In today’s briefing:
- HDFC/HDFC Bank Mega Merger: Foreign Selling Leads to Higher Foreign Room
- StubWorld: Astra Trading Cheap. So Is United Tractor
- Euro Stoxx 50 Quiddity Leaderboard for Sep 22: Eurozone’s Annual Big Impact Rebal Trades
- Bridgetown Holdings Considering a Potential Merger with Circles.Life
- MergerTalk: Healthcare Realty/ HealthCare Trust – Short-Term Risk-Arb Opportunity
HDFC/HDFC Bank Mega Merger: Foreign Selling Leads to Higher Foreign Room
- Foreign selling has continued on HDFC Limited (HDFC IN) and HDFC Bank (HDFCB IN) and foreign room on the proforma merged entity is 17.23%.
- Higher than 15% foreign room will require passive MSCI trackers to buy 209m shares (US$4.05bn) of HDFC Bank (HDFCB IN) at the time of merger implementation.
- If foreign selling continues and foreign room on the merged entity exceeds 20%, there will be buying from passive FTSE trackers as well.
StubWorld: Astra Trading Cheap. So Is United Tractor
- Astra International (ASII IJ) is coming up cheap after United Tractors (UNTR IJ) positively responded to its large share buyback announcement. Yet both companies are looking attractive here.
- Preceding my comments on Astra and United Tractor are the current setup/unwind tables for Asia-Pacific Holdcos.
- These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.
Euro Stoxx 50 Quiddity Leaderboard for Sep 22: Eurozone’s Annual Big Impact Rebal Trades
- The EURO STOXX 50 Index is one of the most highly-tracked indices in mainland Europe and the annual index review takes place in September.
- Historically, these Rebalance events have had significant volume impact and they generally involve large cap names.
- In this insight, we take a look the names leading the race to become ADDs/DELs for the upcoming index review in September 2022.
Bridgetown Holdings Considering a Potential Merger with Circles.Life
- Bridgetown Holdings, a SPAC backed by Peter Thiel and Richard Li, is considering a potential merger with Singapore’s virtual telco Circles.Life (merger valuation could range US$1.5 billion to US$2.5 billion).
- All in all, the valuation range of the proposed M&A merger of Bridgetown Holdings and Circles.Life needs to be reduced substantially, in order to generate more interest in this deal.
- Otherwise, there is likely to be weak demand for this merger deal. In addition, the market environment for SPAC related M&A deals have deteriorated significantly in the past 6-12 months.
MergerTalk: Healthcare Realty/ HealthCare Trust – Short-Term Risk-Arb Opportunity
- The Healthcare Realty Trust (HR US) / Healthcare Trust Of America (HTA US) transaction is heading towards climax with the critical HR and HTA shareholder votes set for July 15
- The odds are that activist investor and HR shareholder will not succeed in derailing the deal which it opposes from closing on July 20
- Notwithstanding the significant spread compression seen in recent weeks, there remains an attractive short-term opportunity for the arbs
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