Daily Brief Event-Driven: 7&I (3382) Update – Couche-Tard Responds and more

• On 10 March, Alimentation Couche-Tard (ATD CN) issued a release “UPDATE ON PROPOSAL FOR A COMBINATION WITH SEVEN & i“.
• They felt obliged to be transparent in the wake of the 7&i Letter To Shareholders released yesterday. The content/nuance of the two letters differ significantly. 
• Two parties competing to get a truth which cannot be both could be problematic. We are still many months away from any kind of ACT/7-11 deal.

• When the Starwood/Warburg Pincus Consortium announced a firm offer on the 4th December, it was pre-conditional on a raft of regulatory approvals from no less than eight countries/jurisdictions. 
• We’re half way there, with four approvals now squared away, leaving Australia, China, Hong Kong and New Zealand still to give the go ahead. 
• Irrevocables comprising 34.26% of the register (and 57.01% of disinterested shares) are now in the bag. This is a done deal. It’s just a question of timing.

• In late November of 2024, Baudroie (4413 JP) announced it would try to move to TSE Prime and that day they announced a 2.76mm share secondary offering and a buyback.
• The buyback was a bit less than a quarter of the offering. Fast forward 3mos and in early March the company announced it would move to Prime. Yesterday it did.
• That puts the company in line for a TOPIX inclusion in end-April , and likely other index effects later. In the meantime, earnings and guidance are out ~10 April. 

• Local instos borrow from brokers or peers, KSD collects and cleans the data, then KOFIA reports stock borrow balances daily with a two-day lag.
• Offshore borrows via EquiLend or PB deals don’t show up—KSD reporting only covers local institution-to-institution stock loans.
• Assume 60% of reported borrow balance is real shortable ammo—adjusting for this helps filter out noise in short positioning.

• Oryx Global Partners teams up with former Kenmare Resources MD Michael Carville for takeover bid
• Kenmare Resources operates moma titanium mine in Mozambique, one of the world’s largest producers
• Weak mineral sands market and political upheaval in Mozambique impact company’s operations and valuation, leading to potential takeover bid

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• The De Grey Mining (DEG AU) IE considers Northern Star Resources (NST AU)’s offer fair and reasonable. The offer is 0.119 NST shares per DEG share.
• The key condition is DEG shareholder approval. Due to the lack of a competing bid, Gold Road Resources (GOR AU), which holds a potentially blocking stake, should support it.
• The offer is attractive compared to historical trading ranges. At the last close and for a 5 May payment, the gross/annualised spread is 2.4%/18.2%.

• Back on the 2nd Dec 2024, De Grey Mining (DEG AU), which boasts one of Australia’s largest undeveloped gold projects, announced a merger with Northern Star Resources (NST AU).
• Northern Star offered 0.119 new shares for every De Grey share, and will hold ~80.1% of the combined entity upon a successful Scheme, with De Grey shareholders the remaining ~19.9%.
• The Scheme Booklet is now out, with a Scheme Meeting on the 16th April. Expected implementation on the 5th May. The IE (KPMG) says fair & reasonable.