Australia

• Arcadia’s share price soared by 47% following news of potential deal with Rio Tinto
• Rio Tinto confirmed talks with Arcadia for a deal worth $4-6 billion, causing speculation and excitement in the market
• Arcadia, with ten operating sites and diverse lithium operations, is a key player in the lithium industry with significant growth potential.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• Rio Tinto Ltd (RIO AU) has confirmed it has approached Arcadium Lithium (LTM AU)/(ALTM US) regarding a potential acquisition. 
• No Offer Price has been announced; however a proposed bid with a 30%+ premium, on top of last week’s 11% bounce, has been rumoured. That implies a price of ~$6/share.
• Given shares were trading ~A$10/share in January this year, one Aussie-based fund reckons such an Offer would be highly opportunistic; and that a bid 2.5-3x higher is reasonable. 

• In response to media reports, Arcadium Lithium (LTM AU) confirmed receiving a non-binding proposal from Rio Tinto Ltd (RIO AU). No terms were disclosed.
• According to press reports, Rio aims to acquire Arcadium at a valuation range of US$4-6 billion (A$5.9-8.8 billion). Blackwattle thinks a fair price is closer to US$8 billion. 
• The rumoured valuation range is unattractive and arguably a bear case valuation assuming no significant recovery in lithium prices.  

• RaaS has published an update report on consumer finance group Cash Converters International (ASX:CCV) following the release of its FY24 results which saw 26% growth in revenue on the pcp and EBITDA growth of 21% in line with our forecasts.
• The gross loan book grew 6% to $288m, which we find impressive as the business transitions away from SACC products due to regulatory change.
• This was more than offset by growth in other products, domestically and internationally.

• RaaS Research Group has published an update on ethically-motivated, diversified financials group Pioneer Credit (ASX:PNC) following the company’s announced new $272.5m four-year syndicated senior finance facility.
• Our base case valuation has increased to $250m (previously $217m) or $1.94/share due to lower finance costs in FY26 (down $8m to c.
• $20m) and ongoing.

• From time to time, RaaS Research produces non-commissioned research reports on industries and companies which we believe deserve attention.
• Josh Baker attended the Australian Gold Conference last week and found eight stocks he believes have clear catalysts for a re-rate.None of these companies are currently covered by RaaS.

• SGX Iron Ore futures surged by $5.64/ton last week, with prices peaking at $113.55/ton on 30 Sept amid China’s expanded stimulus measures.
• Short-Term moving averages signal a bullish trend, with the 9-day MA crossing the 100-day MA on 4 Oct, indicating further upward momentum.
• Overbought conditions, with RSI nearing 70, suggest caution, and a tight stop loss remains advisable as support at $105/ton remains weak.

• RaaS Research Group interviewed Ricegrowers Ltd (trading as SunRice) Group Chief Financial Officer Dimitri Courtelis post the company’s FY24 results.

• Wrkr presented at a RaaS-focused Coffee Microcaps Webinar on 2 August 2024

• RaaS Research Group has published a flash comment on environmental services company Fluence Corporation (ASX:FLC) following its announcement yesterday that it had secured a US$7.1m contract to provide a Sea Water Reverse Osmosis project for Stereau on Mayotte, a French archipelago in the Indian Ocean.
• This material project for the Municipal division (MWW) is complemented by a US$1.5m contract win in the Industrial Wastewater & Biogas division (IWB) for a food processor in the US.
• When combined with other recent successful tenders the new orders secured in the first 6 weeks of the current quarter total ~US$12m.

• RaaS has published an update on vehicle subscription business Carly Holdings (ASX:CL8) following the release of its FY24 results which saw a 71% year-on-year increase in revenue to $3.6m, a 40% increase in gross profit to $1.15m and 22% increase in EBITDA loss to $3.57m.
• Carly’s FY24 accounts underline the company’s success in growing fleet and subscriptions but highlights the drag which deploying vehicles as they are acquired necessarily has on the cost base.
• Revenue was again up strongly but so were fleet-related costs, albeit at only slightly over half as much.

• A slew of policies announced by the Chinese government led to a short squeeze in the iron ore market, with prices moving up 20% from the lows to 108 USD/ton.
• Mill margins inflected into positive territory, and iron ore, after gapping below its band of 95-130 USD/ton for the last 3.5 years, is now back in its normalized range. 
• While the current move was unexpected, we expect the euphoria to last a while as more clarity on the stimulus emerges and ore prices tick up short-term.

• Sigma Healthcare (SIG AU) has offered a court-enforceable undertaking to alleviate preliminary anti-competition concerns raised by ACCC in relation to its proposed merger with CWG.
• Sigma will let its franchisees who entered their franchising arrangements prior to January 1, 2024 to terminate their franchise agreements with Sigma without any penalty, for the next three years.
• The company will also limit the usage of confidential information from its wholesale customers and franchisees for the next three years. Final decision of ACCC is expected on November 7.

• An $271 million block trade of Pilbara minerals occurred, representing nearly 3% interest in the stock of the lithium miner
• The trade was part of a secondary share sale stemming from an equity collar transaction for China’s Ganfeng, which owns 5.7% of Pilbara
• Equity collars are a trading strategy using options to protect downside, with the block trade price at a 4% discount to the last close

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• Discounts to NAV of covered holdcos mainly widened during September. Discounts to NAV: C.F.Alba, 46.6% (vs. 46.2% as of August 30); GBL, 40.7% (vs. 41.1%);
• Heineken Holding, 14.9% (vs. 16.5%); Industrivärden C, 0.9% (vs. 1.7%); Investor B, 2.6% (vs. 1.9%); Porsche Automobile Holding, 35% (vs. 35.7%). Rio DLC spread widened to 26% (vs. 19.8%).
• What seems interesting (unchanged views): Porsche SE vs. listed assets and the Rio DLC (long RIO LN/short RIO AU).

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Nickel Industries
• Tata Motors ADR

• A$0.77/Share. That’s Louis Dreyfus Company (LDC)’s revised unconditional bid. Plus it now holds 47.66% after Samuel Terry Asset Management, Namoi’s largest shareholder, tendered into the revised term.
• Expect Namoi Cotton Co Operative (NAM AU)‘s board to shortly back LDC’s Offer. LDC’s Offer is $0.02/share above Olam Agri’s conditional bid.
• After LDC first approached Namoi in November last year, this is now done. Expect Olam to tender its stake, and fold its tent. 

• Following on from my decision to pass on Euroz another company I looked further into was COG Financial Services.
• Unitholders may be well familiar with this already as the second bidder for Diverger, and substantial shareholder of Centrepoint Alliance (Given I invested in both this says something about their capital allocation).
• COG is another financial services business operating predominately in the space of asset finance brokering and lending. 

• SGX Iron Ore futures surged by $10.24/ton to $102.09/ton last week, hitting the highest level since July, driven by China’s stimulus announcement.
• A bullish technical signal emerged as the 9-day moving average crossed over the 21-day, yet RSI overbought levels (72.35) suggest a potential correction.
• Trading volume spiked mid-week but thinned near $105/ton, indicating waning volume above $100/ton and setting up volatility for a short-term price drop.

• Welchau is now interpreted as a light oil rather than a gas condensate discovery based on detailed analysis of samples recovered from the well and other well data.
• While this means that the energy equivalent hydrocarbon volumes may be smaller than the original pre-drill estimates, onshore oil can be more valuable than gas to a small company due to the ability to produce and progressively develop a field without having to first prove up sufficient reserves to underwrite a pipeline and secure a gas contract.
• Welchau is estimated to hold 90-95% oil and the production from Welchau-1 could be trucked to a point of sale or to ADX’s existing 3,000 bbl/d Anshof facility for processing when stable flows can be established.

• MA Financial (13.43% of shares out) and Alison Hughes (9.94%) said they will reject Genesis A$1.8675/share offer for Pacific Smiles (PSQ AU); therefore the 90% acceptance condition cannot be met.
• Separately, PSQ’s board also rejected terms, as Genesis Offer is below NDC’s A$2.05/share Offer; plus terms are “opportunistic” as they do not account for PSQ’s recent strong financial improvement. 
• What now? Genesis has the flexibility to bump. Expect that to occur. They won’t fold their tent in response to this latest development.

• RaaS has published an update report on agri-FMCG group Ricegrowers, trading as SunRice (ASX:SGLLV), updating our Sum of The Parts (SoTP) valuation as we move from FY24 estimates/consensus data to FY25.
• In moving our consensus valuation year from FY24 to FY25, we look back on selected RaaS peer EPS growth trends over the past four years (FY23a-FY26f inclusive).
• Only four stocks including SGLLV [the others (ASX:TWE), (ASX:RIC) and (SB:EBRO)] have not or are not forecast to have a down year during this period.

• In this insight, we take a look at the potential index changes for ASX200, 100, 50, and 20 in the run-up to the December 2024 index rebal event.
• We currently do not see any index changes for ASX 20 and ASX 100.
• We see one change for ASX 100 and two changes for ASX 200 but the final result could depend on relative share price movements for the next two months.