In today’s briefing:
- Atlas Arteria Placement – How to Lose Friends and Alienate Your Largest Shareholder
- SET50 Index Rebalance Preview: Three Potential Changes in December
- Atlas Arteria (ALX AU): Acquisition, ANREO & ASX50 Inclusion
- Ramsay’s Bait-And-Switch KKR Offer Heads for the Exit
- VNET: Management’s Low-Balled Non-Binding Proposal
- Moya Holding’s S$0.092 Delisting Offer
- Moya Holdings: Anthoni Salim’s Exit Offer
- Australia: S&P/ASX, FTSE, REMX, GDXJ Flows This Friday
- NTT (9432) Buyback Has Come – But NTT Is Gonna Grind Out Better EPS So I’d Keep It
- EQD | Volkswagen (VOW3 GY): Porsche IPO Could Unlock Value-We Look at the Best Derivative Trades
Atlas Arteria Placement – How to Lose Friends and Alienate Your Largest Shareholder
- Atlas Arteria (ALX) aims to raise around US$2bn (A$3bn) via a non-renounceable entitlement offer to fund the purchase of its majority interest in Chicago Skyway.
- Over the past few months, ALX has garnered interest from IFM which has increased its stake to 19.99%. IFM had publicly opposed this acquisition.
- In this note, we will talk about the deal dynamic and run the deal through our ECM framework.
SET50 Index Rebalance Preview: Three Potential Changes in December
- The market cap review period for the December rebalance of the Stock Exchange of Thailand SET 50 Index (SET50 INDEX) started on 1 September and will end 30 November.
- We currently see one high probability change and two lower probability changes to the index at the upcoming rebalance.
- There are a couple of lower probability adds/deletes that will have between 3-5 days of ADV to trade from passive funds and could be interesting from a trading angle.
Atlas Arteria (ALX AU): Acquisition, ANREO & ASX50 Inclusion
- Atlas Arteria (ALX AU) is acquiring 66.67% in Skyway Concession Company LLC, the concessionaire of the Chicago Skyway for an equity value of US$2.013bn (A$3.098bn).
- The acquisition will be funded by a fully underwritten 1:1.95 ANREO to raise A$3.098bn. The offer price of A$6.3/share is a 13.7% discount to TERP and 19.3% discount to last.
- The increase in market cap could result in Atlas Arteria (ALX AU) being added to the S&P/ASX 50 Index at the December rebalance.
Ramsay’s Bait-And-Switch KKR Offer Heads for the Exit
- KKR cannot improve the terms of its offer but left the door open by stating that a deal can be quickly closed if the Board is willing to reset expectations.
- The transaction is stuck in an impasse as Ramsay Health Care (RHC AU) will not recommend KKR’s offer until it is improved, and KKR says it cannot improve terms.
- The peers’ shares have been, on average, flat since the undisturbed date. The shares are trading slightly below the undisturbed price and are attractive on fundamentals.
VNET: Management’s Low-Balled Non-Binding Proposal
- Back on the 11 April, Chinese internet data center services provider VNET (VNET US) announced a non-binding proposal from Hina Group and Shanghai’s Industrial Bank at an utterly underwhelming US$8.00/ADS.
- Then crickets. A reported tilt from MBK Partners failed to materialise.
- VNET has now announced a preliminary non-binding proposal from founder Josh Sheng Chen, at a similarly underwhelming price of US$8.20/ADS.
Moya Holding’s S$0.092 Delisting Offer
- Moya Holdings Asia (MHAL SP) received a delisting proposal from Tamaris Infrastructure (a 72.84% shareholder) at S$0.092 per share, a 41.5% premium to the undisturbed price (8 September).
- The key condition is shareholder approval. Gateway Partners, which holds a blocking stake, will likely use the offer as an opportunity to exit an underperforming investment.
- The offer price is attractive. At the last close price, the gross and annualised spread for a year-end effective date is 3.4% and 11.5%, respectively.
Moya Holdings: Anthoni Salim’s Exit Offer
- Indonesian water treatment play Moya Holdings Asia (MHAL SP) has announced an Exit Offer from Tamaris Infrastructure, an Anthoni Salim-controlled entity.
- The Offer price is S$0.092/share, a 41.5% premium to last close. The Offer price will not be increased.
- The Offer requires approval from 75% of disinterested shareholders. Tamaris and its concert parties hold 72.84%.
Australia: S&P/ASX, FTSE, REMX, GDXJ Flows This Friday
- Changes to the S&P/ASX indices, FTSE All-World/All-Cap, VanEck Vectors Rare Earth/Strategic Metals (REMX US) and VanEck Vectors Junior Gold Miners (GDXJ US) will be implemented at the close on Friday.
- There are quite a few stocks that have over 5 days of ADV to trade from passive trackers. Pre-positions will be built up on a lot of names.
- Short interest has increased on a lot of additions/upweights and decreased on the deletions/downweights.
NTT (9432) Buyback Has Come – But NTT Is Gonna Grind Out Better EPS So I’d Keep It
- NTT announced a buyback in May as discussed in NTT (9432) – Salutary Earnings Salutary Buyback, More to Go, via ToSTNeT-3 to buy a chunk of the govt’s stake.
- That will be executed by ToSTNeT-3 buyback pre-open tomorrow, with a bid of 103.1725mm shares at ¥3,877. A separate report suggests the Ministry of Finance will sell 92mm shares.
- It is like a mini tender offer so if you want to sell a large chunk of shares, you can. But I wouldn’t.
EQD | Volkswagen (VOW3 GY): Porsche IPO Could Unlock Value-We Look at the Best Derivative Trades
- Volkswagen are planning to IPO Porsche in order to address company valuation and to raise funds to further expand into the EV market.
- The stock looks attractive on a valuation basis and the company has the potential to transform and future proof the business and gain a more favourable P/E ratio.
- We look at the Derivatives Market for the best risk reward strategies.
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