In today’s briefing:
- ANZ to Acquire Suncorp Bank: Equity Raise & Regulatory Approvals
- Index Rebalance & ETF Flow Recap: TW Div+, TPX, KOSPI2, KQ150, NIFTY100, ASX200, CPSE, HFCAA, HDFCB
- ANZ Bank (ANZ AU) Nixes MYOB, Yeas SunCorp Bank, To Raise A$3.5bn of Equity
- GSK Spinoff Haleon (HLN UK) Is Biggest New Euro Listing In 10yrs – Index Implications and Overhang
- ANZ Renounceable Entitlement Offer – Dilute Now, Accrete Later. Still Appears Better than MYOB
- Korea’s New SSF/SSO Listing on July 25 & LG Energy’s Massive Lockup Release on July 27
- SOHO China (410 HK): Still Toxic
- Tianqi Lithium: Upcoming Events & AH Premium
- LG Energy IPO Lock-Up – Largest Lockup Release of the Lot at US$3bn
- Hong Kong CEO & Director Dealings – 18th July 2022
ANZ to Acquire Suncorp Bank: Equity Raise & Regulatory Approvals
- Australia and New Zealand Banking Group (ANZ) (ANZ AU) has announced that it is acquiring Suncorp Bank from Suncorp (SUN AU) for an all cash consideration of A$4.9bn.
- ANZ will fund the Suncorp Bank acquisition by a fully underwritten 1:15 pro rata accelerated renounceable entitlement offer to raise A$3.5bn at A$18.9/share, a 12% discount to TERP.
- A small increase in the Herfindahl-Hirschman Index (HHI) for the mortgage lending market will make it difficult for ACCC to deny approval for the acquisition.
Index Rebalance & ETF Flow Recap: TW Div+, TPX, KOSPI2, KQ150, NIFTY100, ASX200, CPSE, HFCAA, HDFCB
- The FTSE TWSE Taiwan Dividend+ Index is interesting since there are multiple moving parts and is not widely tracked. We take an early look at potential changes in December.
- West African Resources (WAF AU) will replace Uniti Group Ltd (UWL AU) in the S&P/ASX 200 (AS51 INDEX) at the close of trading on 21 July.
- There have been some large inflows to the Vanguard FTSE Pacific ETF (VPL US) in the last few weeks.
ANZ Bank (ANZ AU) Nixes MYOB, Yeas SunCorp Bank, To Raise A$3.5bn of Equity
- Australia and New Zealand Banking Group (ANZ) (ANZ AU) this morning made a flurry of announcements. First and foremost, ANZ withdrew from discussions on MYOB.
- Q3 earnings ended 30 June saw revenue +5%, lending up 3%yoy, markets revenue +7%, NIM up 3bp (rising rates helps). Basel3 APRA Level2/Level1 CET1 Ratios were 11.1%/10.4%.
- But the big news: ANZ is buying SunCorp Bank from SunCorp (SUN AU) for A$4.9bn (1.3x NTA), and will raise A$3.5bn through a 1 for 15 renounceable rights offering.
GSK Spinoff Haleon (HLN UK) Is Biggest New Euro Listing In 10yrs – Index Implications and Overhang
- GlaxoSmithKline PLC (GSK LN) shareholders on 6 July overwhelmingly approved the long-awaited demerger of its GSK Consumer Healthcare unit newly-named Haleon (HLN LN) earlier this month.
- While not originally universally-desired (Elliott wanted a sale), it was overwhelmingly approved. Haleon lists Monday 18 July with a £40+bn valuation resulting in FTSE 100 and Stoxx Europe 600 changes.
- GSK investors get 1 share of Haleon for every share of GSK held. Post-demerger, the public owns 55%, Pfizer ~32%, GSK ~13%. Lockup ends 10 November. There will be overhang.
ANZ Renounceable Entitlement Offer – Dilute Now, Accrete Later. Still Appears Better than MYOB
- ANZ aims to raise around US$2.4bn (A$3.5bn) via a renounceable entitlement offer to part fund the purchase of Suncorp Bank.
- In our view, neither the fundraising nor the acquisition appear to be particularly well flagged. ANZ’s withdrawal from MYOB talks might be the most positive thing about the announcement.
- In this note, we will talk about the deal dynamics and run the deal through our ECM framework.
Korea’s New SSF/SSO Listing on July 25 & LG Energy’s Massive Lockup Release on July 27
- The KRX will list 20 new single stock futures (SSF) and 5 single stock options (SSO) next Monday, July 25, including LG Energy Solution (373220 KS).
- It seems very probable that the replacement demand for futures (short) will increase substantially due to a possible saturation of the loan market.
- This situation, coupled with local pensions’ basis trading, can lead to a significantly distorted basis. We should do basis trading or play pair trading (with LG Chem) on this.
SOHO China (410 HK): Still Toxic
- Ten months after China’s SAMR torpedoed Blackstone’s Offer, SOHO China (410 HK) has fallen 61%. Its portfolio of high-quality properties are currently trading at 0.2x P/B.
- Recent woes concern electricity price violations, tax evasion, and now an investigation into CFO Ni Kuiyang’s alleged insider trading.
- SOHO is trading cheap on a standalone basis; and to peers. This is still not a good reason to get involved.
Tianqi Lithium: Upcoming Events & AH Premium
- Tianqi Lithium (002466 CH) trades at an 84% premium to Tianqi Lithium (9696 HK) and the AH premium has been volatile since listing.
- Tianqi Lithium (002466 CH)‘s potential inclusion in the MSCI China and FTSE All-World Index could keep the AH premium at a higher level as compared to its peers.
- Tianqi Lithium (9696 HK)‘s inclusion to Southbound Stock Connect in August and potential inclusion to the MSCI and FTSE indices will help keep a lid on the AH premium.
LG Energy IPO Lock-Up – Largest Lockup Release of the Lot at US$3bn
- LG Energy Solution (LGES) raised US$10.8bn in its South Korea IPO. The stock was listed on 27th Jan 22. Its six-month lockup is set to expire soon.
- LGES is the EV battery unit of LG Chem. The company is a major supplier to customers including Tesla and General Motors.
- In this note, we will talk about the lock-up dynamics and updates since our last note.
Hong Kong CEO & Director Dealings – 18th July 2022
- The data in this insight is collated from the “shareholding disclosure” link on the HKEx website.
- Often there is a corresponding HKEx announcement on the increase – or decrease – in the shareholding by directors. However, such disclosures are by no means an absolute.
- These insights also flags those companies where shares have been pledged, both recently and ongoing.
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