Category

Australia

Jul 29
0

Daily Brief Australia: Ramsay Health Care and more

By | Australia, Daily Briefs

In today’s briefing:

  • (Mostly) Asia M&A: July 2022 Roundup

(Mostly) Asia M&A: July 2022 Roundup

By David Blennerhassett

  • For the month of July, only 4 new deals (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of just ~US$1bn.
  • The average premium for the new deals announced (or first discussed) in July was ~42%, and a year-to-date average of 38%.
  • This compares to the average premium for all deals in 2021 (165 deals), 2020 (158 deals), and 2019 (145 deals) of 33%, 31%, and 31.5% respectively.

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Jul 28
0

Daily Brief Australia: Yancoal Australia, Australian Unity Office Fund, MACA Ltd and more

By | Australia, Daily Briefs

In today’s briefing:

  • Yancoal Australia Placement – Cleanup Sale by Glencore Now the Ball Is in Yankuang Court
  • Australian Unity Office: Crushed as Aliro Walks, But Actively Seeking Situations
  • MACA: Thiess’s Friendly Cash Offer

Yancoal Australia Placement – Cleanup Sale by Glencore Now the Ball Is in Yankuang Court

By Clarence Chu

  • Glencore is looking to raise US$293m (A$422m) from selling its stake in Yancoal Australia (YAL AU). This would be a clean up sale.
  • Glencore has been sitting on its stake for a while now, and the two have a JV in the Hunter Valley Operations, the latter which commenced in Jul 2017.
  • The deal, while a large one to process at 135.6 days of three month ADV, represents just 5.6% of Yancoal Australia’s current mcap.

Australian Unity Office: Crushed as Aliro Walks, But Actively Seeking Situations

By Travis Lundy

  • Australian Unity Office Fund (AOF AU) was the subject of six successive bids by Starwood between 2018-2020 and a bid by Charter Hall (CHC AU) and Abacus Property (ABP AU).
  • Large AOF shareholder Hume knocked back the ABP/CHC bid and Starwood never got to the final stages. But Aliro Group’s (CEO is ex-CHC) bid at A$2.45 got Hume’s support. 
  • Then on 25 July, Aliro walked. And the shares fell. From A$2.21 to A$1.80. Ouch. 

MACA: Thiess’s Friendly Cash Offer

By David Blennerhassett

  • MACA Ltd (MLD AU) recently announced a friendly off-market cash offer from fellow contractor Thiess, at A$1.025/share, a 28.1% premium to previous close.
  • The Offer is subject to limited conditions, including FIRB , ACCC sign-off, no prescribed occurrences, no issue of convertible securities, derivatives, or other rights, and 90% minimum acceptances.
  • The Offer has unanimous support from MACA’s board. Applications to FIRB and the ACCC have already been submitted. The announcement suggests MACA remains open to alternative approaches.

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Jul 27
0

Daily Brief Australia: MACA Ltd and more

By | Australia, Daily Briefs

In today’s briefing:

  • MACA’s Recommended $1.025 Per Share Takeover Offer from Thiess

MACA’s Recommended $1.025 Per Share Takeover Offer from Thiess

By Arun George

  • MACA Ltd (MLD AU) has recommended a A$1.025 per share offer from Thiess. The offer price represents a 28.1% premium to the unaffected price of A$0.80 (on 25 July).
  • The offer is conditional on a 90% minimum acceptance condition and regulatory approvals (FIRB and ACCC). The target statement will be released in late August.
  • We think that the offer is reasonable in the context of historical share prices and multiples. At the last close, the gross spread is 3.5%.

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Jul 26
0

Daily Brief Australia: Genex Power Ltd and more

By | Australia, Daily Briefs

In today’s briefing:

  • Genex: Atlassian’s Farquhar Makes An Offer
  • Genex’s Offer of A$0.23 from Skip Capital Likely Won’t Cut It

Genex: Atlassian’s Farquhar Makes An Offer

By David Blennerhassett

  • Renewable energy play Genex Power Ltd (GNX AU) has announced a non-binding indicative proposal from Atlassian’s Scott Farquhar and Stonepeak, by way of a Scheme, at A$0.23/share. 
  • That’s around a 64% premium. Farquhar holds a 19.9% stake. 
  • Farquhar, along with Atlassian co-founder Mike Cannon-Brookes, backed Genex capital raising in March last year.

Genex’s Offer of A$0.23 from Skip Capital Likely Won’t Cut It

By Arun George

  • Genex Power Ltd (GNX AU) shares rose 44% on the back of an A$0.23 per share offer from Skip Capital and Stonepeak. Skip also increased its stake to 19.99%.
  • At first glance, the offer looks generous in comparison to peer multiples and recent share prices. However, the offer is opportunistic partly due to Genex’s 500MW pipeline of projects. 
  • Benchmarking the precedent transaction multiples suggests that Genex’s existing portfolio is worth at least A$0.27 per share. The Board should engage for a higher price. 

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Jul 25
0

Daily Brief Australia: Sayona Mining and more

By | Australia, Daily Briefs

In today’s briefing:

  • S&P/​​​ASX Index Rebalance Preview: Busy Rebalance With Lots of Changes Expected

S&P/​​​ASX Index Rebalance Preview: Busy Rebalance With Lots of Changes Expected

By Brian Freitas

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Jul 24
0

Daily Brief Australia: Pendal Group and more

By | Australia, Daily Briefs

In today’s briefing:

  • (Mostly) Asia-Pac Weekly Risk Arb Wrap: Pendal, Link Ad, Toshiba, Excelpoint, Cocoaland, True/DTAC

(Mostly) Asia-Pac Weekly Risk Arb Wrap: Pendal, Link Ad, Toshiba, Excelpoint, Cocoaland, True/DTAC

By David Blennerhassett

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Jul 22
0

Daily Brief Australia: Australia and New Zealand Banking Group (ANZ), Link Administration, Brambles Ltd and more

By | Australia, Daily Briefs

In today’s briefing:

  • ANZ’s Equity Raise Successful, Trading at TERP, and STILL Cheap To Peers
  • Link Admin And Dye & Durham Agree On Terms
  • Link and DND Shake Hands at A$4.81
  • Cooper Investors Australian Equities Fund Quarterly Update – June 2022

ANZ’s Equity Raise Successful, Trading at TERP, and STILL Cheap To Peers

By Travis Lundy

  • ANZ got about half its equity raise done, with the shortfall bookbuild only being 5% of the institutional total and clearing above TERP. Now the retail rights.
  • Risk management mechanisms suggest rights trade expensive to stock near-term, then cheapen, as ANZ shares experience some selling pressure from arbs.
  • But ANZ is cheap. Relative weakness on FY2-FY3 EPS forecasts has contributed to 25% underperformance vs Peers since January but Relative Multiple Deterioration has contributed more.

Link Admin And Dye & Durham Agree On Terms

By David Blennerhassett

  • Link Administration (LNK AU) announced it has agreed to Dye & Durham’s latest $4.81/share offer, which is 13% below its initial $5.50/share approach last December.
  • Link shareholders may also receive an additional A$0.13 from the sale of the Banking and Credit Management (BCM) business under the latest offer.
  • This transaction is still subject to Australian Competition and Consumer Commission clearance, which should happen once D&D undertakes to offload its GlobalX ops.

Link and DND Shake Hands at A$4.81

By Arun George

  • Link Administration (LNK AU) has entered a revised scheme implementation deed with Dye&Durham/DND at A$4.81 per share. The scheme meeting will be held in mid-August.
  • Shareholders will be supportive due to deal fatigue, and the offer price is 11% above the undisturbed price and at the low end of the original IE valuation range.
  • Regulatory approvals are a key risk. DND is presumably confident in its undertakings to gain ACCC approval. At last close, the gross spread is 7.8%.

Cooper Investors Australian Equities Fund Quarterly Update – June 2022

By Fund Newsletters

  • Cooper Investors Pty Limited (“CI”) is a specialist equities fund manager with funds under management of approximately A$13 billion.
  • Both stocks and bonds performed poorly over the last 12 months, pulling back 10 year returns to single digit levels.
  • Only physical commodities offered respite, a function of the inflationary forces driving their prices higher.

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Jul 21
0

Daily Brief Australia: Pendal Group, Tassal and more

By | Australia, Daily Briefs

In today’s briefing:

  • Perpetual Needs To Pay Up For Pendal
  • Tassal: Cooke Increases Its Stake to 10.49%

Perpetual Needs To Pay Up For Pendal

By David Blennerhassett

  • Back on the 4 April, asset manager Pendal Group (PDL AU) announced a non-binding proposal from investment firm Perpetual Ltd (PPT AU).
  • As widely expected, Pendal’s board unanimously determined that the indicative cash/scrip Offer significantly undervalued the current and future value of the company.
  • Pendal said yesterday that it is still in discussions with Perpetual regarding a potential transition.  Using yesterday’s close, and applying the same terms, backs out an indicative price of A$5.67/share. 

Tassal: Cooke Increases Its Stake to 10.49%

By Arun George

  • On 19 July, Cooke, the spurned suitor, increased its stake in Tassal (TGR AU) to 10.49%. The average price to build the 10.49% stake is A$4.14 per share. 
  • Cooke also hired Phil Wiese, the former CEO of Huon Aquaculture (HUO AU), as a MD in Canada. Mr Wiese is well qualified to run Tassal should Cooke acquire it. 
  • With shareholders happy to sell to Cooke despite the Board’s assertions that the previous bid undervalued Tassal, a new offer will force the Board to engage.

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Jul 20
0

Daily Brief Australia: Pendal Group, Piedmont Lithium and more

By | Australia, Daily Briefs

In today’s briefing:

  • Perpetual Mulls Another Bid for Pendal
  • S&P/​​​​​​ASX Quiddity Leaderboard Sep 2022: Potential ADDs Could Outperform Potential DELs

Perpetual Mulls Another Bid for Pendal

By Arun George

  • Perpetual Ltd (PPT AU) confirmed today that it is currently in “high-level, preliminary, confidential discussions with Pendal in relation to a potential acquisition.”
  • Since rejecting Perpetual’s offer, Pendal Group (PDL AU)’s shares have underperformed most of its peers largely due to poor FUM performance. 
  • Despite today’s pop, Pendal trades at a discount to historical and peer multiples. Perpetual’s renewed interest points to its underlying value. 

S&P/​​​​​​ASX Quiddity Leaderboard Sep 2022: Potential ADDs Could Outperform Potential DELs

By Janaghan Jeyakumar, CFA

  • In this insight, we take a look at the potential index changes for S&P ASX 300, 200, 100, 50, and 20 in the September 2022 Rebalance.
  • I expect there to be 7 ADDs and 7 DELs for the ASX 200 Index and 23 ADDs and 18 DELs for the ASX 300 Index.
  • Based on recent price performance, I believe the Potential ADDs could outperform the Potential DELs over the next few weeks.

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Jul 19
0

Daily Brief Australia: Australia and New Zealand Banking Group (ANZ), Suncorp and more

By | Australia, Daily Briefs

In today’s briefing:

  • ANZ Bank (ANZ AU) Nixes MYOB, Yeas SunCorp Bank, To Raise A$3.5bn of Equity
  • ANZ Renounceable Entitlement Offer – Dilute Now, Accrete Later. Still Appears Better than MYOB
  • Suncorp’s Banking Sale to ANZ Will Unlock Value

ANZ Bank (ANZ AU) Nixes MYOB, Yeas SunCorp Bank, To Raise A$3.5bn of Equity

By Travis Lundy

  • Australia and New Zealand Banking Group (ANZ) (ANZ AU) this morning made a flurry of announcements. First and foremost, ANZ withdrew from discussions on MYOB.
  • Q3 earnings ended 30 June saw revenue +5%, lending up 3%yoy, markets revenue +7%, NIM up 3bp (rising rates helps). Basel3 APRA Level2/Level1 CET1 Ratios were 11.1%/10.4%. 
  • But the big news: ANZ is buying SunCorp Bank from SunCorp (SUN AU) for A$4.9bn (1.3x NTA), and will raise A$3.5bn through a 1 for 15 renounceable rights offering.

ANZ Renounceable Entitlement Offer – Dilute Now, Accrete Later. Still Appears Better than MYOB

By Sumeet Singh

  • ANZ aims to raise around US$2.4bn (A$3.5bn) via a renounceable entitlement offer to part fund the purchase of Suncorp Bank.
  • In our view, neither the fundraising nor the acquisition appear to be particularly well flagged. ANZ’s withdrawal from MYOB talks might be the most positive thing about the announcement.
  • In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

Suncorp’s Banking Sale to ANZ Will Unlock Value

By Arun George

  • Suncorp (SUN AU) agreed to sell its banking business (Suncorp Bank) to Australia and New Zealand Banking Group (ANZ) (ANZ AU) for A$4.9 billion in cash. Completion targeted for 2HCY2023.
  • Suncorp Bank’s sale price is attractive. We estimate that New Suncorp (ex-banking) is currently valued at a 24% discount to Insurance Australia (IAG AU) on an FY2023 P/E basis.
  • Post-Completion, New Suncorp will be a leaner and more efficient business which will be better positioned to close (or even exceed) the valuation gap to Insurance Australia Group.

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