Australia

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 – I-Tail (ITC TB) launches an up to US$593 million SET IPO, Lygend Resources & Technology (LR HK) set to launch an HKEx IPO to raise US$700-800 million.
Event-Driven developments – OZ Minerals Ltd (OZL AU), Perpetual Ltd (PPT AU)/Pendal Group (PDL AU), Nearmap Ltd (NEA AU), Halcyon Agri (HACL SP), Yashili International Holdings (1230 HK).

S&P/ASX Quiddity Final Expectations Dec 22: Mostly Mining Companies, Avoid Short Buildup!

By Janaghan Jeyakumar, CFA

In this insight, we take a look at the potential index changes for S&P ASX 200, 100, 50, and 20 in the run up to the December 2022 Rebalance.
The 6-month reference period for the December 2022 Rebalance is now complete.
I do not see any changes for ASX 20 or ASX 100. I see one ADD/DEL for ASX 50 and three ADDs/DELs for ASX 200.

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Nov 19

Daily Brief Australia: OZ Minerals Ltd and more

By Smartkarma Daily Briefs | Australia, Daily Briefs

In today’s briefing:

OZ Minerals (OZL AU)’s A$28.25 Non-Binding Offer from BHP

OZ Minerals (OZL AU)’s A$28.25 Non-Binding Offer from BHP

OZ Minerals Ltd (OZL AU) has received a revised non-binding indicative offer from BHP Group Ltd (BHP AU) at A$28.25 per share, a 13.0% premium to the previously rejected offer.
The Board has granted four weeks of due diligence and intends to recommend a binding offer at A$28.25 per share, in the absence of a superior proposal.
While the offer is below the rumoured Board’s target of a A$30 offer, it is still attractive. At the last close, the gross spread to the offer is 3.3%.

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Nov 18

Daily Brief Australia: OZ Minerals Ltd, Pendal Group, PTB Group Ltd and more

By Smartkarma Daily Briefs | Australia, Daily Briefs

In today’s briefing:

OZ Minerals (OZL AU): BHP Ups Offer by 13%; This Should Get Done
Pendal/Perpetual: Revised Terms As Supreme Court Orders Scheme To Proceed
OZ Minerals (OZL AU) And BHP Have a Deal – Investors Have an OTM Option on Copper
Pendal (PDL AU)/Perpetual (PPT AU) Deal Gets a Lifeline from the Court
PTB Group: Scheme Approved. Now For The Dividend

OZ Minerals (OZL AU): BHP Ups Offer by 13%; This Should Get Done

BHP Group has made a revised conditional, non-binding and indicative proposal to acquire all shares in OZ Minerals Ltd (OZL AU) at A$28.25/share, 13% higher than its earlier offer.
The OZ Minerals Board has agreed to give BHP Group Ltd (BHP AU) exclusive due diligence access for 4 weeks and intends to unanimously recommend the revised proposal.
Barring a competing proposal, this is BHP Group‘s best and final price – expect the stock to trade close to A$28/share today.

Pendal/Perpetual: Revised Terms As Supreme Court Orders Scheme To Proceed

Under the revised terms, Pendal (PDL AU) shareholders will receive 1 Perpetual (PPT AU) share for every 7 Pendal shares plus $1.65/share cash versus 7.50 Pendal shares and $1.976 cash.
Separately, the Supreme Court of NSW ruled that Perpetual cannot delay the Scheme on the expectation of a more favourable Offer for the company.
The first court hearing for the Scheme has been deferred until next week to seek orders convening the Scheme Meeting and for the despatch of the Scheme Booklet to shareholders.

OZ Minerals (OZL AU) And BHP Have a Deal – Investors Have an OTM Option on Copper

By Travis Lundy

After nearly 3 months of no talks and movement, then a flurry of both, BHP Group Ltd (BHP AU) and OZ Minerals Ltd (OZL AU) have an agreed Revised Proposal.
OZ Minerals Board has agreed to support the Revised Proposal at A$28.25/share, a 13% bump, subject to due diligence provided on an exclusive basis for four weeks.
A fully-franked dividend or capital return will be allowed (Scheme price to be adjusted). This will probably trade tight. One owns a call option on copper for probably 3-4 months.

Pendal (PDL AU)/Perpetual (PPT AU) Deal Gets a Lifeline from the Court

Pendal Group (PDL AU) entered a revised SID with Perpetual Ltd (PPT AU). The revised offer consists of scrip (1 Perpetual share for every 7 Pendal share) and cash (A$1.650).
Separately, the court found that Pendal could seek a range of remedies in addition to the A$23 million break fee should Perpetual terminate the scheme.
While Regal Partners (RPL AU)/BPEA EQT could yet derail the scheme by lobbing another bid for Perpetual, the unprecedented court ruling makes it more challenging and costly.

PTB Group: Scheme Approved. Now For The Dividend

PTB Group Ltd (PTB AU) shareholders comprehensively approved the PAG Scheme on the 16 November. Shares will be suspended from trading at the close on the 30 November.
However, before the trading halt, PTB’s board is expected to declare a final (and fully franked) dividend to Scheme shareholders up to the amount of A$0.03/share.
Expect that declaration to occur on or around Monday, 28 November.

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Nov 16

Daily Brief Australia: Monadelphous, Nitro Software Ltd and more

By Smartkarma Daily Briefs | Australia, Daily Briefs

In today’s briefing:

S&P/ASX Index Rebalance Preview: Shrinking Number of Changes in Dec
Nitro (NTO AU)’s Binding Offer from Alludo to Force Potentia’s Hand?

S&P/ASX Index Rebalance Preview: Shrinking Number of Changes in Dec

Volatile stock prices could mean one change for the S&P/ASX 50 Index and one change for the S&P/ASX 200 (AS51 INDEX) at the December rebalance.
Atlas Arteria (ALX AU) could replace Lendlease Group (LLC AU) in the S&P/ASX 50 Index, while Monadelphous (MND AU) could replace St Barbara Ltd (SBM AU) in the S&P/ASX 200.
Short interest on St Barbara Ltd (SBM AU) has spiked in the last few weeks and there could be short covering ahead of implementation of the changes.

Nitro (NTO AU)’s Binding Offer from Alludo to Force Potentia’s Hand?

Nitro Software Ltd (NTO AU) has entered into a binding agreement with Alludo at A$2.00 per share via a scheme or an off-market takeover, with a 50.1% minimum acceptance condition.
This is a good move by the Board to force Potentia to improve its off-market takeover bid of A$1.80 per share. Alludo can leverage synergies to support a higher bid.
The shares are trading through Alludo’s terms as there is an expectation of Potentia returning with improved terms. The break fee implies that Potentia needs to offer at least A$2.02.

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Nov 15

Daily Brief Australia: Warrego Energy, Nearmap Ltd and more

By Smartkarma Daily Briefs | Australia, Daily Briefs

In today’s briefing:

Warrego Enters Into A Scheme With Beach
Nearmap (NEA AU)’s Update Results in an Unwarranted Increase in the Spread

Warrego Enters Into A Scheme With Beach

The Stokes’ family-backed Beach Energy (BPT AU) is offering Warrego Energy (WGO AU)‘s shareholders $0.20/share, in cash, by way of a Scheme. That’s a 36% premium to the one-month VWAP.
A contingent value payment may be payable to Warrego shareholders from the sale of Warrego’s Spanish assets within 12 months
Warrego’s board unanimously recommend the Beach deal. The transaction is expected to complete in early March. The wild card is whether Strike Energy (STX AU) pitches a revised Offer.

Nearmap (NEA AU)’s Update Results in an Unwarranted Increase in the Spread

Nearmap Ltd (NEA AU)’s litigation and trading update resulted in the spread to Thoma Bravo’s A$2.10 offer widening to 7.7%. The scheme meeting is on 25 November.
There is no chance that the MAC clause will be triggered due to the downbeat trading update. However, the update is softening the stance of some of the retail dissenters.
There is a small chance of a bump as peers have re-rated. Nevertheless, the low spread prior to the update suggested that the risk of the NO vote was minimal.

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Nov 14

Daily Brief Australia: Warrego Energy and more

By Smartkarma Daily Briefs | Australia, Daily Briefs

In today’s briefing:

Warrego (WGO AU) Bidding War Between Strike (STX AU) And Beach (BPT AU)

Warrego (WGO AU) Bidding War Between Strike (STX AU) And Beach (BPT AU)

Beach Energy (BPT AU)’s all-cash proposal is A$0.20 per share and Strike Energy (STX AU)’s all-scrip proposal is 0.775x STX shares per Petrel Energy (WGO AU) share.
BPT’s all-cash offer provides value certainty. On the other hand, STX’s all-scrip offer lets shareholders get exposure to 100% interest in the West Erregulla project.
Both offers are reasonable but far from knockout bids, which suggests room for a further bidding round. At the last close, BPT’s offer is 3.2% higher than STX’s offer.

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Nov 12

Daily Brief Australia: Origin Energy and more

By Smartkarma Daily Briefs | Australia, Daily Briefs

In today’s briefing:

Origin Energy: Brookfield’s Energy Transition Bet

Origin Energy: Brookfield’s Energy Transition Bet

Brookfield and EIG/MidOcean are Offering Origin Energy (ORG AU) shareholders $9.00/share, a 54.9% premium to last close, by way of a Scheme. The Offer is non-binding and indicative.
Negotiations kicked off at $7.95 for the LNG developer in early August. Exclusive due diligence has been granted.
A firm offer will be contingent on ACCC and FIRB approval. Such a takeover may actually play into the Albanese government’s future energy plans.

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Nov 11

Daily Brief Australia: OZ Minerals Ltd, Origin Energy, Perpetual Ltd and more

By Smartkarma Daily Briefs | Australia, Daily Briefs

In today’s briefing:

OZ Minerals (OZL) – Copper and Comps Have Caught Up
Origin Energy’s (ORG AU) Indicative Offer of A$9.00 from Brookfield/EIG
Perpetual (PPT AU) Rejects a Revised A$33 Offer; Pendal (PDL AU) Deal Looks Toast

OZ Minerals (OZL) – Copper and Comps Have Caught Up

By Travis Lundy

In August, BHP Group Ltd (BHP AU) launched a $25/share bid – a price it saw as attractive and what target OZ Minerals Ltd (OZL AU) saw as opportunistic.
Copper had fallen, and peer stock prices had fallen too. Since then, copper has rebounded and peers have too so what was a 25-30% premium no longer exists.
This means the price of OZL should “enjoy” different dynamics going forward.

Origin Energy’s (ORG AU) Indicative Offer of A$9.00 from Brookfield/EIG

Origin Energy (ORG AU) received a conditional, non-binding indicative proposal from Brookfield and EIG at A$9.00 per share, a 54.9% premium to the undisturbed price (9 November).
The Board will grant eight weeks of due diligence access and intends to unanimously recommend a binding offer at A$9.00 per share. The offer is attractive.
Regulatory approvals are an overhang and would likely require price concessions. At the last close, the gross spread to the offer is 14.9%.

Perpetual (PPT AU) Rejects a Revised A$33 Offer; Pendal (PDL AU) Deal Looks Toast

Perpetual Ltd (PPT AU) has rejected a revised non-binding indicative proposal from Regal/BPEA EQT at A$33.00 per share, a 10% premium to the previously rejected offer of A$30.00 per share.
While the Regal Partners (RPL AU)/BPEA EQT revised offer is not quite a knockout bid, it is good enough to warrant the requested short due diligence period.
The PPT/Pendal Group (PDL AU) deal is seemingly dead. The A$23 million break fee is more than compensated by the A$172 million value uplift between Regal/BPEA EQT’s two proposals.

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Nov 10

Daily Brief Australia: Origin Energy, Pendal Group and more

By Smartkarma Daily Briefs | Australia, Daily Briefs

In today’s briefing:

Origin Energy (ORG AU): Indicative Proposal from Brookfield & MidOcean; Index Implications
Perpetual Rejects EQT/BPEA/Regal’s Revised Offer But Seeks Pendal Merger Delay

Origin Energy (ORG AU): Indicative Proposal from Brookfield & MidOcean; Index Implications

A Brookfield/MidOcean consortium has made a conditional, non-binding, indicative proposal to acquire 100% of the shares in Origin Energy (ORG AU) at A$9/share in cash.
The offer values Origin Energy (ORG AU)‘s equity at A$15.5bn and is a 54.9% premium to the last close. The premium is over 50% even using longer term VWAPs.
There will be changes to the S&P/ASX family of indices to maintain the number of index members. We will know more once an indicative timeline is published.

Perpetual Rejects EQT/BPEA/Regal’s Revised Offer But Seeks Pendal Merger Delay

Perpetual Ltd (PPT AU) has announced – and subsequently rejected – a revised non-binding proposal from EQT/BPEA/ Regal Partners (RPL AU) of A$33/share, up from the initial Offer of $30/share.
PPT factored in the value, high conditionality, transaction, and execution risks, and determined the proposal was not in the best interests of shareholders.
Against PPT’s request for a delay, Pendal (PDL AU) will proceed to the first court hearing for this week to convene a Scheme Meeting, which may occur in mid-December.

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Nov 08

Daily Brief Australia: Pilbara Minerals and more

By Smartkarma Daily Briefs | Australia, Daily Briefs

In today’s briefing:

MSCI Australia Nov SAIR: Significant Pre-Positioning on the Potential Deletes

MSCI Australia Nov SAIR: Significant Pre-Positioning on the Potential Deletes