Australia

• The ACCC has decided not to authorize the ANZ takeover of Suncorp-Metway Bank
• Can be positive for ANZ without executive risk, integration costs, unknown new risks
• Differentiator ANZ to peers its islessor exposure to Australia, and better credit metrics

• Back in 2018, mini-exploration mining play – rare earths, gold, and base metals –  Indiana Resources (IDA AU) had its Tanzanian retention licence revoked. With no compensation.
• Indiana pursued its claim through the World Bank-backed ICSID’s tribunal, which subsequently ordered the Tanzanian government to pay US$109.5mn in damages and costs, versus Indiana’s current market cap of US$21mn.
• Not surprisingly, the Tanzanian government is pushing back on the claim. The question is whether Indiana will ever get paid. And Indiana’s not the only company seeking revocation retribution.

• Wrkr Ltd (ASX:WRK) offers compliance solutions for Australian superannuation contributions and payroll including member onboarding, clearing, messaging and employee validation.
• The group is building a strong moat with key products compliant with key government regulations while harnessing key customer relationships across super funds, payroll providers and corporates.
• A Q4 FY23 trading update has delivered revenue above RaaS estimates (+43% to $6.6m vs RaaS $6.1m) primarily due to first revenue from Link Group (ASX:LNK) around the planning and discovery of client migration to Wrkr PAY. 

• Broadband provider Superloop Ltd (SLC AU)  has made an indicative Offer, by way of a Scheme, for cloud communication software outfit Symbio Holdings (SYM AU).
• Under the proposal, Symbio shareholders would receive A$1.425 (cash) and 2.14 new Superloop shares for each Symbio share held, for an implied price of A$2.85/share, a 20% premium to undisturbed.
• A four-week period of reciprocal exclusivity has been agreed to further progress the proposal.

• Symbio Holdings (SYM AU) has disclosed a non-binding indicative proposal from Superloop Ltd (SLC AU) at A$1.425 cash per share and 2.14 SLC shares per SYM share. 
• The implied offer price of A$2.85 per share is a 19.7% premium to the undisturbed price of A$2.38 per share. A 4-week reciprocal exclusivity period starts on 1 August.
• The offer is not close to being a knockout bid. Superloop states that it will progress the transaction on “a disciplined basis“, suggesting some risk towards a binding proposal.

• Discounts to NAV of covered holdcos have generally widened during July. Discounts to NAV: C.F.Alba, 47.5%; GBL, 39.1%; Heineken Holding, 16.4%; Industrivärden C, 6.6%; Investor B, 15%; Porsche Automobile Holding, 43.8%.
• The spread of Rio Tinto DLC tightened to 19%. Rio Tinto is a candidate for an Australian top hat structure.
• Interesting situations: Heineken Holding/Heineken, Porsche SE/vs. listed assets and Rio DLC.

Paradigm has shared its June 2023 quarterly update. In Q423, net cash outflow from operating activities was A$17.1m (up from A$10.3m in Q323) or A$45.2m for FY23. R&D costs were A$16.1m (versus A$9.0m in Q3) or A$47.0m for FY23, and were attributed to recruitment initiatives and new site identification for the PARA_OA_002 trial, analytical activities for the PARA_OA_008 trial as well as the canine model studies of naturally occurring osteoarthritis (OA), and clinical activities assessing iPPS for mucopolysaccharidosis (MPS) types I and VI. The full year figures were partially offset by a A$7.4m R&D tax incentive rebate (reported in Q223). Paradigm reported a cash balance of A$56.4m at end-June 2023 (versus A$73.2m at end-March 2023). Assuming the cash burn rate remains at the FY23 level of A$45m, the company should have sufficient funds to bring it through near-term key inflection points, as described below.

• Rio Tinto reported a decent quarter, with consecutive operational improvements and the successful start of underground production at Oyu Tolgoi.
• Commodity prices and the energy transition influenced financial performance, with a strategic focus on strengthening their aluminum business and expecting significant returns from Oyu Tolgoi.
• Rio Tinto also recently expanded scandium production with the acquisition of the Platina Scandium Project.

• Abacus Property (ABP AU) de-stapled Abacus Storage King (ASK AU), its self-storage business. 
• Offering 1 ASK share for every 5.6 ABP share, the REIT raised A$225m (US$150m) after the deal was priced at the bottom end of the indicative price band at A$1.41/share.
• The deal is effectively an IPO, and after having been in the making for some time now, it is well flagged as well.

• For the month of July 2023, 6 new deals (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$2.2bn.
• The average premium for the new deals announced (or first discussed) in July was 40%. The average YTD is 36%.
• This compares to the average premium for all deals in 2022 (106 deals), 2021 (165 deals), 2020 (158 deals), and 2019 (145 deals) of 41%, 33%, 31%, and 31% respectively.

• The S&P/ASX 200 INDEX  has been stuck in the 7000-7400 range for 16 weeks until last week when it briefly pierced the upper range (but closed the week at 7403).
• This WEEKLY trend pattern can lead to a multi-week rally when it rises for => + 3 weeks in a row (it’s a pattern that can include momentum trades).
• The index is at a make-it-or-break-it junction: either it starts to trend higher towards the previous peak (7567, January 2023), or it will pullback into the 7000-7400 range.

• Amaero International Ltd (ASX:3DA) is a global specialist in titanium and specialty alloy powder production and advanced manufacturing for the defence, aerospace, and other industrial sectors.
• The company has reported Q4 operating cash outflow of $0.855m, well down on that reported in the previous three quarters of FY24 and the lowest quarterly cash outflow since Q4 FY20.
• The result was driven by a tight rein on cash operating costs and $1.32m in government grants and tax incentives which offset $0.026m in restructuring costs and the cost of Project Falcon in the United Arab Emirates. 

• Just a few weeks ago, Oklo, a startup focused on advanced nuclear fission micro-reactor technology, made a significant splash with the announcement of its intention to go public through a SPAC backed by entrepreneur Sam Altman.
• Altman, the founder of OpenAI, has become a high-profile figure in the tech industry, with ambitions stretching beyond terrestrial concerns and reaching the very potential of global artificial intelligence. 
• To realize this bold vision, Altman asserts that the world requires an exponential increase in our energy production—a demand he anticipates being fulfilled by the nuclear sector.

• Millennium Services Group Ltd (ASX:MIL) has provided an update on Q4 FY23 revenue, cash flow from operating activities, and the H2 FY23 gross margin. MIL delivered 8.0% (RaaS 9.6%) revenue growth in Q4 FY23 and 2.0% over FY23 on the back of new contract wins and wage inflation. Q4 FY23 cash flow turned positive with the group ending FY23 with just $1.2m net debt.
• The H2 FY23 GP% came in below implied guidance and RaaS estimates at 14.4% against ~15.9% forecast, attributed to wage pressure in a tight labour market.
• While most contracts have an annual contract adjustment clause for wage increases, the timing and magnitude of recent award increases is proving difficult to manage. 

• Pointerra Ltd (ASX:3DP) provides a powerful cloud-based solution (Pointerra3D) for managing, visualising, analysing, using, and sharing massive 3D point clouds and datasets.
• Pointerra3D is a proprietary digital twin SaaS platform which delivers predictive digital insights and definitive answers to complex physical asset management questions.
• The Pointerra3D suite of solutions spans target sectors including survey and mapping; architecture, engineering and construction (AEC); utilities; transport; resources and defence and intelligence. Pointerra has announced that it, together with its US engineer, procure and construct (EPC) partners, have been chosen by existing customer US energy giant Entergy (NYSE:ETR) for its 10- year, US$15b grid resilience CAPEX programme. 

• Yesterday (26 July), asset manager Pacific Current (PAC AU)  announced a cash/scrip NBIO from Regal Partners (RPL AU).
• Under Regal’s proposal, Pacific Current shareholders would receive an implied $10.77/share. Pacific Current considers the current share price doesn’t reflect the underlying value of its portfolio and business.
• Now GQG Partners (GQG AU) has announced it intends to submit its own NBIO. No price was mentioned.

• Pacific Current (PAC AU) has disclosed a non-binding indicative proposal from Regal Partners (RPL AU) at A$7.50 cash per share and 2.2 GQG Partners (GQG AU) shares per PAC share.
• The implied offer price of A$11.12 per share based on GQG’s last close price is a juicy 42.6% premium to the undisturbed price of A$7.80 per share (26 July).
• The offer is attractive compared to historical ranges and peer multiples. Expect the Board to grant due diligence access to facilitate a binding proposal.

SenSen’s Q423 update shows robust quarter-on-quarter growth in cash receipts, broadly aligning with our full year revenue forecast. Lead indicators for FY24 are positive, highlighted by the recent signing of a A$1.4m three-year contract with a new Asian casino customer, as well as a strong contract pipeline. SenSen also launched several new solution variants in Q4, which could lead to high-margin upsell opportunities. The group has identified cost-cutting measures for H124, with the aim of becoming cash flow positive for the full year, which we have reflected in our updated forecasts.

• O&G junior Talon Energy (TPD AU) announced it had received a non-binding Offer from Strike Energy (STX AU). 
• The all-scrip bid – by way of a Scheme – entailed an implied A$0.20/share in Strike shares plus Talon shareholders retaining their holding in Talon’s Mongolia gas project.
• After Talon said it intended to undertake a process of evaluation of the Proposal before offering due diligence, Strike promptly withdrew its bid.