In today’s briefing:
- Alcoa (AA US) Makes an Offer for Alumina (AWC AU)
- CSR (CSR AU): Saint-Gobain’s Binding Proposal at A$9.00
- Alumina (AWC AU): Alcoa’s All-Scrip Non-Binding Proposal Seems Opportunistic
- ABB Targets Superloop After Taking Out Symbio
- CSR (CSR AU): Saint Gobain Firms $9/Share Bid
- EQD | S&P/ASX200 Stalled, SHORT Opportunity
- Kinatico Ltd – H1 Result In-Line, SaaS Now 30%+ of Revenue
- Adbri (ABC AU): CRH/Barro’s Firm Offer
- H1 result in-line, SaaS now 30%+ of revenue
- Rent.com.au Ltd – Core Portal Proving Resilient, RentPay Building Scale
Alcoa (AA US) Makes an Offer for Alumina (AWC AU)
- Alcoa (AA US) has made a non-binding, indicative and conditional proposal to acquire all shares in Alumina (AWC AU). Shareholders will receive 0.02854 shares of Alcoa for each Alumina share.
- Alcoa (AA US) has entered into an agreement with Allan Gray Australia that gives them the right to acquire 19.9% of Alumina Ltd (AWC AU) at the same swap ratio.
- Alumina Ltd (AWC AU) is a potential delete from the ASX100 Index at the March rebalance and that could provide an entry into the stock.
CSR (CSR AU): Saint-Gobain’s Binding Proposal at A$9.00
- CSR Ltd (CSR AU) has entered a scheme implementation deed with Cie De Saint-Gobain (SGO FP) at A$9.00 per share, a 32.9% premium to the undisturbed price (20 February).
- The offer has a ticking fee of A$0.02 per month (accrued daily) if the scheme’s effective date is delayed beyond 26 June. The offer requires FIRB approval.
- The offer is attractive and represents a 15-year high. At the last close and for a mid-June payment, the gross/annualised spread is 7.4%/28.8%.
Alumina (AWC AU): Alcoa’s All-Scrip Non-Binding Proposal Seems Opportunistic
- Alumina Ltd (AWC AU)‘s non-binding proposal from Alcoa (AA US) is 0.02854 Alcoa shares per Alumina share, implying a value of A$1.15, a 13.1% premium to the undisturbed price.
- Alcoa has been granted a 20-business day exclusivity period. The Board intends to recommend a binding proposal. Allan Gray, the largest shareholder, is supportive.
- While strategically sensible, the offer is not a knockout bid. The headcount test is a risk as retail forums suggest a majority view forming against the offer.
ABB Targets Superloop After Taking Out Symbio
- The hunter becomes the hunted. After Superloop (SLC AU) failed to clinch Symbio Holdings (SYM AU) last year, Aussie Broadband (ABB AU) has now made an Offer for Superloop.
- ABB’s indicative Offer provides Superloop shareholders with 0.21 new ABB shares for each Superloop share held, or an indicative Offer price of A$0.95/share, a 33.2% premium to the three-month VWAP.
- ABB has picked up 19.9% in Superloop, also at A$0.95/share. Superloop has yet to respond.
CSR (CSR AU): Saint Gobain Firms $9/Share Bid
- On the 21st Feb, Saint-Gobain (SGO FP) made an indicative Offer to CSR Ltd (CSR AU) shareholders of A$9/share by way of a Scheme, a 34% premium to last close.
- Saint-Gobain and CSR have now entered into a definitive agreement, also at $9/share. The business combination has been unanimously approved by the boards of both companies.
- Conditions include CSR’s shareholder approval and FIRB signing off. No specific mention of ACCC. The transaction is expected to close in the second half of this year.
EQD | S&P/ASX200 Stalled, SHORT Opportunity
- The ASX 200 INDEX closed last week down, and this week is barely up, it has been flat for 3 weeks and its direction is unclear.
- The index may be preparing for a pullback, even though our models at the moment are not flashing yet the “go SHORT” signal. Covering LONG holdings may be wise.
- Wait for prices > 7670 or the end of this week, if the index closes the week up, to increase the probability of success for a SHORT Trade.
Kinatico Ltd – H1 Result In-Line, SaaS Now 30%+ of Revenue
- Kinatico Ltd (ASX:KYP) is a ‘Know Your People’ regtech company providing workforce compliance monitoring and management technology and services.
- KYP has reported H1 FY24 NPAT of $0.357m, a $1.13m turnaround on the previous corresponding period (pcp), and the company’s best-ever result.
- The gross margin and EBITDA margin hit record levels of 67.7% and 13.4% respectively. The result was above our gross margin forecast but in line with our EBITDA estimate.
Adbri (ABC AU): CRH/Barro’s Firm Offer
- Back on the 18 December 2023, construction play Adbri (ABC AU) entered into a process and exclusivity deed with CRH (CRH US) and 42.7%-shareholder Raymond Barro (Chairman).
- Adbri has now entered into a Scheme Implementation Deed with CRH under which CRH will acquire all of the shares in Adbri that the Barro Group does not currently own.
- Conditions include Adbri’s shareholder approval and FIRB signing off. The transaction is expected to close in June of this year.
H1 result in-line, SaaS now 30%+ of revenue
- Kinatico Ltd (ASX:KYP) is a ‘Know Your People’ regtech company providing workforce compliance monitoring and management technology and services.
- KYP has reported H1 FY24 NPAT of $0.357m, a $1.13m turnaround on the previous corresponding period (pcp), and the company’s best-ever result.
- The gross margin and EBITDA margin hit record levels of 67.7% and 13.4% respectively.
Rent.com.au Ltd – Core Portal Proving Resilient, RentPay Building Scale
- Rent.com.au Limited (ASX:RNT) is a purpose-led company seeking to empower home renters through its technology platform and a growing number of aligned transactional services.
- The company has reported an 11% increase in H1 FY24 revenue to $1.6m with its transactional platform, RentPay delivering a 137% increase in revenue to $0.22m, driven by a 122% increase in customers and ARPU growth of 18%.
- The search portal reported a positive EBITDA of $0.092m for the half, its best result in two years and up 42% on the previous corresponding period (pcp), while RentPay posted a loss of $1.029m, flat on the pcp, and a 26% improvement on H2 FY23.
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