In today’s briefing:
- JFE Holdings (5411) Stock+CB Offering
- Mergers, Acquisitions and Potential S&P/ASX Index Ad Hoc Inclusions
- JFE Holdings Placement – Well Flagged, but Would Probably Need a Wider Correction
- Orora Limited Placement – Large Deal to Digest, Although Seems Well Flagged and Accretive
- EDG: Eagle Zone Extended a Further 125m
JFE Holdings (5411) Stock+CB Offering
- Today JFE Holdings (5411 JP) announced it would raise ~JPY 121bn in an equity offering of 55mm treasury shares and JPY 90bn in a Convertible Bond offering.
- ¥125bn will be spent on capex for expansion, ¥75bn for capex, investments, and R&D related to decarbonisation, as well as repayment of debt to 2028.
- This is a heavier than a “normal” equity offering. And recent large-ish equity offerings seem to have more volatility in outcome (post-offer overhang, or squeeze) than previous years.
Mergers, Acquisitions and Potential S&P/ASX Index Ad Hoc Inclusions
- There are a bunch of stocks that are constituents of the S&P/ASX family of indices and could go private or merge prior to the next scheduled rebalance in December.
- That will lead to ad hoc inclusions for the S&P/ASX 200 (AS51 INDEX) and could also lead to ad hoc inclusions for the S&P/ASX 50 and S&P/ASX 100 indices.
- There is a fair amount of short interest on some of the potential inclusions and short covering due to index inclusion could take the stocks higher.
JFE Holdings Placement – Well Flagged, but Would Probably Need a Wider Correction
- JFE Holdings (5411 JP) is looking to raise around US$870m to fund its capacity expansion plans. Together with the offering, it will undertake a US$610m CB issuance.
- The deal appears to be well flagged with the firm disclosing its JV and other related CapEx plans in its earlier earnings announcement.
- Overall, the new shares would result in a 8.2% dilution and represent 12 days of three month ADV.
Orora Limited Placement – Large Deal to Digest, Although Seems Well Flagged and Accretive
- Orora Ltd (ORA AU) is looking to raise A$1,345m (~US$870m) via a primary placement and an entitlement offer to partially fund its acquisition of Saverglass.
- While the exact size/target of an acquisition wasn’t explicitly mentioned earlier, the firm had discussed its potential use of M&A to grow its North American/Europe regions.
- Including the entitlement offer, the deal would represent 212 days of three month ADV and add 58.9% to the firm’s total shares outstanding.
EDG: Eagle Zone Extended a Further 125m
- EDG reported assay results for three drill holes, two at the Eagle Zone and one at the previously undrilled Crown target.
- This morning, Endurance Gold Corporation (EDG:TSXV) announced assay results for three drill holes, two at the Eagle Zone and the first drill hole completed at the Crown target.
- Hole-071 is the first drill hole completed in the Crown area and intersected the northwest extension of the Eagle Zone with 3.81 g/t Au over 3.4m.
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