Daily Brief Financials: PNB Housing Finance Ltd, QV Equities Ltd, Banco De Sabadell SA, China Vanke , Deutsche Beteiligungs AG and more

• Impending block deals which generally create supply over-hang on the stock leads to a negative impact on the stock. 
• These block deals generally include selling promoters and big funds at a price discount to its current market price. 
• Historically, such events suggest once the block deal is done; stock reacts positively creating a Special Situation Opportunity

• On the 12th March, Aussie-based investment plays QV Equities Ltd (QVE AU) and WAM Leaders Ltd (WLE AU)  entered into a Scheme. 
• The current scrip terms are 0.739 new WAM shares per QVE share; OR A$0.989/share cash. Terms will be adjusted for updated pre-tax NTA/shares of both companies after the Scheme Meeting. 
• The Scheme Booklet is now out, with a Scheme Meeting to be held on the 28th June. Expected implementation on the 15 July. The IE says fair & reasonable.

• On 24 May, Banco Bilbao Vizcaya Argentari (BBVA SM) submitted the authorisation request for its all-stock offer for Banco De Sabadell SA (SAB SM). Closing expected to take 6-8 months.
• Gross spread (CSP 27 May) is 7.6%, which This translates in a 52% implied probability of deal success. The fixed income market appears to share this view.
• Nevertheless, from a long-only perspective, the risk/reward of Sabadell is interesting. The deal values Sabadell’s shares at €2.07 each, an implied equity value of €11,187 million, for a 0.92 P/TBV.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• China Vanke

Deutsche Beteiligungs (DBAG) reported an NAV total return of 3% in H124 (to March 2024) following the first-time recognition of 2024 portfolio company budgets and 2024 consensus forecasts for peers in Q124. Its H124 return includes a net €19m negative effect from the incorporation of additional portfolio valuation factors. DBAG’s H124 performance was supported by the successful sale of in-tech at a healthy 3.2x multiple on invested capital (MOIC). DBAG also closed the initial investment in a 51% stake in ELF Capital. Its shares now trade at a c 22% discount to NAV.