In today’s briefing:
- [UPDATE] Tax-Loss Selling in Australia – Time To Unwind the Basket
- DDH1 To Merge With Perenti
- Silk Laser Firms Offer With Wesfarmers
- DDH1 (DDH AU): Binding Offer from Perenti (PRN AU)
- Silk Laser Australia (SLA AU): Wesfarmers Binding Offer, Next Move EC Healthcare
[UPDATE] Tax-Loss Selling in Australia – Time To Unwind the Basket
- In Tax-Loss Selling in Australia – Brief Historical Analysis And A Trade Basket at the start of June I proposed a basket.
- We are getting to the end of June. Time to unwind that short basket. The named ticker was -26%. The 70-name basket underperformed ASX200 by 4.4%.
- One can now go long the basket into end-June as historically it outperforms S&P-ASX200 over two months. If one did not short, one can still go long. Basket below.
DDH1 To Merge With Perenti
- Specialty mining driller DDH1 (DDH AU) has announced a merger, by way of a Scheme, with Perenti Global (PRN AU).
- Under the proposed terms, DDH1 shareholders will receive for each DDH1 share held $0.1238 cash plus 0.7111 Perenti shares, for an implied value of A$1.01/share, or a 17.4% premium.
- Directors and shareholders with a combined 38% of DDH1 shares have indicated an intention to vote in favour of the transaction. Scheme implementation is expected in early October 2023.
Silk Laser Firms Offer With Wesfarmers
- On the 19 April, Silk Laser Australia (SLA AU), an operator of specialist clinic networks across Australia, announced a $3.15/share NBIO from Wesfarmers Ltd (WES AU)
- Ahead of the expiry of Wesfarmers’ due diligence, EC Healthcare (2138 HK) snuck in a $3.35/share NBIO. Wesfarmers opted out of its matching rights. Although due diligence remained ongoing.
- SLA has now announced a binding implementation agreement with Wesfarmers at A$3.35/share. No word, as yet, from EC Healthcare. Nor is one expected.
DDH1 (DDH AU): Binding Offer from Perenti (PRN AU)
- DDH1 (DDH AU) has entered a SID with Perenti Global (PRN AU) at A$0.1238 cash plus 0.7111 PRN shares for each DDH share, a 17.4% premium to DDH’s 5-day VWAP.
- The key conditions are shareholder scheme approval and ACCC clearance. Shareholders representing 38.0% of outstanding shares will vote in favour of the scheme.
- The offer is attractive compared to peer multiples, and the net exchange ratio is fair on a 1-year basis. A critical risk is volatility risk around PRN shares.
Silk Laser Australia (SLA AU): Wesfarmers Binding Offer, Next Move EC Healthcare
- Silk Laser Australia (SLA AU)‘s binding offer from Wesfarmers Ltd (WES AU) is at A$3.35 per share which is in line with EC Healthcare (2138 HK)’s non-binding proposal.
- While EC Healthcare is a relative minnow, it secured HK$1 billion (A$191 million) financing in May, which suggests a chance of returning with a higher offer.
- If EC Healthcare deployed the HK$1.0 billion loan for the acquisition, it would imply a price of A$3.60 per share, 7.6% above Wesfarmers’ offer.
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