Daily Brief Australia: Symbio Holdings, Rio Tinto Ltd, Paradigm Biopharmaceuticals, Rio Tinto and more

• Broadband provider Superloop Ltd (SLC AU)  has made an indicative Offer, by way of a Scheme, for cloud communication software outfit Symbio Holdings (SYM AU).
• Under the proposal, Symbio shareholders would receive A$1.425 (cash) and 2.14 new Superloop shares for each Symbio share held, for an implied price of A$2.85/share, a 20% premium to undisturbed.
• A four-week period of reciprocal exclusivity has been agreed to further progress the proposal.

• Symbio Holdings (SYM AU) has disclosed a non-binding indicative proposal from Superloop Ltd (SLC AU) at A$1.425 cash per share and 2.14 SLC shares per SYM share. 
• The implied offer price of A$2.85 per share is a 19.7% premium to the undisturbed price of A$2.38 per share. A 4-week reciprocal exclusivity period starts on 1 August.
• The offer is not close to being a knockout bid. Superloop states that it will progress the transaction on “a disciplined basis“, suggesting some risk towards a binding proposal.

• Discounts to NAV of covered holdcos have generally widened during July. Discounts to NAV: C.F.Alba, 47.5%; GBL, 39.1%; Heineken Holding, 16.4%; Industrivärden C, 6.6%; Investor B, 15%; Porsche Automobile Holding, 43.8%.
• The spread of Rio Tinto DLC tightened to 19%. Rio Tinto is a candidate for an Australian top hat structure.
• Interesting situations: Heineken Holding/Heineken, Porsche SE/vs. listed assets and Rio DLC.

Paradigm has shared its June 2023 quarterly update. In Q423, net cash outflow from operating activities was A$17.1m (up from A$10.3m in Q323) or A$45.2m for FY23. R&D costs were A$16.1m (versus A$9.0m in Q3) or A$47.0m for FY23, and were attributed to recruitment initiatives and new site identification for the PARA_OA_002 trial, analytical activities for the PARA_OA_008 trial as well as the canine model studies of naturally occurring osteoarthritis (OA), and clinical activities assessing iPPS for mucopolysaccharidosis (MPS) types I and VI. The full year figures were partially offset by a A$7.4m R&D tax incentive rebate (reported in Q223). Paradigm reported a cash balance of A$56.4m at end-June 2023 (versus A$73.2m at end-March 2023). Assuming the cash burn rate remains at the FY23 level of A$45m, the company should have sufficient funds to bring it through near-term key inflection points, as described below.

• Rio Tinto reported a decent quarter, with consecutive operational improvements and the successful start of underground production at Oyu Tolgoi.
• Commodity prices and the energy transition influenced financial performance, with a strategic focus on strengthening their aluminum business and expecting significant returns from Oyu Tolgoi.
• Rio Tinto also recently expanded scandium production with the acquisition of the Platina Scandium Project.