty Ltd (ABB AU)‘s 33.2% premium claim is disingenuous at best. Expect pushback from the Superloop Ltd (SLC AU) Board.

• Pittsburgh-Based Alcoa (AA US) is offering 0.02854 of its own shares for each Alumina Ltd (AWC AU) share, a 13% premium to last close. Alumina recommends the Offer to shareholders.
• Alumina owns a 40% stake in Alcoa World Alumina & Chemicals, a JV with Alcoa that operates bauxite mining, alumina refining, and aluminium smelting operations. Alcoa owns the remaining 60%.
• Separately, Alcoa announced it has entered into an agreement with Allan Gray Australia that gives it the right to acquire up to 19.9% of Alumina. CITIC also holds 18.9%.

• Human services company Millennium Services Group Ltd (ASX:MIL) has released its H1 FY24 interim result, with both revenue (pre-disclosed) and EBITDA in line with RaaS estimates.
• Adjusted H1 FY24 EBITDA increased ~100% on the back of 15% revenue growth, a 20bps increase in gross margin and a well-controlled cost base.
• Management has reiterated both revenue and EBITDA guidance for FY24 which are reflected in current RaaS estimates.

• Human services company Millennium Services Group Ltd (ASX:MIL) has released its H1 FY24 interim result, with both revenue (pre-disclosed) and EBITDA in line with RaaS estimates.
• Adjusted H1 FY24 EBITDA increased ~100% on the back of 15% revenue growth, a 20bps increase in gross margin and a well-controlled cost base.
• Management has reiterated both revenue and EBITDA guidance for FY24 which are reflected in current RaaS estimates. 

• The A2B Australia (A2B AU) IE considers Comfortdelgro Corp (CD SP)’s A$1.45 offer fair and reasonable as it above the midpoint of its A$1.30-1.54 per share valuation range. 
• The scheme is conditional on ACCC approval, which should be forthcoming as ComfortDelGro is not a significant player in Australia.
• Several substantial shareholders have sold or exited, lowering the scheme vote risk. At the last close and for the 11 April payment, the gross/annualised spread was 2.5%/22.3%.

• A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
• ECM developments: Toei Animation (4816 JP)‘s US$550 Million secondary offering and Trial Holdings (5882 JP) IPO.
• Event-Driven developments: Azure Minerals (AZS AU), Boral Ltd (BLD AU), CSR Ltd (CSR AU),  China Traditional Chinese Medicine (570 HK), Outsourcing Inc (2427 JP), Snow Peak Inc (7816 JP). 

• Cie De Saint-Gobain (SGO FP) is offering CSR (CSR AU) shareholders A$9/share by way of a Scheme, a 34% premium to last close. That’s a knockout price.
• The Offer is indicative. Confirmatory due diligence is ongoing. CSR board has, not surprisingly “unanimously resolved to pursue the offer at an agreed price of A$9.00“. 
• A firm offer would be subject to FIRB and shareholder approval. Neither should pose an issue. Assuming a firm Offer is shortly forthcoming, this could be wrapped up late-July

• With 1H24 results, Qantas followed Singapore Airlines in highlighting fare weakness in international markets and we cut our pre-tax income by 13% to FY24.
• We expect FY24 pre-tax income to fall 16% yoy but also expect FY25 to fall another 5%, as our EBITDAR/ASK remains 10% above FY19 levels following 12% in 2H24.
• While international markets continue to normalise, Qantas’s domestic market structure positions it favourably to continue to invest in customer service and product.

• The AFR reports that JPMorgan is selling 14.5% of Azure Minerals (AZS AU) shares at A$3.42. The primary seller is said to be Mineral Resources (MIN AU), seeking to exit.
• MinRes’ decision to sell out a discount rather than accept the scheme A$3.70 offer reflects the cost of securing a say on Andover and the opportunity cost of capital. 
• The transaction booklet will be despatched in early March. At the last close and for an early May scheme payment, the gross/annualised spread is 2.5%/13.4%. 

• JPMorgan is placing MinRes (MIN AU)‘s 14.5% stake in Azure Minerals (AZS AU) at A$3.42/share, a 5% discount to last close and a 7.6% discount to the A$3.70/share Scheme price. 
• It was reported last month that MinRes, who paid up to ~A$4.00/share for some of its stake, was looking to exit. But cash now vs. ~8% more in two months?
• Given the recent rout in lithium and nickel prices, one wonders if a MAC landmine lurks. Or, quite simply, MinRes just needs the cash. Expect Azure to fall tomorrow.

• Cie De Saint-Gobain (SGO FP) has approached CSR Ltd (CSR AU) with a non-binding indicative offer to acquire all of CSR’s shares at A$9/share via a scheme of arrangement.
• At the last close of CSR (pre-trading halt) the gross spread to the offer price is 13.21%. That will close significantly once the stock resumes trading.
• Given the large premium to the last close, at a price higher than the highest high, and support from the CSR Board, the deal should go through.

• Mineral Resources (MIN AU) is looking to raise up to A$229m (US$150m) via a secondary block trade in Azure Minerals (AZS AU), which will be a clean-up. 
• The deal is a large one to digest, at approximately 51.6 days of three month ADV and 13.8% of current mcap. 
• In this note, we’ll run the deal through our ECM framework and comment on deal dynamics.

• In response to media speculation, Cie De Saint-Gobain (SGO FP) confirmed a non-binding proposal for CSR Ltd (CSR AU) at A$9.00, a 32.9% premium to the undisturbed price.
• Saint-Gobain is conducting confirmatory due diligence. CSR is at a trading halt concerning receiving a proposal regarding a potential material transaction involving CSR.
• Shareholders should be supportive as the offer represents a 15-year high. The timing of a binding agreement is the key risk.  

• QANTM Intellectual Property Ltd (ASX:QIP) owns a group of intellectual property (IP) services businesses operating under the independent brands of Davies Collison Cave (DCC), FPA Patent Attorneys and Sortify.tm.
• It is a major player in the mature and regulated Australian patent, trade marks and IP legal services market with ~14.4% market share (H1 FY24) in its key patents segment (67% of service revenue) and a diversified mix of local and foreign clients.
• The company has reported a significantly better-than- forecast H1 FY24 result, driven by stronger revenue, productivity gains and cost improvements. 

Vection Technologies secured multiple contracts in February, generating total contract value (TCV) of A$5.8m, with management expecting to recognise the associated revenue and cash across H224. Year to date, the group has delivered more than A$22.5m in TCV, c 80% of FY23 TCV, underpinning growth momentum in FY24. The most substantial contract, valued at A$4.9m, was won with an existing customer in the defence sector, Vection’s second-largest vertical, showing that management is delivering on its upsell strategy. The other contracts spanned healthcare, retail and real estate, reflecting growing demand for extended/virtual reality technologies across a myriad of commercial applications.

• QANTM Intellectual Property Ltd (ASX:QIP) owns a group of intellectual property (IP) services businesses operating under the independent brands of Davies Collison Cave (DCC), FPA Patent Attorneys and Sortify.tm.
• It is a major player in the mature and regulated Australian patent, trade marks and IP legal services market with ~14.4% market share (H1 FY24) in its key patents segment (67% of service revenue) and a diversified mix of local and foreign clients.
• The company has reported a significantly better-than-forecast H1 FY24 result, driven by stronger revenue, productivity gains and cost improvements.

• Orica Ltd (ORI AU) is looking to raise up to A$400m (US$260m) in its primary placement. The proceeds will be used to partially fund the acquisition of Cyanco. 
• The deal is a large one to digest, representing 21.3 days of three month ADV and 5.2% dilution. 
• In this note, we’ll run the deal through our ECM framework and comment on deal dynamics.

Recce Pharmaceuticals has announced several positive developments in recent weeks relating to its therapeutic programmes, particularly for lead anti-infective candidate RECCE® 327 (R327). It entered a strategic collaboration with an Indonesian biomedical company, PT Etana Biotechnologies (Etana), which may support the engagement of relatively lower-cost clinical trial sites with potentially deep patient pools in South-East Asia (SEA). The company also recently disclosed positive efficacy results among five patients treated in its Phase I/II study of topical R327 in patients with diabetic foot infections (DFI), and it now plans to expand this programme to additional domestic and global sites. We have raised our valuation to reflect the rolling forward of our estimates and reductions in our R&D and SG&A cost projections, following the most recent quarterly cash flow update. We now obtain a risk-adjusted net present value (rNPV) of A$652.6m (or A$3.20/share), versus A$551.1m previously.

• After Boral (BLD AU) rejected Seven Group (SVW AU)‘s $6.50/share Offer in 9 June 2021, Seven bumped to $7.30 cash if they got to 29.5%, and $7.40 if 34.5%.
• Seven reached 29.5% by July 1, 34.5% less than a week later, then 52.65% on the 15 July, and at the close of the Offer (29 July 2021), held 69.6%.  
• Seven, now holding 71.6%, has made a cash/scrip Offer for shares not owned, with certain tendering thresholds triggering more cash. Terms are best & final.

• Employment and disability services play APM Human Services (APM AU) has rejected PE-outfit CVC Asia Pacific’s proposal, which valued APM at less than half of its November 2021 IPO price.
• APM confirmed it had received – on Friday, 16 February – a conditional and non-binding A$1.60/share indicative proposal. That’s a 93% premium to undisturbed. Yet, APM’s IPO Price was A$3.55/share.
• CVC – and other suitors – need to persuade executive chair and founder Megan Wynne and US private equity group Madison Dearborn, who collectively control ~65% of the company.

• Seven Group Holdings (SVW AU) has launched a takeover offer for Boral Ltd (BLD AU). The minimum consideration is A$6.05 (A$1.50 cash and 0.1116 SVW shares per BLD share).
• Based on SVW reaching certain voting thresholds, the offer could be increased by an additional A$0.20 cash per share, implying a maximum consideration of A$6.25 per share.
• While the low offer premium could deter acceptances, SVW aims to spur acceptances by warning it will delist BLD and not pay dividends for the foreseeable future. 

• Seven Group Holdings (SVW AU) holds 71.59% in Boral Ltd (BLD AU) and is looking to acquire the remaining shares at A$6.05/share via a mix of SVW stock and cash.
• The offer consideration ratchets higher to A$6.15/share if SVW’s aggregate shareholding reaches 80% and to A$6.25/share if SVW’s aggregate shareholding reaches 90.6%.
• Seven Group Holdings (SVW AU) is an addition to a global index at the end of the month and a drop in the stock post inclusion will affect Boral Ltd.

• Bell Financial Group Ltd (ASX:BFG) is a diversified provider of financial products and software solutions within, and increasingly outside, its traditional full-service stockbroking business.
• BFG reported FY23 NPAT of $24.3m, 5% below FY22 and 10% below RaaS estimates.
• A H2 FY23 miss in Technology & Platforms (down 8% against a H1 result +100%) was the major difference to RaaS estimates, with all other divisions trading in-line with generally challenging but improving trading conditions. 

• Bell Financial Group Ltd (ASX:BFG) is a diversified provider of financial products and software solutions within, and increasingly outside, its traditional full-service stockbroking business.
• BFG reported FY23 NPAT of $24.3m, 5% below FY22 and 10% below RaaS estimates.
• A H2 FY23 miss in Technology & Platforms (down 8% against a H1 result +100%) was the major difference to RaaS estimates, with all other divisions trading in-line with generally challenging but improving trading conditions.

• Globe Metals & Mining Ltd (ASX:GBE) is a Perth-based, Africa-focused resources company developing the Kanyika niobium project in Malawi, east Africa.
• GBE has been undertaking exploration and resource development activities at Kanyika since identifying niobium and tantalum mineralisation at the site back in 2007, and is now poised to bring the first niobium mine into production in more than 50 years and the first ever for Africa.
• The Kanyika niobium project has a mineral resource of 68Mt at 0.283% niobium based on approximately 33km of drilling. 

• I tally 53 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
• Four new deals discussed this week on Smartkarma: Altium Ltd (ALU AU), Ansarada Group Ltd (AND AU), Roland DG Corp (6789 JP), and Welbe Inc (6556 JP).
• Key updates took place on JSR Corp (4185 JP) and Outsourcing Inc (2427 JP)