Daily Brief Australia: Orora Ltd, MMG, Red 5 Ltd and more

• Sustainable packaging play Orora Ltd (ORA AU) has “received and has rejected an opportunistic, conditional and non-binding indicative proposal from Lone Star Fund“. 
• The A$2.55/share Offer (less any dividends declared or payable), by way of a Scheme, was a  33.9% premium to last close. Orora was down 25% YTD, prior to the proposal.
• Orora’s FY24 results will be released tomorrow. Expect more commentary on the rejection of Lone Star’s approach in the Q&A. 

• In response to media speculation, Orora Ltd (ORA AU) disclosed that it had rejected Lone Star’s indicative non-binding proposal at A$2.55 per share, a 33.5% premium to the undisturbed price.
• The offer is opportunistically timed to take advantage of the share price collapse precipitating from the profit warning on 2 April. 
• The Lone Star offer is unattractive and could also draw other suitors. If Lone Star walks, the downside is low, as Orora’s valuation is undemanding compared to peer multiples.

• In H1 2024 Profits and cash flow grew year over year
• Overall, operations tracking in line with previous guidance with some cost savings
• The key is the copper price which is closer to bottoming

• Red Five sold 412 million shares acquired through the process of merging with Silver Lake, making a tidy profit of 30 million
• The move gives Red Five nearly $500 million in cash and bullion with no debt, providing significant flexibility for the company
• Len’s discussion in the Diggers presentation indicated that this was a medium-term strategy with potential action by June 2025 for evaluating and dealing with the shares

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