In today’s briefing:
- Australia/NZ Real Estate: Stocks With (Large) Passive Flows
- Namoi Cotton (NAM AU): Louis Dreyfus Declares Offer Unconditional
- Rex Minerals (RXM AU): Scheme Vote on 10 October
- Challenger Limited Placement – Discount Isn’t Enticing Enough for a Surprise Selldown
- Rex Minerals (RXM AU): 10th Oct Vote On Salim Group’s Offer
- NextEd Group: WOW! NXD Soars 50%, as Nervous Times Loom for Australian Private Education
Australia/NZ Real Estate: Stocks With (Large) Passive Flows
- There will be passive buying in Nextdc Ltd (NXT AU) and Charter Hall (CHC AU) and selling in Vital Healthcare Property Trust (VHP NZ) at the close on 20 September.
- Charter Hall (CHC AU)‘s stock price jumped following announcement of results and that was accompanied by big short covering. There should still be more positioning here.
- Nextdc Ltd (NXT AU)‘s increase in cumulative excess volume came on a drop in the stock price. There could be some covering here as positioning builds up.
Namoi Cotton (NAM AU): Louis Dreyfus Declares Offer Unconditional
- Louis Dreyfus Company (LDC) and Olam (OLG SP)‘s Olam Agri have been going toe-to-toe over Namoi Cotton (NAM AU) since the 1st February. LDC has now declared its Offer unconditional.
- It’s an interesting move. Namoi is trading through LDC’s A$0.67/share Offer terms. But unlike Olam’s Offer, LDC now has FIRB and ACCC under its belt.
- Currently trading at Olam’s A$0.70/share terms. All eyes are on ACCC giving Olam the green light. Or not.
Rex Minerals (RXM AU): Scheme Vote on 10 October
- The Rex Minerals (RXM AU) IE considers MACH Metals Australia’s A$0.47 offer fair and reasonable as it is towards the upper end of the A$0.346 to A$0.484 valuation range.
- The key conditions are shareholder and FIRB approvals. FIRB approval should be forthcoming as Salim is the largest shareholder and the cordial Indonesia-Australia relations.
- An attractive offer, medium retail ownership and no independent substantial shareholder ensures a done deal. At the last close and for the 30 October payment, the gross/annualised spread is 3.3%/15.9%.
Challenger Limited Placement – Discount Isn’t Enticing Enough for a Surprise Selldown
- AP Liberty (Apollo) is looking to raise US$318m from trimming its stake in Challenger Ltd (CGF AU).
- Apollo’s stake in the firm dates back to Jul 2021, when the investor first acquired a 18% stake in the firm for A$720m.
- In this note, we run the deal through our ECM framework and comment on deal dynamics.
Rex Minerals (RXM AU): 10th Oct Vote On Salim Group’s Offer
- Back on the 8th July, copper-gold play Rex Minerals (RXM AU) entered into a Scheme with MACH Australia. MACH, a wholly-owned entity of Indonesia’s Salim Group, at A$0.47/share, in cash.
- That’s a 71% premium to last close and a decade-high. The Offer has unanimous board support. Apart from Rex shareholder approval, the Offer requires FIRB signing off.
- The Scheme Booklet is now out, with a Scheme Meeting to be held on the 10th October. Expected implementation on the 30 October. The IE says fair & reasonable.
NextEd Group: WOW! NXD Soars 50%, as Nervous Times Loom for Australian Private Education
- Government hammers the international VET sector: Government issues tough caps, reducing international students in VET.
- Reliance on international students: NextEd will struggle to operate under reduced international student volumes.
- Diversification underway: NextEd have been proactive in countering government policy.
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