Daily Brief Australia: Genesis Minerals, Home Consortium Ltd and more

In today’s briefing:

Genesis Minerals (GMD AU) And St Barbara (SBM AU) Merger
Home Consortium (HMC AU) FTSE EPRA Index Deletion – Underperforming but STILL Expensive
St Barbara’s Reverse Merger Of Genesis

Genesis Minerals (GMD AU) And St Barbara (SBM AU) Merger

St Barbara Ltd (SBM AU) and Genesis Minerals (GMD AU) will merge via a scheme at a gross exchange ratio of 2.0338 SBM shares per GMD share.
The deal metrics are favourable for GMD shareholders. The gross exchange ratio is attractive and values GMD at a slight premium to mid-cap ASX peers on an EV/Resource basis.
The likely pushback from SMB shareholders is that the terms were struck from a position of share price weakness. However, the low SMB shareholder voting threshold (50%) will help.

Home Consortium Ltd (HMC AU) is a Super Stapled Security, having developed HomeCo Daily Needs REIT (HDN AU), overseen the Aventus Group (AVN AU) merger, IPOed HealthCo REIT (HCW AU).
The current market cap is 1.6x book and probably closer to 2x tangible book as a large “management and development capability premium” is baked in.
There is a FTSE EPRA Nareit index deletion on Friday. That could prompt further underperformance.

Gold miners St Barbara Ltd (SBM AU) and Genesis Minerals (GMD AU) have agreed to merge via a Scheme. Inter-conditionally, SBM will demerge Atlantic, Simberi, and other assets.
SBM will issue 2.0338 of its own shares for each GMD share. Conditional on the Scheme and asset demerger, Genesis will raise $275m to fund the merged entity.
At completion, SBM shareholders will hold 38% in the combined group, current Genesis shareholders 41%, with the remaining 22% held by participants in the capital raising.

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