In today’s briefing:
- Liontown Resources Placement – While Discount Is Wide, It Is at a Premium to Its Pre-Takeover Price
- Golden Eagle Energy: Share Sale Done. MTO Price Bumped
- Liontown Resources (LTR AU): State of Play
- Origin/Brookfield: Bump Expected Ahead Of 23 Nov Scheme Meeting
- Vedanta’s Sweet Semiconductor Saga: A Sour Tale of Deception and Governance
- Whitehaven Coal: Great Acquisition, Cash Gone, Now At The Mercy of The Cycle
Liontown Resources Placement – While Discount Is Wide, It Is at a Premium to Its Pre-Takeover Price
- Liontown Resources (LTR AU) is looking to raise A$365m (US$230m) for capital expenditure and to plug its funding gap for the Kathleen Valley Lithium (KVL) project.
- Together, the combined A$1.14bn equity/debt raising comes after Albemarle abandoned its A$6.6bn (US$4.2bn) acquisition bid for Liontown Resources earlier in the week.
- In this note, we will talk about the deal dynamics and run the deal through our ECM framework.
Golden Eagle Energy: Share Sale Done. MTO Price Bumped
- This transaction just keeps on giving. First, you received an additional dividend. Now the Offer price has been increased.
- On the 26 July, Geo Energy Resources (GERL SP) announced an intention to acquire a 58.65% stake in coal miner Golden Eagle Energy (SMMT IJ) (GEE).
- Geo shareholders approved the purchase on the October 13 and the acquisition was completed on the 18 October. This triggered an MTO, which has been revised upward to IDR 1,305.50.
Liontown Resources (LTR AU): State of Play
- Liontown Resources (LTR AU) resumes trading today after announcing a raise of up to A$1.18bn to fully fund the Kathleen Valley Lithium Project to first production and beyond.
- The equity component is up to A$421m and the placement price of A$1.8/share is a 35.5% discount to the last close.
- The placement price is higher than the stock price prior to the Albemarle Corp (ALB US) offer and during a period when its peers have performed poorly.
Origin/Brookfield: Bump Expected Ahead Of 23 Nov Scheme Meeting
- On 20th October, the ACCC cleared Brookfield to take over Origin Energy (ORG AU).
- The transaction still needs shareholder approval and AustralianSuper with its too-big-to-ignore 13.68% stake reckons terms are below long-term value.
- The Scheme Booklet is out with a 23 November Scheme Meeting. The IE backs out a fair value range of $8.45-$9.48/share, but as at June 30. A bump is imminent.
Vedanta’s Sweet Semiconductor Saga: A Sour Tale of Deception and Governance
- The investigative analysis highlights a deceptive and confusing saga involving the Vedanta Group’s semiconductor venture in India.
- The group skillfully blurred the lines between Vedanta Ltd (VEDL IN) and Vedanta Resources (VED LN), creating an impression that the semiconductor business was under Vedanta Limited, despite previous clarifications.
- Eventually, regulatory authorities penalized Vedanta for disclosure lapses, exposing governance concerns and a lack of transparency in this complex corporate maneuver.
Whitehaven Coal: Great Acquisition, Cash Gone, Now At The Mercy of The Cycle
- We listened to the conference call held by Whitehaven Coal (WHC AU) to update investors on its acquisition of BHP’s coking coal mines and Q2 2024 production.
- Based on spot prices of coking coal over 350 USD/ton and cash costs of 20% lower than the average of 2 years, the EV-EBITDA of acquisition is 1.8x
- The acquisition could be massively accretive if coking coal prices remain stronger for longer as the company pivots its strategy to becoming a large met coal producer.
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