In today’s briefing:
- Qantas Airways (QAN AU | BUY | TP:AU$6.58): Smooth Operator
- OreCorp: Silvercorp Switches To Off-Market Bid
Qantas Airways (QAN AU | BUY | TP:AU$6.58): Smooth Operator
- Qantas Airways (QAN AU) (QAN) is enjoying the best time of its life on industry consolidation benefits, demand exceeding supply to many sectors, and flourishing air cargo
- Domestic Australia is an ironclad goldmine, with a benign competitive environment as the archrival is busy restructuring. International sector capacity deployment is picking up, but still deep in underserved territory
- Target price AUD6.58 (+23% UPSIDE), based on 7x CY2024 PE – long-term historical mean. AUD500 million share buyback should provide downside support
OreCorp: Silvercorp Switches To Off-Market Bid
- On the 24 November, Silvercorp Metals (SVM CN) bumped its Scheme Offer for Orecorp Ltd (ORR AU) to A$0.19 in cash and 0.0967 new Silvercorp shares.
- At a 40.1% premium to undisturbed and key shareholder Tim Goyder (5.14%) supportive, this looked done. Then Perseus (PRU AU) built a 19.9% stake and said it would vote no.
- After postponing the Scheme meeting, Silvercorp and Orecorp have now agreed to an off-market takeover, on the same terms. The tendering threshold is 50.1%.
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