In today’s briefing:
- Origin/Brookfield: ACCC Rubber Stamped. Now Shareholders Will Have Their Say
- Origin Energy (ORG AU): ACCC Approves, Shareholders Justifiably Want a Bump
- CMB/Euronav: Mandatory Offer
- Packaging Corporation of America: Uncovering the Strategies Behind Efficient Operations! – Major Drivers
Origin/Brookfield: ACCC Rubber Stamped. Now Shareholders Will Have Their Say
- Brookfield Asset Management/MidOcean Energy’s tilt for Origin Energy (ORG AU), faced two major hurdles.
- The first was ACCC approval. Not just over competition issues, but also the perceived/apparent public benefit from Brookfield’s future commitment to renewable generation. ACCC has now cleared the transaction.
- The second is currying favour with shareholders, several of whom, including AustralianSuper (13.68% stake), reckon the Offer is substantially below long-term value. This needs a bump.
Origin Energy (ORG AU): ACCC Approves, Shareholders Justifiably Want a Bump
- The ACCC has approved Brookfield/EIG’s proposed acquisition of Origin Energy (ORG AU). The Brookfield/EIG offer is A$5.78 and US$2.19 per share, worth A$8.83 at the last close.
- The bidders now face the challenge of convincing shareholders to accept the offer and avoid incurring ticking fees. The scheme booklet will be despatched in the coming weeks.
- Several shareholders have justifiably argued that the offer is light. Our SoTP valuation is A$9.46 per share, 7.1% above the implied offer price of A$8.83.
CMB/Euronav: Mandatory Offer
- CMB and Frontline Ltd (FRO US) smoke the peace pipe: CMB will buy Frontline out of Euronav NV (EURN US) at $18.43/share (25% premium) and agree to Euronav selling 24 VLCCs to FRO.
- After an EGM gives the green light, CMB will launch a mandatory $18.43/share cash offer for Euronav. The three-way transaction is fairly priced (1.0x P/NAV) for all players, including the Euronav minorities.
- There shouldn’t be any antitrust issues. Spread is 4.02%/7.66% (gross/annualised assuming settlement by 30 April 2024). Recommendation is long and tender (there won’t be any squeeze-out).
Packaging Corporation of America: Uncovering the Strategies Behind Efficient Operations! – Major Drivers
- Packaging Corporation of America delivered a mixed set of results in its most recent results, with revenues falling short of Wall Street expectations but above-par earnings.
- Packaging Corporation reported a net income of $203 million in the second quarter.
- In this report, we have carried out a fundamental analysis of the historical financial statements of the company.
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