In today’s briefing:
- Liontown Resources Placement – While Discount Is Wide, It Is at a Premium to Its Pre-Takeover Price
- Liontown Resources (LTR AU): State of Play
- Origin/Brookfield: Bump Expected Ahead Of 23 Nov Scheme Meeting
- Telix Pharmaceuticals (TLX AU): Strong Q3 Result; Clinical Trial Setback Is a Temporary Dampener
- Whitehaven Coal: Great Acquisition, Cash Gone, Now At The Mercy of The Cycle
Liontown Resources Placement – While Discount Is Wide, It Is at a Premium to Its Pre-Takeover Price
- Liontown Resources (LTR AU) is looking to raise A$365m (US$230m) for capital expenditure and to plug its funding gap for the Kathleen Valley Lithium (KVL) project.
- Together, the combined A$1.14bn equity/debt raising comes after Albemarle abandoned its A$6.6bn (US$4.2bn) acquisition bid for Liontown Resources earlier in the week.
- In this note, we will talk about the deal dynamics and run the deal through our ECM framework.
Liontown Resources (LTR AU): State of Play
- Liontown Resources (LTR AU) resumes trading today after announcing a raise of up to A$1.18bn to fully fund the Kathleen Valley Lithium Project to first production and beyond.
- The equity component is up to A$421m and the placement price of A$1.8/share is a 35.5% discount to the last close.
- The placement price is higher than the stock price prior to the Albemarle Corp (ALB US) offer and during a period when its peers have performed poorly.
Origin/Brookfield: Bump Expected Ahead Of 23 Nov Scheme Meeting
- On 20th October, the ACCC cleared Brookfield to take over Origin Energy (ORG AU).
- The transaction still needs shareholder approval and AustralianSuper with its too-big-to-ignore 13.68% stake reckons terms are below long-term value.
- The Scheme Booklet is out with a 23 November Scheme Meeting. The IE backs out a fair value range of $8.45-$9.48/share, but as at June 30. A bump is imminent.
Telix Pharmaceuticals (TLX AU): Strong Q3 Result; Clinical Trial Setback Is a Temporary Dampener
- Telix Pharmaceuticals (TLX AU) reported net operating cash inflow for 3Q23 of A$21.4M, a A$10.6M improvement on the prior quarter and fourth consecutive quarter of positive operating cash flow.
- In 3Q23, revenue from U.S. sales of Illuccix improved 13% QoQ to A$130.6M. Telix is progressing new marketing authorizations for Illuccix in several jurisdictions, including the U.K., EU, and Brazil.
- Telix announced preliminary results of its phase I ProstACT SELECT study. Although the study achieved primary endpoints, the findings noted grade 3 and 4 hematologic events.
Whitehaven Coal: Great Acquisition, Cash Gone, Now At The Mercy of The Cycle
- We listened to the conference call held by Whitehaven Coal (WHC AU) to update investors on its acquisition of BHP’s coking coal mines and Q2 2024 production.
- Based on spot prices of coking coal over 350 USD/ton and cash costs of 20% lower than the average of 2 years, the EV-EBITDA of acquisition is 1.8x
- The acquisition could be massively accretive if coking coal prices remain stronger for longer as the company pivots its strategy to becoming a large met coal producer.
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