Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

HK Type 4 license through Ballingal Investment Advisors Ltd. 

I'm a highly experienced sell-side analyst with in excess of 22 years of covering Asia Pacific equities, the past 19 years immersed in event strategies encompassing M&A risk arbitrage, directional long/short, stub trades and restructuring.  

My background also includes accountancy (liquidation/bankruptcy/receivership) earlier in my career and as a chief financial officer of a global commodity company based in the US and Mexico.

Pan-Asia Catalysts/Events

Nutrien's Move On Ruralco Makes Agronomic Sense

ACCC Raises Concerns With Ruralco/Nutrien

An Elders/AIRR Merger Re-Focuses ACCC on Ruralco/Nutrien

Quiddity Advisors

Event-Driven

On the 27 February this year, <a href="https://www.smartkarma.com/entities/4285" target="_blank" data-smartkarma-citation="entities:4285:1" rel="noopener">Ruralco Holdings (RHL AU)</a> <a href="https://www.asx.com.au/asxpdf/20190227/pdf/4430v0cv3wwr8q.pdf" target="_blank" rel="noopener">announced</a> it had entered into a Scheme Implementation Deed in which <a href="https://www.smartkarma.com/entities/27261" target="_blank" data-smartkarma-citation="entities:27261:1" rel="noopener">Nutrien Ltd (NTR CN)</a> had agreed to take Ruralco private at $4.40/share - a 44% premium to last close and the one-month VWAP. The Scheme was subject to shareholder approval, and approval from the ACCC and FIRB. 
The ACCC <a href="https://www.accc.gov.au/media-release/accc-to-not-oppose-ruralcos-proposed-acquisition-of-elders-rural-services" target="_blank" rel="noopener">did not oppose</a> Ruralco's proposed acquisition of <a href="https://www.smartkarma.com/entities/elders-ltd" target="_blank" data-smartkarma-citation="entities:10040:1" rel="noopener">Elders Ltd (ELD AU)</a> back in May 2013. ACCC's chairman said at the time the combined rural services retail networks of the merger parties would be constrained by alternative retail suppliers of agri-products located nearby.
Ruralco and Elders are the No.1 &amp; 2 players, with Nutrien's Landmark third. If there was no issue with Ruralco &amp; Elders combining, there should have been no issue with Ruralco and Nutrien/Landmark teaming up.
On the 13 June, the ACCC <a href="https://www.accc.gov.au/system/files/public-registers/documents/Landmark%20Ruralco%20-%20SOI%20-%2013%20June%202019.pdf" target="_blank" rel="noopener">announced</a> its Statement of Issues (SOI), raising preliminary competition concerns. The key issue centers on merchandising and the dilution of competition from this transaction. The ACCC had fewer concerns over the amalgamated impact on the agency businesses.
The ACCC's concerns were not definitive nor strongly worded, therefore the possibility of a formal clearance remained. But on balance, my read was that there was sufficient weight surrounding merchandising issues such that the divestment of some stores was likely required for this deal to get up. 
To make matters interesting, Elders made an A$187mn scrip/cash (50:50) <a href="https://www.asx.com.au/asxpdf/20190715/pdf/446m5htsc5yp55.pdf" target="_blank" rel="noopener">Offer</a> on the 15 July for unlisted wholesale buying group Australian Independent Rural Retailers (AIRR), by way of a Scheme. This transaction also requires ACCC approval.
Oddly, one media source <a href="https://www.theaustralian.com.au/subscribe/news/1/?sourceCode=TAWEB_WRE170_a_GGL&amp;dest=https%3A%2F%2Fwww.theaustralian.com.au%2Fbusiness%2Fcompanies%2Fnutriens-ruralco-bid-facing-accc-knockback%2Fnews-story%2Fad1c4f49c98c766229950fc8afcbf2fe&amp;memtype=anonymous&amp;mode=premium" target="_blank" rel="noopener">reported</a> yesterday (paywalled) that ACCC would reject the Nutrien/Ruralco merger. 
This morning,  the ACCC <a href="https://www.asx.com.au/asxpdf/20190822/pdf/447qmxjqm4m560.pdf" target="_blank" rel="noopener">cleared</a> the merger. The clearance is subject to Nutrien divesting merchandise stores located in Broome, Alice Springs and Hughenden. 
The Scheme Meeting is tabled for the 6 September with an expected Implementation Date of 30 September.
This is a done deal and will trade tight to terms.
<a href="https://www.asx.com.au/asxpdf/20190822/pdf/447qmxjqm4m560.pdf" target="_blank" rel="noopener"></a>

On the 27 February this year, Ruralco Holdings (RHL AU) announced it had entered into a Scheme Implementation Deed in which Nutrien Ltd (NTR CN) had agreed to take Ruralco private at $4.40/share - a 44% premium to last close and the one-month VWAP. The Scheme was subject to shareholder approval, and approval from the ACCC and FIRB. 
The ACCC did not oppose Ruralco's proposed acquisition of Elders Ltd (ELD AU) back in May 2013. ACCC's chairman said at the time the combined rural services retail networks of the merger parties would be constrained by alternative retail suppliers of agri-products located nearby.
Ruralco and Elders are the No.1 &amp; 2 players, with Nutrien's Landmark third. If there was no issue with Ruralco &amp; Elders combining, there should have been no issue with Ruralco and Nutrien/Landmark teaming up.
On the 13 June, the ACCC announced its Statement of Issues (SOI), raising preliminary competition concerns. The key issue centers on merchandising and the dilution of competition from this transaction. The ACCC had fewer concerns over the amalgamated impact on the agency businesses.
The ACCC's concerns were not definitive nor strongly worded, therefore the possibility of a formal clearance remained. But on balance, my read was that there was sufficient weight surrounding merchandising issues such that the divestment of some stores was likely required for this deal to get up. 
To make matters interesting, Elders made an A$187mn scrip/cash (50:50) Offer on the 15 July for unlisted wholesale buying group Australian Independent Rural Retailers (AIRR), by way of a Scheme. This transaction also requires ACCC approval.
Oddly, one media source reported yesterday (paywalled) that ACCC would reject the Nutrien/Ruralco merger. 
This morning,  the ACCC cleared the merger. The clearance is subject to Nutrien divesting merchandise stores located in Broome, Alice Springs and Hughenden. 
The Scheme Meeting is tabled for the 6 September with an expected Implementation Date of 30 September.
This is a done deal and will trade tight to terms.


Ruralco Holdings

ACCC Green Lights Ruralco/Nutrien Merger