In today’s briefing:
- InvoCare Agrees To TPG’s Lower Offer
- CBA – The Applause Over Results Seem Misplaced, Considering Credit Metrics
- InvoCare (IVC AU): TPG’s Binding Proposal at A$12.70
- Australis Oil & Gas Limited – Maintaining the Strategic Position in the TMS
InvoCare Agrees To TPG’s Lower Offer
- After pitching a A$13/share NBIO on the 15 May, TPG has now inked a Scheme Implementation agreement with InvoCare (IVC AU) at A$12.70/share, inclusive of a A$0.60/share fully franked dividend.
- This compares to PE-outfit TPG’s A$12.65/share NBIO on the 7 March – which Australia’s leading funeral services provider InvoCare promptly rejected.
- A comparatively benign flu season, and an expected ~10% decline in 1H23 EBITDA, largely account for InvoCare’s change of heart.
CBA – The Applause Over Results Seem Misplaced, Considering Credit Metrics
- Credit cost surge in 1H23 is strangely tempered in 2H23 results, although still rising
- Despite rising credit costs, they remain at relatively low levels compared with history
- Data on credit metrics suggest to us that credit costs should have been higher in 2H23
InvoCare (IVC AU): TPG’s Binding Proposal at A$12.70
- Invocare Ltd (IVC AU) has entered a SID with TPG at A$12.70 per share, a modest -2.3% discount to the previous non-binding offer of A$13.00 per share.
- The price cut was justified by a trading update which noted a challenging near-term macro-environment and softening in market volumes. The median peers’ share prices have also derated.
- The offer requires shareholder, FIRB and OIO approval. At the last close and for the end of November payment, the gross and annualised spread is 1.8% and 5.7%, respectively.
Australis Oil & Gas Limited – Maintaining the Strategic Position in the TMS
- Australis Oil & Gas (ASX:ATS) is an oil and gas producer/developer, with a strategic and controlling position in the emerging Tuscaloosa Marine Shale (TMS) oil play, onshore US.
- The TMS is an Eagle Ford-equivalent but early-stage oil play with recoverable oil potential of around 7bn barrels – this is the next big thing.
- Australis represents a highly leveraged and attractive exposure to the transformational potential of the TMS oil play.
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