In today’s briefing:
- Solactive Global Uranium & Nuclear Components Index Rebalance: Most Adds in Oz
- S&P/ASX Indices: Quiddity Primer
- KKR/Accell NV: Recommended Cash Offer
- What’s Working on the Short Side?
- Advent & CenterBridge/Aareal Bank AG: “Best and Final” Offer
Solactive Global Uranium & Nuclear Components Index Rebalance: Most Adds in Oz
- Solactive has announced the constituent changes for the Global Uranium & Nuclear Components Index. There are 8 adds and 1 delete with implementation at the close on 4 February.
- Prior to the rebalance, BHP Billiton (BLT LN) will be deleted at the close on 28 January following Unification with BHP Group (BHP AU).
- The flows on the stocks are small, but there is a big impact on the inclusions in Australia. Global X Uranium ETF (URA US) will buy around 5.5% of float.
S&P/ASX Indices: Quiddity Primer
- The S&P/ASX Index family is a widely-tracked group of indices and sub-indices which represent the performance of ASX-listed companies.
- In this insight, we take a brief look at the constituent selection methodology for the capitalization-weighted indices which include ASX 300, ASX 200, ASX 100, ASX 50, and ASX 20.
- There is also a discussion on the historical price performance of Index Rebalance Events in the run up to the Inclusion Event and in the Post-Inclusion Phase.
KKR/Accell NV: Recommended Cash Offer
- The 25% premium, €58/share offer implies an equity value of €1,556.5mn and EV of €1,712mn, which represents 12.4x EV/Fwd EBITDA (vs. 12.2x EV/LTM EBITDA comparable transactions) and 18.3x Fwd P/E.
- Minimum acceptance level of at least 95%, automatically adjusted to 80% in case GM approves it. The offeror intends to squeeze-out/delist as soon as practicable.
- Median implied share price across multiples is €56.37/share. On this basis, the offer price seems full. Gross spread is 0.34%, a bit tight. The market does not expect any counteroffer.
What’s Working on the Short Side?
- We normally write a “What’s Working in Equities” report at the end of every month.
- Today, we publish a “What’s not working” a/k/a “What’s working on the short side.”
- In one line, what’s working on the short side are expensive, smaller cap, unprofitable, growth stocks.
Advent & CenterBridge/Aareal Bank AG: “Best and Final” Offer
- On 26 January, the consortium offered a “best and final” offer of €31/share, a 6.9% increase vs. the initial one. Minimum acceptance threshold is 60%. Offer extended till 2 February.
- Petrus and Teleios (together hold c.21% stake) consider the new offer to be a lousy deal for shareholders, mainly because of diverging views over the value of Software unit Aareon.
- A 11.5% gross spread, among the highest in the European space, reflects uncertainty about the final outcome. The 2022e dividend yield is 5.2% (Capital IQ consensus). Speculative buy.
Before it’s here, it’s on Smartkarma
