In today’s briefing:
- Merger Arb Mondays (21 Nov) – Halcyon, Lifestyle, OZ Minerals, Perpetual/Pendal, Nearmap, Nitro
- Selamat Sempurna (SMSM IJ) – Filters and Radiators Leading the Recovery
- Despature Family/Somfy: Lowball Simplified Takeout, Timetable
Merger Arb Mondays (21 Nov) – Halcyon, Lifestyle, OZ Minerals, Perpetual/Pendal, Nearmap, Nitro
- We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
- Highest spreads 21Vianet Group (VNET US), Alliance Aviation Services (AQZ AU), Genex Power Ltd (GNX AU), Golden Energy & Resources (GER SP), 111 Inc (YI US), Perpetual Ltd (PPT AU).
- Lowest spreads – Tyro Payments (TYR AU), Warrego Energy (WGO AU), Jinke Smart Services (9666 HK), Nitro Software Ltd (NTO AU), Uzabase Inc (3966 JP), PTB Group Ltd (PTB AU).
Selamat Sempurna (SMSM IJ) – Filters and Radiators Leading the Recovery
- Selamat Sempurna (SMSM IJ) remains one of the best quality Indonesian industrial companies, as the leading auto and heavy equipment filter producers for both OEM and the aftermarket.
- The company booked a strong set of 9M2022 results, with sales up +21% YoY and net profit increasing +30% YoY, driven by both domestic and export markets.
- Selamat Sempurna (SMSM IJ) maintains it FY2022 target for 15% sales and profits growth for FY2022, which looks conservative after the performance at 9M stage despite potential global headwinds.
Despature Family/Somfy: Lowball Simplified Takeout, Timetable
- Majority shareholders Despatures (73.9%) plan to use the abundant cash holdings of Somfy to finance a simplified cash offer at €143/share (16.8x EV/23e EBIT, 21.1x P/23e E, 20.6% premium).
- In case of squeeze-out, Somfy intends to distribute afterwards an extraordinary dividend up to €620m (source: draft memo). The market believes the offer is low (gross spread is +0.98%).
- I believe there are grounds for an offer sweetening (base-case valuation throws €150.98/share) and the risk-reward seems favorable considering a very motivated (and opportunistic) buyer. Long.
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