Australia

• Plastic products manufacturer Pact Group Holdings (PGH AU) has announced an unconditional off-market takeover from its major shareholder, Raphael Geminder.
• Geminder, with a current stake of 50%, is offering – via wholly-owned entity Kin Group – A$0.68/share, a paltry 0.07% premium to last close. Shares recently touched an all-time low.
• The Offer is (should be) open for a month. As the bid is unconditional, there’s nothing to stop Geminder from buying shares higher, then simply lifting his Offer price. 

SenSen’s FY23 preliminary results show robust revenue growth, albeit missing our forecasts slightly. Losses narrowed year-on-year from efficiency initiatives. The strategic shift towards more predictable opex and cloud contracts continues to improve the revenue mix. Margin expansion is expected in FY24 following efficiency measures, with potential for cash flow positivity. Valuation remains at a discount to peers despite SenSen being one of the few with a positive FY24 EBITDA forecast.

EML Payments reported FY23 revenue and underlying EBITDA ahead of the top-end of its guidance range, benefiting from higher interest income and improvements to customer contracts in H223. The company is making good progress with its short-term priorities, and while the Barrenjoey strategic review is ongoing, management has started taking action to return loss-making activities to profitability and to reinvigorate growth in its core businesses. We have upgraded our forecasts to reflect better-than-expected performance in FY23 and identified cost savings.

• Pact Group Holdings (PGH AU) has disclosed an unconditional takeover proposal from Raphael Geminder at A$0.68 per share, a 0.7% premium to the undisturbed price (12 September).
• Mr. Geminder’s justification for a little-to-no premium offer is based on the premise that minorities are clambering for a liquidity event to exit a no-hope situation. 
• The offer price is unattractive on any reasonable metric. A successful privatisation would require a bump. The shares closed 6.6% higher than the offer. 

Respiri had a very active FY23, including the recent close of the Access Managed Services (Access) acquisition and the signing of several commercial contracts. These represent stepping stones to the company’s commercialisation phase, further supported by a strong client pipeline of ongoing contractual discussions, including with two US-based insurers and three accountable care organisations. As a result, management expects to break even by H2 CY24 (revised from end-CY24). Pro forma cash at 30 June 2023 was A$2.2m, bolstered by the A$3.9m fund raise in August 2023, which we estimate should support operations into Q424. We have adjusted our estimates to reflect FY23 results and Respiri’s recent activities, tempered for timing considerations (client onboarding and patient enrolment). Our valuation adjusts to A$164.6m or A$0.17/share (from A$164.2m or A$0.20/share, previously).

• After Origin Energy (ORG AU) entered into a Scheme Implementation Deed with Brookfield Asset Management/MidOcean Energy in late March, the ACCC approval process has played out in the public eye.
• And it hasn’t been all beer and Skittles for the Offerors. Not just on competition issues. But also the perceived/apparent public benefit from Brookfield’s future commitment to renewable generation.  
• All the while, the ACCC recently blocked ANZ (ANZ AU)’s acquisition of Suncorp Bank, and Telstra Corp (TLS AU)/TPG Telecom (TPG AU)‘s mobile network sharing deal. 

• Viva Energy Group (VEA AU)‘s parent,  Vitol, aims to raise around US$460m via selling 15% of the company
• The news of a possible selldown was leaked overnight in the local press and hence, the stock has corrected going into the placement.
• In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

• The S&P/ASX 200 (AS51 INDEX) closed down last week (CC=-1), this week is rising again, we analyze the new, reset resistance levels to see how far it can go.
• Our previous, recent insight discussed the fact that the index has been locked in a range for 2 years, an uptrend may be unfolding but it must breach 7600.
• The current trend pattern is bearish, the index won’t rise more than 2-3 weeks, and it would probably go not very far: 7300-7400 should be the limit

• Comms Group Ltd (ASX:CCG) has received further valuation support in the form of the recent bid from Atturra Ltd (ASX:ATA) for Cirrus Networks (ASX:CNW).
• We view CNW as the closest ASX peer to CCG in terms of business mix and market cap.
• The ATA Scheme Implemented Deed values CNW at 7.4x post-AASB 16 FY23 EV/EBITDA and 8.8x pre-AASB 16. 

• Changes to the S&P/ASX indices, REMX US, GDXJ US, MVA AU, MVW AU and other indices will be implemented at the close on Friday.
• There is over +/-A$5m to trade or +/-3x ADV to trade on nearly 100 stocks and will be a huge volume day for the stocks at the close.
• Use the volume on the buy and sell side to increase/reduce positions especially on the deletes where there will be liquidity to cover shorts on stocks that have dropped significantly.

• Back on the 3 July, United Malt Group Ltd (UMG AU) and Malteries Soufflet entered into a binding agreement of A$5.00/share, by way of a Scheme. 
• The Scheme Booklet has now been lodged with ASIC. UMG shareholders vote on the transaction on the 12 October, with implementation on the 15 November.
• The Offer remains subject to FIRB and other regulatory approvals. Malteries Soufflet and UMG are the second and fourth-largest maltsters in the world.

• As expected, Abacus Group (ABG AU) will be deleted from the MVIS Australia A-REIT Index at the close on 15 September.
• Abacus Group (ABG AU) will also be deleted from the S&P/ASX 200 (AS51 INDEX) on the same day, so this increases the sell flow on the stock.
• Estimated one-way turnover at the rebalance is 3.8% resulting in a one-way trade of A$23.8m. There are a few stocks with over 1x ADV to trade from passive trackers.

• There is one add, one delete, one listing change, plus float and capping changes for the VanEck Vectors Junior Gold Miners ETF (GDXJ US) in September.
• Estimated one-way turnover is 6.1% and that results in a one-way trade of US$240m. There are 31 stocks with over 1 day of ADV to trade from passive trackers.
• There will be some same way and some opposite flows between the VanEck Vectors Junior Gold Miners ETF (GDXJ) and S&P/ASX 200 (AS51) trackers at the close on 15 September.

• There are no constituent changes for the MVIS Australia Equal Weight Index at the September rebalance. JB Hi-Fi Ltd (JBH AU) and Charter Hall (CHC AU) have avoided deletion.
• Float and capping changes will result in a one-way turnover of 3.5% and in a one-way trade of A$69m.
• There is a lot of short interest on stocks that will have passive buy/sell flows, but there will not be enough volume traded for shorts to use to reduce positions.

• Newcrest Mining (NCM AU)‘s IE considers Newmont Mining (NEM US)’s offer of 0.400 Newmont shares per Newcrest share + special dividend + FY2023 dividend to be reasonable but not fair.
• The IE valued Newcrest at US$18.64-21.13 per share vs. the transaction value of US$17.10-18.70 per share. The sharp sector de-rating, including Newmont’s shares, has impacted the scrip-heavy offer.
• The offer remains attractive compared to peer multiples, historical prices and VWAP exchange ratios. At the last close prices and for the 6 November payment, the gross/annualised spread is 1.2%/7.8%. 

• I tally 50 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
• Two new deals this week: the Tender Offer for Dic Corp (4631 JP) and the Partial Offer for Intage Holdings (4326 JP).
• Key updates took place for Newcrest Mining (NCM AU),  Liontown Resources (LTR AU), Golden Eagle Retail (3308 HK), Mason Group Holdings (273 HK), and Metro Pacific Investments Co (MPI PM).

• After being granted due diligence, Newmont (NEM US) firmed an all-scrip Offer on the 15 May for Newcrest (NCM AU) at 0.400 new Newmont shares for each Newcrest share held. 
• The Offer, by way of a Scheme, permits Newcrest to pay a special franked dividend of up to $US1.10/share on top of the Offer terms. 
• The Scheme Booklet has now been lodged with ASIC. Newcrest shareholders vote on the transaction on the 13 October. The record date for the special dividend is the 19 October.

• Agile Response to Visa Changes: NextEd’s nimble approach to the end of the COVID-19 408 visa showcases adaptability in uncertain times.
• Tech Sector Growth Potential: Expanding in the thriving tech field, NextEd taps into strong post-study work rights and sector support.
• Regulatory Challenges: Navigating regulatory shifts, NextEd’s resilience shines amid uncertainty in the non-university education landscape.

• There are a bunch of stocks that are constituents of the S&P/ASX family of indices and could go private or merge prior to the next scheduled rebalance in December.
• That will lead to ad hoc inclusions for the S&P/ASX 200 (AS51 INDEX) and could also lead to ad hoc inclusions for the S&P/ASX 50 and S&P/ASX 100 indices.
• There is a fair amount of short interest on some of the potential inclusions and short covering due to index inclusion could take the stocks higher.

• Orora Ltd (ORA AU) is looking to raise A$1,345m (~US$870m) via a primary placement and an entitlement offer to partially fund its acquisition of Saverglass.
• While the exact size/target of an acquisition wasn’t explicitly mentioned earlier, the firm had discussed its potential use of M&A to grow its North American/Europe regions. 
• Including the entitlement offer, the deal would represent 212 days of three month ADV and add 58.9% to the firm’s total shares outstanding.

• Kinatico Ltd (ASX:KYP) is a ‘Know Your People” regtech company providing workforce compliance monitoring and management technology and services.
• KYP has reported FY23 NPAT of $0.237m, an increase of 116% on the previous corresponding period (pcp), the company’s best-ever result.
• On an adjusted basis (for non-cash items), NPAT was $0.75m, a turnaround of $1.5m on the prior period while the gross margin and EBITDA margin hit record levels of 65.7% and 11.2% respectively.