In today’s briefing:
- US Masters (URF AU): Almost Too Good To Be True
- Lithium Power (LPI AU): Codelco’s Binding Offer at A$0.57
- Cuscal IPO – Peer Comparison & Thoughts on Valuation
- Paradigm Biopharmaceuticals (PAR AU): Positive Result from Phase 2 Trial; Satisfactory Cash Position
US Masters (URF AU): Almost Too Good To Be True
- US Masters Residential Property Fund (URF AU), an ASX-listed real estate trust investing in single-family homes in gentrifying New York metropolitan neighbourhoods – what could go wrong?
- Quite a lot, apparently. Shares are down bigly from the 2011 listing; the responsible entity faced ASIC-backed court proceedings for misleading clients; plus dissent emerged over appointing a new RE.
- URF is gradually offloading its entire portfolio, and buying back shares, which are trading at 0.49x price-to-book. So, where’s the rub?
Lithium Power (LPI AU): Codelco’s Binding Offer at A$0.57
- Lithium Power International (LPI AU) has entered a scheme implementation deed with Corporacion Nacional del Cobre de Chile (Codelco) at A$0.57 per share, a 119.2% premium to the undisturbed price.
- Shareholders representing 32.47% of outstanding shares will vote in favour of the scheme. Forums suggest that retail shareholders are broadly resigned to accepting the offer.
- The offer is conditional on FIRB approval. The scheme meeting will be held on 23 January 2024. At the last close, the gross spread was 7.5%.
Cuscal IPO – Peer Comparison & Thoughts on Valuation
- Cuscal Limited (1229Z AU) is looking to raise US$234m in its upcoming Australia IPO.
- Cuscal is an authorized deposit-taking institution (ADI) in Australia that primarily provides financial infrastructure and payment services in Australia.
- In our previous note we looked at the company’s past performance, in this note we will undertake a peer comparison and share our thoughts on valuation.
Paradigm Biopharmaceuticals (PAR AU): Positive Result from Phase 2 Trial; Satisfactory Cash Position
- Paradigm Biopharmaceuticals (PAR AU) announced phase 2 trial result, demonstrating that lead drug candidate, iPPS treats the symptoms of osteoarthritis as well as preserves and/or regenerates joint tissues.
- This is significant from a commercial perspective because the disease modifying effects of iPPS observed in the phase 2 clinical trial are expected to support a greater reimbursement.
- Paradigm’s cash position was bolstered by A$66M capital raise in Aug’22. As of June 30, 2023, the company has a cash balance of A$56.3M, which should provide runway through Q1FY25.
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