In today’s briefing:
- MBK Rules Out Further Tender Price Hike for Korea Zinc, Game Plans Shift
- Arcadium Lithium (ALTM US/LTM AU): Rio’s Binding Proposal
- Rio Tinto Goes All-In for Arcadium Lithium
- Rio to Fully Pay for Arcadium Lithium
- China Consolidates On Tires With Domestic, Outside Forays
- The Beat Ideas: Vishnu Chemicals- Niche Business with High Growth Levers
- Shiva Pharmachem Pre-IPO – High Borrowings Along with Expansion Plans Leading to Liquidity Concerns
- PetroTal Corp (AIM: PTAL): Production and Cash Well Above Expectations
- Qarbotech secures US$1.5M funding to boost farm yields by 60% | e27
MBK Rules Out Further Tender Price Hike for Korea Zinc, Game Plans Shift
- MBK’s strategy is clear: they believe they have the upper hand with the current price level and are optimistic about a favorable ruling on the second injunction.
- All eyes are on Choi to raise the price by this Friday, the 11th, before the deadline, especially with the FSS’s scrutiny looming.
- If that happens, MBK will likely go all-in on the second injunction whose hearing is on the 18th. Choi raising the price this Friday won’t significantly boost Korea Zinc’s stock.
Arcadium Lithium (ALTM US/LTM AU): Rio’s Binding Proposal
- Arcadium Lithium (LTM AU) has disclosed a binding offer from Rio Tinto PLC (RIO LN) at US$5.85 per share, a 90% premium to the undisturbed price of US$3.08 (4 October).
- The offer is attractive compared to analyst price targets and peer multiples but unattractive compared to cyclical low timing and precedent transactions.
- The shareholder structure requires an activist to disrupt the vote. The long-dated offer provides optionality on a bump if lithium prices materially re-rates.
Rio Tinto Goes All-In for Arcadium Lithium
- Late last evening, Rio Tinto Ltd (RIO AU) and Arcadium Lithium (LTM AU) announced a definitive agreement where Rio will acquire Arcadium for US$5.85/share in cash.
- Arcadium Lithium (ALTM US) closed nearly 31% higher at US$5.55/share and Arcadium Lithium (LTM AU) should follow when the stock opens.
- Arcadium Lithium (LTM AU) could move around 40% higher today to catch up with Arcadium Lithium (ALTM US) – that would still leave a 5.4% spread to the offer price.
Rio to Fully Pay for Arcadium Lithium
- On October 9, Rio Tinto agreed to acquire Arcadium Lithium through a Jersey scheme of arrangement for $5.85/share, a 90% premium, valuing Arcadium’s diluted share capital at $6.7 billion.
- As of October 4, Arcadium shares on the NYSE had fallen by approximately 54.1% since listing. Rio Tinto is taking advantage of low lithium prices to acquire high-quality lithium assets.
- The offer price is generous: 17.3x 25e EBITDA vs. closest comparable Albemarle Corp (ALB US) at 12.2x 25e EBITDA. Gross spread is 5.1%. I set my PT at $5.85. Long.
China Consolidates On Tires With Domestic, Outside Forays
- Huaqing Petroleum to set up plant worth US$1.39 billion in Hunan
- Linglong commences serial production at its Serbia plant
- ZC Rubber Group cements network for supply to Nordic countries
The Beat Ideas: Vishnu Chemicals- Niche Business with High Growth Levers
- Vishnu Chemicals (VCL IN) is now backward integrated with the soda ash, CO2 Gas plant and ore requirement to overcome the challenge of raw material price volatility.
- Company operated in niche & specialty chemical segment and will launch detailed capex plan in Q2 for forward integration.
- Management aims to consolidate EBITDA margins around 17.5%-18% by year-end, with a target of achieving consistent margins at 20% over the next 2-3 years.
Shiva Pharmachem Pre-IPO – High Borrowings Along with Expansion Plans Leading to Liquidity Concerns
- Shiva Pharmachem Limited (9155347Z IN) is looking to raise around US$110m in its India IPO.
- It is a manufacturer in the Indian specialty chemicals business and was the largest manufacturer of acid and alkyl chlorides by volume in CY22 in India, as per Frost&Sullivan .
- In this note, we talk about the company’s historical performance.
PetroTal Corp (AIM: PTAL): Production and Cash Well Above Expectations
- 3Q24 production was 15,160 bbl/d. This is well above expectations of 13 mbbl/d.
- While the river levels were at record lows, PetroTal has maximized the barge fleet capacity during the quarter.
- Production during the first week of October was 10.7 mbbl/d. With the end of the dry season in sight, production is expected to return to capacity by mid-November,
Qarbotech secures US$1.5M funding to boost farm yields by 60% | e27
- Qarbotech, a Malaysian startup that enhances photosynthesis via advanced carbon quantum dots material, has raised US$1.5 million in funding from 500 Global, Better Bite Ventures, ID Capital, EQT Foundation, and Epic Angels Limited.
- The seed extension round will enable Qarbotech to scale its operations in Malaysia, Indonesia, Thailand, and Vietnam, where demand for advanced agritech solutions is surging.
- “This investment will allow us to ramp up production and bring our patented solutions to more farmers across the region, empowering them to produce more with less environmental impact,” said Amirul Merican, COO of Qarbotech.
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