Australia

There are 49 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
Three new deals were discussed this week: Anthoni Salim’s Exit Offer for Moya Holdings Asia (MHAL SP); 111 Inc (YI US)‘s MBO, and Singapore Medical (SMG SP)‘s MBO.
Key updates took place for Frasers Hospitality Trust (FHT SP),Link Administration (LNK AU), Giordano International (709 HK), Shidax Corp (4837 JP), and VNET (VNET US).

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Sep 15

Daily Brief Australia: Atlas Arteria, Ramsay Health Care and more

By Smartkarma Daily Briefs | Australia, Daily Briefs

In today’s briefing:

Atlas Arteria Placement – How to Lose Friends and Alienate Your Largest Shareholder
Atlas Arteria (ALX AU): Acquisition, ANREO & ASX50 Inclusion
Ramsay’s Bait-And-Switch KKR Offer Heads for the Exit

Atlas Arteria Placement – How to Lose Friends and Alienate Your Largest Shareholder

By Sumeet Singh

Atlas Arteria (ALX) aims to raise around US$2bn (A$3bn) via a non-renounceable entitlement offer to fund the purchase of its majority interest in Chicago Skyway.
Over the past few months, ALX has garnered interest from IFM which has increased its stake to 19.99%. IFM had publicly opposed this acquisition.
In this note, we will talk about the deal dynamic and run the deal through our ECM framework.

Atlas Arteria (ALX AU): Acquisition, ANREO & ASX50 Inclusion

Atlas Arteria (ALX AU) is acquiring 66.67% in Skyway Concession Company LLC, the concessionaire of the Chicago Skyway for an equity value of US$2.013bn (A$3.098bn).
The acquisition will be funded by a fully underwritten 1:1.95 ANREO to raise A$3.098bn. The offer price of A$6.3/share is a 13.7% discount to TERP and 19.3% discount to last.
The increase in market cap could result in Atlas Arteria (ALX AU) being added to the S&P/ASX 50 Index at the December rebalance.

Ramsay’s Bait-And-Switch KKR Offer Heads for the Exit

KKR cannot improve the terms of its offer but left the door open by stating that a deal can be quickly closed if the Board is willing to reset expectations.
The transaction is stuck in an impasse as Ramsay Health Care (RHC AU) will not recommend KKR’s offer until it is improved, and KKR says it cannot improve terms.
The peers’ shares have been, on average, flat since the undisturbed date. The shares are trading slightly below the undisturbed price and are attractive on fundamentals.

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Sep 14

Daily Brief Australia: Link Administration and more

By Smartkarma Daily Briefs | Australia, Daily Briefs

In today’s briefing:

Link Admin/D&D Deal Appears Toast As The Woodford Shoe Drops
Link’s Scheme on Life Support as the FCA Lands a Heavy Blow

Link Admin/D&D Deal Appears Toast As The Woodford Shoe Drops

The UK Financial Conduct Authority will approve Dye & Durham’s Offer for Link Administration (LNK AU) provided it backstops restitution and/or redress payments that the FCA may levy on …
… Link Fund Solutions Limited (LFSL) in relation to its management of the Woodford Fund. The amount? Up to a maximum ~A$523mn.
The FCA decision is not final. LFSL does not agree with its view. If D&D does not accept this commitment then a condition under the Scheme may not be satisfied.

Link’s Scheme on Life Support as the FCA Lands a Heavy Blow

FCA approval, a condition precedent, will be granted subject to a condition that Link Administration (LNK AU) makes funds available to cover any redress payments related to the Woodford matters.
The FCA’s maximum redress payment is £306 million. The timeline and amount of the final FCA fine remain unknown. Dye&Durham/DND and Link will struggle to find a resolution.
With a 30 September end date, the deal is teetering on collapse. The share price may prove attractive for long-term value investors as it reflects a sizeable FCA fine.

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Sep 12

Daily Brief Australia: Incannex Healthcare and more

By Smartkarma Daily Briefs | Australia, Daily Briefs

In today’s briefing:

Incannex Healthcare (IHL AU): Attractive Idea Backed by Niche Focus on Cannabinoid Pharmaceuticals

Incannex Healthcare (IHL AU): Attractive Idea Backed by Niche Focus on Cannabinoid Pharmaceuticals

By Tina Banerjee

Incannex Healthcare (IHL AU) has a differentiated product portfolio, addressing unmet global medical needs. With cash balance of A$37.5 million, Incannex is well-resourced to fund its activities for ~2.5 years.
Recently completed acquisition of APIRx Pharmaceuticals has strategically expanded intellectual property portfolio to 28 clinical programs, the world’s largest portfolio of patented medicinal cannabinoid drug formulations and psychedelic treatment protocols.
The combined annual global market size of the targeted indications is over $420 billion. The company’s strategy of combining cannabinoids with FDA-approved generic drugs calls for shorter regulatory pathway.

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Sep 11

Daily Brief Australia: Gold Road Resources, Sayona Mining, Tyro Payments, BHP Group Ltd and more

By Smartkarma Daily Briefs | Australia, Daily Briefs

In today’s briefing:

MVIS Global Junior Gold Miners Index Rebalance: One Delete & Plenty of Float Changes
MVIS Global Rare Earth/Strategic Metals Index Rebalance: Three Adds, Two Deletes
(Mostly) Asia-Pac Weekly Risk Arb Wrap: Tyro, Shidax, Link Admin, Giordano, Hitachi Transport
Global Backlash Against ESG (Part I)

MVIS Global Junior Gold Miners Index Rebalance: One Delete & Plenty of Float Changes

Great Panther (GPL US) is a deletion from the VanEck Vectors Junior Gold Miners ETF (GDXJ US). There are a lot of float changes that will result in passive flows.
One way turnover is estimated at 3.4% and will result in a one-way trade of US$106m at the September rebalance.
Most index constituents have traded poorly over the last few months and the stocks with passive inflows could outperform their peers in the short-term.

MVIS Global Rare Earth/Strategic Metals Index Rebalance: Three Adds, Two Deletes

Sayona Mining (SYA AU), Sigma Lithium (SGML US) and Tianqi Lithium (9696 HK) will replace Australian Strategic Materials (ASM AU) and Sierra Rutile Holdings (SRX AU) in the index.
Sayona Mining (SYA AU) is also an inclusion to the FTSE All-Cap and S&P/ASX 200 on the same day as the VanEck Vectors Rare Earth/Strategic Metals ETF (REMX US) addition.
We had Sayona Mining (SYA AU) and Tianqi Lithium (9696 HK) as potential adds while Australian Strategic Materials (ASM AU) and Sierra Rutile Holdings (SRX AU) were high probability deletes.

(Mostly) Asia-Pac Weekly Risk Arb Wrap: Tyro, Shidax, Link Admin, Giordano, Hitachi Transport

There are 49 – 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 were discussed this week: Potentia’s rejected proposal forTyro Payments (TYR AU) and Oisix ra daichi (3182 JP)‘s tilt for Shidax Corp (4837 JP).
Key updates took place for Link Administration (LNK AU), Giordano International (709 HK), and Hitachi Transport System (9086 JP).

Global Backlash Against ESG (Part I)

By Douglas Kim

This insight highlights the global backlash against ESG. This is a collaborative project between Douglas Kim and Kyle Rudden.
In particular, my insight will focus on three recent places of major backlash against ESG including United Kingdom, Texas, and Florida.
Despite efforts by ESG investors to increase renewables, a return to more BALANCED energy supplies is more likely, expanding the use of nuclear power and domestic oil & gas sources.

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Sep 10

Daily Brief Australia: Tyro Payments and more

By Smartkarma Daily Briefs | Australia, Daily Briefs

In today’s briefing:

Tyro Payments Rejects Potentia’s Proposal. MCB Accepts

Tyro Payments Rejects Potentia’s Proposal. MCB Accepts

Tyro Payments (TYR AU) has rejected a proposal from a Potentia-led consortium at A$1.27/share, by way of a Scheme.
Mike Cannon-Brookes’ Grok Ventures, holding 12.5% and Tyro’s largest shareholder, has backed the Offer.
Tyro’s board considered the proposal to be materially below Tyro’s fundamental value and highly opportunistic. Tyro’s share price was down 66% ytd prior to Potentia’s approach.

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Sep 09

Daily Brief Australia: Link Administration, Tyro Payments and more

By Smartkarma Daily Briefs | Australia, Daily Briefs

In today’s briefing:

Link Admin (LNK AU): ACCC Approval & Index Changes
Link Admin Gets ACCC Nod. Woodford Condition Outstanding
Link’s Scheme in the Home Stretch by Securing ACCC and CBI Approval
Tyro in Play as It Rejects Potentia’s A$1.27 Offer

Link Admin (LNK AU): ACCC Approval & Index Changes

The ACCC will not oppose the proposed acquisition of Link Administration (LNK AU) by Dye & Durham removing a major hurdle. Other regulatory approvals are still pending.
If regulatory clearances are received in the next week and the Court approves the Scheme, Link Administration (LNK AU) will stop trading at the close on 15 September.
We estimate passive trackers across all indices will need to sell 35.53m shares (A$153m; 18 days of ADV) of Link Administration (LNK AU) at the close on 15 September.

Link Admin Gets ACCC Nod. Woodford Condition Outstanding

Link Administration (LNK AU) has announced the Australian Competition and Consumer Commission will not oppose Dye & Durham’s proposed acquisition.
The next step is the rescheduled second court hearing on the 15 September.
The key outstanding condition concerns the “Woodford Matters”, and whether D&D potentially waives this condition, or digs in its heels.

Link’s Scheme in the Home Stretch by Securing ACCC and CBI Approval

Dye & Durham/DND’s proposed acquisition of Link Administration (LNK AU) at A$4.81 per share has received approvals from the ACCC and the Central Bank of Ireland.
Key conditions precedent remaining are FIRB, UK FCA and Luxembourg approvals. The second court hearing date has been adjourned to 15 September.
The transaction is in the home stretch and will likely complete. At the last close, the gross and annualised spread for a 27 September payment is 4.8% and 151%, respectively.

Tyro in Play as It Rejects Potentia’s A$1.27 Offer

Tyro Payments (TYR AU) rejected an indicative proposal from the Potentia consortium at A$1.27 per share as it was highly conditional and materially undervalued the business.
Grok, the largest shareholder will vote for a Potentia scheme unless there is a rival scheme which is A$0.25 per share higher than the value of the Potentia proposal.
Potentia’s move puts Tyro in play, and Grok’s involvement will force the Board to get an improved offer and/or flush out a competing bidder. There is another round to go.

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Sep 08

Daily Brief Australia: Australian Strategic Materials and more

By Smartkarma Daily Briefs | Australia, Daily Briefs

In today’s briefing:

MVIS Global Rare Earth/Strategic Metals Index Rebalance Preview: Couple of Potential Deletes

MVIS Global Rare Earth/Strategic Metals Index Rebalance Preview: Couple of Potential Deletes

Sierra Rutile Holdings (SRX AU) is a high probability delete from the index, while Australian Strategic Materials (ASM AU) is close to the deletion threshold.
Sayona Mining (SYA AU) is the highest ranked non-constituent while Tianqi Lithium (9696 HK) only makes inclusion at the entire IPO raise.
Deletion from the index will require passive trackers to sell over 5 days of ADV on Australian Strategic Materials (ASM AU).

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Sep 05

Daily Brief Australia: Link Administration, Charter Hall Social Infrastructure REIT and more

By Smartkarma Daily Briefs | Australia, Daily Briefs

In today’s briefing:

Merger Arb Mondays (05 Sep) – Link Admin, Ramsay, Genex, ResApp, Infomedia, DTAC/True, Giordano
S&P ASX Sep 22 Rebal: Decent Impacts but Avoid Short Buildup

Merger Arb Mondays (05 Sep) – Link Admin, Ramsay, Genex, ResApp, Infomedia, DTAC/True, Giordano

We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Indonesia, Malaysia, Thailand and Chinese ADRs.
Highest spreads – 21Vianet Group (VNET US), Alliance Aviation Services (AQZ AU), Ramsay Health Care (RHC AU), Infomedia Ltd (IFM AU), Link Administration (LNK AU), True Corp Pcl (TRUE TB).
Lowest spreads – MyDeal.com.au Ltd (MYD AU), MACA Ltd (MLD AU), Nearmap Ltd (NEA AU), Dongzheng Automotive Finance (2718 HK), Link Net (LINK IJ), Tassal (TGR AU), Frasers Hospitality Trust.

S&P ASX Sep 22 Rebal: Decent Impacts but Avoid Short Buildup

By Janaghan Jeyakumar, CFA

The index changes for the S&P ASX Index family for the September 2022 Rebalance were announced after the close on Friday.
There will be one change for the ASX 100 index and 8 changes for the ASX 200 Index. The ASX 300 Index will have 16 ADDs and 12 DELs.
In this insight, we take a closer look at our expectations for index flows and potential trading ideas.

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Aug 31

Daily Brief Australia: Nitro Software Ltd and more

By Smartkarma Daily Briefs | Australia, Daily Briefs

In today’s briefing:

Nitro’s Opportunistic A$1.58 Offer from Potentia

Nitro’s Opportunistic A$1.58 Offer from Potentia