IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

Arun has over 15 years’ experience covering the Technology sector. During this time, he has worked with technology start-ups and as an equity analyst in investment banks and independent research firms. He was formerly a Technology Analyst for Canaccord Genuity, Altium Securities, Espirito Santo Investment Bank, Noble Group and Clear Capital. He has a dual Master’s degree in Financial Engineering and Industrial and Operations Engineering from the University of Michigan. He obtained his Bachelor’s degree in Mechanical Engineering from the Indian Institute of Technology, Bombay. He is also a CFA charterholder.

IPOs and Catalysts/Events

Irongate Grants Due Diligence to Charter Hall and PGGM

Irongate Enters into an SIA with Charter Hall and PGGM

Irongate’s Scheme Meeting on 29 June, IE’s Opinion

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Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<a href="https://www.smartkarma.com/entities/irongate-group" target="_blank" data-smartkarma-citation="entities:30897:1" rel="noopener">Irongate Group (IAP AU)</a>, previously called the Investec Australia Property Fund, is a property trust dual-listed on the ASX and JSE. IAP disclosed an unsolicited and indicative non-binding proposal from <a href="https://www.smartkarma.com/entities/360-capital-group-ltd" target="_blank" data-smartkarma-citation="entities:11865:1" rel="noopener">360 Capital (TGP AU)</a> and <a href="https://www.smartkarma.com/entities/360-capital-reit" target="_blank" data-smartkarma-citation="entities:29046:1" rel="noopener">360 Capital REIT (TOT AU)</a> at an indicative headline price of A$1.65 cash per security. The offer price will be reduced by any distributions declared or paid from the date of the proposal. As IAP anticipates a 1HFY22 dividend of A$0.0453 per security, the indicative offer less the 1HFY22 distribution is A$1.6047 per security, a 7.0% premium to the unaffected price of A$1.50 (on 15 October). 360 Capital is IAP largest shareholder and represents 129.0 million IAP securities or 19.99% of IAP securities. The holding is through 360 Capital REIT and 360 Capital Group. 360 Capital built its stake from January 2021 at an average entry price of A$1.41 per security. 360 Capital is seeking a six-week exclusive due diligence period. IAP responded by noting the offer was highly conditional and uncertain particularly regarding financing. The indicative proposal is conditional on ESR Australia entering into an agreement with 360 Capital to buy several undisclosed assets from IAP’s portfolio, on terms yet to be agreed. The proposal also requires entry into new debt facilities with Citibank.  360 Capital relationship with IAP is verging on the hostile. In August, shareholders voted against the election to the board of two 360 Capital candidates after IAP’s Chairman cautioned that 360 Capital could seek to gain effective control of IAP below its fundamental value, through the board. The situation is also reminiscent of 360 Capital Group failed takeover attempt for <a href="https://www.smartkarma.com/entities/e-p-financial-group-ltd" target="_blank" data-smartkarma-citation="entities:27077:1" rel="noopener">E&amp;P Financial Group Ltd (EP1 AU)</a>. <div class="content-highlight">We think that indicative offer is modest in comparison to historical multiples and share prices. Given 360 Capital strained relationship with the IAP board, it is likely that 360 Capital could go hostile by launching an off-market takeover offer. At the last close price, IAP is trading at 2.9% gross spread to the indicative offer less the 1HFY22 distribution.</div>

Irongate Group (IAP AU), previously called the Investec Australia Property Fund, is a property trust dual-listed on the ASX and JSE. IAP disclosed an unsolicited and indicative non-binding proposal from 360 Capital (TGP AU) and 360 Capital REIT (TOT AU) at an indicative headline price of A$1.65 cash per security. The offer price will be reduced by any distributions declared or paid from the date of the proposal. As IAP anticipates a 1HFY22 dividend of A$0.0453 per security, the indicative offer less the 1HFY22 distribution is A$1.6047 per security, a 7.0% premium to the unaffected price of A$1.50 (on 15 October). 360 Capital is IAP largest shareholder and represents 129.0 million IAP securities or 19.99% of IAP securities. The holding is through 360 Capital REIT and 360 Capital Group. 360 Capital built its stake from January 2021 at an average entry price of A$1.41 per security. 360 Capital is seeking a six-week exclusive due diligence period. IAP responded by noting the offer was highly conditional and uncertain particularly regarding financing. The indicative proposal is conditional on ESR Australia entering into an agreement with 360 Capital to buy several undisclosed assets from IAP’s portfolio, on terms yet to be agreed. The proposal also requires entry into new debt facilities with Citibank.  360 Capital relationship with IAP is verging on the hostile. In August, shareholders voted against the election to the board of two 360 Capital candidates after IAP’s Chairman cautioned that 360 Capital could seek to gain effective control of IAP below its fundamental value, through the board. The situation is also reminiscent of 360 Capital Group failed takeover attempt for E&amp;P Financial Group Ltd (EP1 AU). We think that indicative offer is modest in comparison to historical multiples and share prices. Given 360 Capital strained relationship with the IAP board, it is likely that 360 Capital could go hostile by launching an off-market takeover offer. At the last close price, IAP is trading at 2.9% gross spread to the indicative offer less the 1HFY22 distribution.

Irongate’s Unsolicited Offer from 360 Capital