Australia

• Origin Energy (ORG AU) has entered into a binding proposal with Brookfield/EIG. The offer terms are changed to A$5.78 and US$2.19 per share. The offer is worth A$8.912 excluding dividends.
• Since the announcement of the first indicative offer on 10 November 2022, the average implied value of the revised offer is A$8.97 per share vs A$9.00 for the previous offer.
• ACCC approval will be the key overhang and is expected to take around six months. At the last close, the gross spread to the offer is 9.1%.

• In the wake of the Aussie government’s gas price intervention, the Brookfield/MidOcean consortium reduced its Offer for Origin Energy (ORG AU) to ~A$8.90/share, down from A$9.00/share, on the 22 Feb. 
• At the time, Origin appeared supportive.  Origin and Brookfield/MidOcean have now entered into a Scheme Implementation Deed.
• Some subtle – and more favourable to all investors – changes have been made to terms. Pricing is attractive. ACCC is the big question mark.

• Aged care provider Estia Health (EHE AU) has appointed UBS to advise on Bain Capital’s $3.00/share non-binding proposal.
• The indicative  Offer arrives a little over two months after Kerry Stokes-backed Seven Group Holdings (SVW AU) off-loaded its 10% stake at ~ $2.00/share.
• Separately, Regal Fund announced it has taken a 7% stake.

• Liontown Resources (LTR AU) has turned down an unsolicited, conditional and non-binding offer from Albemarle Corp (ALB US) to acquire all outstanding shares at A$2.50/share.
• There is huge short interest on Liontown Resources (LTR AU) and the short covering could take the stock close to the A$2.50/share mark.
• Liontown Resources (LTR AU) is up nearly 50% today and if the price stays around this level, the stock could be added to the S&P/ASX 100 Index in September.

• United Malt Group Ltd (UMG AU) has offered exclusive due diligence to Malteries Soufflet for its non-binding indicative proposal of A$5.00 per share, a 45.3% premium to the undisturbed price.
• The offer follows on from three previous undisclosed proposals. The offer is subject to several conditions such as due diligence, Board recommendation and FIRB approval.
• The presence of several substantial shareholders necessitates an attractive premium. The offer is attractive in comparison to historical share prices and peer multiples. 

• Estia Health (EHE AU) confirmed it has received a non-binding indicative proposal from Bain Capital at A$3.00 per share, a 28.2% premium to the undisturbed price (23 March).
• The offer is attractive in comparison to historical share prices and multiples and implies a premium to Regis Healthcare (REG AU)’s (the key peer) multiples.  
• However, the offer is light in comparison to precedent transactions multiples. The largest shareholder has also suggested the terms are light, which suggests a requirement for a bump.

• On the morning of the 16 March, consumer finance play Latitude Group Holdings (LFS AU) announced what appeared to be a “sophisticated and malicious cyber-attack.” 
• Shares were voluntarily suspended on the 20 March and were reinstated yesterday (22 March). 
• Latitude reckons no compromised data has left its systems; but its review has uncovered evidence of large-scale information theft affecting customers (past and present) across Australia and New Zealand.

• National Storage REIT (NSR AU) (NSREIT) aims to raise around US$200m (A$300m) via an institutional placement.
• Past deals have ended up doing well, however, the stock now appears toppish and it’s unclear if the deal was well flagged.
• In this note, we will talk about the placement and run the deal through our ECM framework.

• Carly Holdings Limited (ASX:CL8) operates a vehicle subscription business, which it launched in March 2019.
• Car subscription allows business and retail customers to pay a single monthly fee to access a car for 30 days or more and is an alternative to purchasing or financing a vehicle.
• Carly has attracted larger automotive industry businesses as shareholders, with a model that facilitates sales volumes of new vehicles and delivers a new recurring revenue stream for automotive manufacturers and dealers.

• There could be an addition to the S&P/ASX 100 Index and S&P/ASX 200 (AS51 INDEX) in April following OZ Minerals Ltd (OZL AU)‘s acquisition by BHP Group Ltd (BHP AU).
• Then there could be another change for the S&P/ASX 200 (AS51 INDEX) at the regular rebalance in June.
• Passive trackers will need to trade between 4.5-18 days of ADV on the potential adds/ deletes. Short interest has started to increase on a couple of stocks.

• Wyloo has launched an unconditional off-market takeover bid for Mincor Resources NL (MCR AU) at A$1.40 per share, a 34.6% premium to the undisturbed price. The offer opens 5 April.
• In certain aspects the offer is attractive. The offer values Mincor at a premium to peer and precedent transaction EV/Resource and EV/Reserve multiples.
• However, the offer is at a discount to recent share prices and price targets. Rival bidders (BHP Group Ltd (BHP AU) or IGO Ltd (IGO AU)) could also emerge. 

• In this insight, we take a look at the potential index changes for ASX 200, 100, 50, and 20 in the run up to the June 2023 Rebalance.
• OZ Minerals Ltd (OZL AU) upcoming deletion in April 2023 could cause a couple of intra-review replacements.
• Separately, there could be one more change in the ASX 200 index in the June 2023 review.

• Nickel explorer Mincor Resources NL (MCR AU)‘s board urges shareholders to take no action in response to the on-market takeover from Andrew Forrest’s backed Wyloo Metals.
• Wyloo is offering A$1.40/share. The offer period commences on the 5 April and runs until the 8 May – unless extended. However, Wyloo’s broker is already standing in the market. 
• Wyloo, together with associates, control 19.87% of the voting power in Mincor. Currently trading 5.7% through terms

• Neuren Pharmaceuticals (NEU AU)‘s lead product Daybue (trofinetide) has obtained FDA approval for the treatment of Rett syndrome in adult and pediatric patients two years of age and older.  
• Daybue is expected to be available in the US in April, 2023. Neuren is eligible to receive royalties on net sales of trofinetide in North America, plus milestone payments.  
• Geography expansion of trofinetide (mainly European approval and launch), label expansion possibility of trofinetide, and Neuren’s pipeline progress can act as potential upside catalysts for the stock.

• Australian Clinical Labs (ACL AU) has announced its intention to make an off-market takeover for Healius (HLS AU) offering 0.74 ACL shares for each Healius share.
• The offer represents a nil-premium merger and if successful will result in current Healius (HLS AU) shareholders owning 68% of the merged company.
• The offer is a big discount to longer-term VWAPs. We don’t expect shareholders will tender and Australian Clinical Labs (ACL AU) will need to sweeten the offer.

• Australian Clinical Labs (ACL AU) has launched an all-scrip off-market takeover offer for Healius (HLS AU) at 0.74 ACL shares for each HLS share.
• The offer is saddled with several onerous conditions which disproportionately shift the risk to HLS shareholders. The offer is long-dated as ACCC approval is expected to take six months.
• The lack of premium and unattractive deal metrics suggests a high probability of Board rejection. Nevertheless, ACL’s bid underscores HLS’s beaten-down valuation. Expect improved terms.

• Australian Clinical Labs (ACL AU) has announced a merger proposal for Healius (HLS AU), the completion of which would create Australia’s largest pathology provider.
• ACL is offering 0.74 new shares for each share in Healius. Healius shareholders will hold 68% of the enlarged entity, with ACL shareholders holding 32%.  
• The Offer is conditional on a 90% minimum acceptance condition and regulatory approvals (ACCC and FIRB). Healius’ board is evaluating the Offer. 

• The IE considers Tianqi Lithium (9696 HK)/IGO Ltd (IGO AU) JV’s A$0.50 offer for Essential Metals (ESS AU) to be fair and reasonable as it is higher than its A$0.283-0.468 valuation. 
• Odey, the recent substantial shareholder, hoped for a competing proposal which has not materialised. On 10 March, Odey sold down 21% of its holding at A$0.48 per share.
• Barring an unlikely competing proposal, this is done. At the last close price and for the 5 May payment, the gross and annualised spread is 3.1% and 28.4%, respectively.

• Back on the 9th Jan, small lithium player Essential Metals (ESS AU) entered into a Scheme with Tianqi Lithium JV, comprising Tianqi (9696 HK) (51%) and IGO (IGO AU) (49%). 
• The Scheme Booklet is now out, with a Scheme Meeting tabled for the 20 April. The Independent Expert reckons the Scheme Consideration is fair. FIRB is no longer required. 
• This is done and has traded tight from the onset.

• Comms Group Ltd (ASX:CCG) operates in the broad IT and communication space both domestically and offshore.
• Domestically, CCG provides a full range of IT and communication services in the highly fragmented MSP/ICT market, a sector expected to grow on the back of digitalisation, an increasingly remote workforce, the need for cyber security, and increasing complexity.
• Internationally, CCG is a niche player in the provision of corporate voice solutions for enterprises with an established, capital-light network particularly strong in the Asia Pacific. 

• Addition of Writing Legends to existing maths and literacy apps will create more opportunities to upsell and cross-sell. 
• Brightpath, the recently acquired assessments technology provider, adds a new horizontal with the potential to reduce school customer churn
• Competition is high from groups such as DreamBox, IXL, ABC Mouse, Khan Academy and BYJU’S . 3P Learning remains a significant player with a strong customer base and improving product portfolio.

• Kelsian Group (KLS AU) aims to raise around US$90m (A$135m) via an institutional placement. Together with the placement, the company will also undertake a US$95m (A$143m) non-renounceable entitlement offer. 
• The issuance of new shares will be a large one for the firm to digest, representing 150.6 days of three month ADV and 20.3% of current mcap. 
• In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

Actinogen is on track to start US recruitment in Q2 CY23 for the six-month, placebo-controlled Phase IIb portion of the XanaMIA study. The study portion is designed to assess Xanamem in a population of patients with mild cognitive impairment (CI) and/or mild Alzheimer’s disease (AD), who at baseline will have been confirmed as biomarker-positive for progressive AD. We believe market participants will be keen to observe whether this study portion will confirm the positive efficacy findings shown in a subset biomarker analysis from the earlier XanADu study. We expect the next material clinical data milestone for the company over the next 12 months will be the XanaCIDD study results, due in late CY23 or early CY24. This study aims to demonstrate whether Xanamem can show efficacy signals in patients with CI associated with major depressive disorder (MDD). After rolling our model forward and adjusting for forex, we now obtain an rNPV valuation of A$702m (vs A$651m previously).

• Pointerra Ltd (ASX:3DP) provides a powerful cloud-based solution (Pointerra3D) for managing, visualising, analysing, using, and sharing massive 3D point clouds and datasets.
• The company has taken a highly manual, slow, and cost-prohibitive process and turned it into a fast, efficient workflow solution for 3D data, enabling digital asset management from any device in any location.
• The Pointerra3D suite of solutions spans target sectors including survey and mapping; architecture, engineering, and construction (AEC); utilities; transport; resources; and defence and intelligence.