Equity Analyst, Event-driven, Quiddity Advisors

Janaghan Jeyakumar, CFA

Equity Analyst, Event-driven

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

Previously, on 14th August 2020, <a href="https://www.smartkarma.com/entities/3p-learning-ltd" target="_blank" data-smartkarma-citation="entities:5708:1" rel="noopener">3P Learning (3PL AU)</a> entered into a <a href="https://www.asx.com.au/asxpdf/20200814/pdf/44lhf0sl8gkn8p.pdf" target="_blank" rel="noopener">Scheme Implementation Agreement</a> with privately-owned US-based competitor <a href="https://www.ixl.com/" target="_blank" rel="noopener">IXL Learning</a> ("IXL") in an all-cash Deal that valued the company at a market cap of A$189mn (US$137mn). The Offer Price was A$1.35/share and the Target Board unanimously recommended the Deal to the shareholders. <div>
Until early-October, 3PL shares were trading tight to terms with a view to complete. However, media reports of top shareholder Viburnum Funds turning hostile caused 3PL shares to decline sharply on 7th October 2020.
On 12th November 2020, Indian ed-tech giant Think and Learn (which operates under the brand name BYJU's) launched a competitive <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02308250-2A1263430?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">Non-binding Indicative Proposal</a> at an Offer Price of A$1.45/share which was around 7.4% higher than what IXL offered. A few days later, on 17th November 2020, BYJU's <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02310190-2A1264417?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">bumped</a> their bid to A$1.50/share.  
Despite the inclusion of a matching right in the Scheme Implementation Agreement, IXL did not launch a counter proposal and in the IXL scheme meeting held on 20th November 2020, <a href="https://www.smartkarma.com/entities/3p-learning-ltd" target="_blank" data-smartkarma-citation="entities:5708:1" rel="noopener">3P Learning (3PL AU)</a> shareholders categorically <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02311606-2A1265082?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">voted down</a> the IXL Deal.
Furthermore, top shareholder Viburnum Funds, who voted against the IXL Deal, also <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02311624-2A1265085?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">proposed</a> a merger with Blake eLearning. 
As 3PL announced <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02312694-2A1265539?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">today</a>, they have now terminated the SIA with IXL and are separately "reviewing and assessing" the remaining two proposals:
<ul>
<li>BYJU's revised all-cash Acquisition Offer at A$1.50 per 3PL share</li>
<li>A merger with Blake eLearning proposed by top shareholder Vibernum Funds </li>
</ul>
<div>More below the fold. </div>
<hr>
<div>For more information about M&amp;A rules, regulations, and practices in Australia, please refer to <a href="https://www.smartkarma.com/insights/quiddity-australia-m-a-guide-2019" target="_blank" data-smartkarma-citation="insights:30118" rel="noopener">Quiddity Australia M&amp;A Guide 2019</a> and <a href="https://www.smartkarma.com/insights/quiddity-m-a-australia-foreign-investment-reforms" target="_blank" data-smartkarma-citation="insights:40210" rel="noopener">Quiddity M&amp;A: Australia Foreign Investment Reforms</a> </div>
</div>

Previously, on 14th August 2020, 3P Learning (3PL AU) entered into a Scheme Implementation Agreement with privately-owned US-based competitor IXL Learning ("IXL") in an all-cash Deal that valued the company at a market cap of A$189mn (US$137mn). The Offer Price was A$1.35/share and the Target Board unanimously recommended the Deal to the shareholders. 
Until early-October, 3PL shares were trading tight to terms with a view to complete. However, media reports of top shareholder Viburnum Funds turning hostile caused 3PL shares to decline sharply on 7th October 2020.
On 12th November 2020, Indian ed-tech giant Think and Learn (which operates under the brand name BYJU's) launched a competitive Non-binding Indicative Proposal at an Offer Price of A$1.45/share which was around 7.4% higher than what IXL offered. A few days later, on 17th November 2020, BYJU's bumped their bid to A$1.50/share.  
Despite the inclusion of a matching right in the Scheme Implementation Agreement, IXL did not launch a counter proposal and in the IXL scheme meeting held on 20th November 2020, 3P Learning (3PL AU) shareholders categorically voted down the IXL Deal.
Furthermore, top shareholder Viburnum Funds, who voted against the IXL Deal, also proposed a merger with Blake eLearning. 
As 3PL announced today, they have now terminated the SIA with IXL and are separately "reviewing and assessing" the remaining two proposals:

BYJU's revised all-cash Acquisition Offer at A$1.50 per 3PL share
A merger with Blake eLearning proposed by top shareholder Vibernum Funds 

More below the fold. 

For more information about M&amp;A rules, regulations, and practices in Australia, please refer to Quiddity Australia M&amp;A Guide 2019 and Quiddity M&amp;A: Australia Foreign Investment Reforms 


3P Learning (3PL AU): Ed-Tech Deal Faces a New Twist

Previously, on 14th August 2020, <a href="https://www.smartkarma.com/entities/3p-learning-ltd" target="_blank" data-smartkarma-citation="entities:5708:1" rel="noopener">3P Learning (3PL AU)</a> entered into a <a href="https://www.asx.com.au/asxpdf/20200814/pdf/44lhf0sl8gkn8p.pdf" target="_blank" rel="noopener">Scheme Implementation Agreement</a> with privately-owned US-based competitor <a href="https://www.ixl.com/" target="_blank" rel="noopener">IXL Learning</a> ("IXL") in an all-cash Deal that valued the company at a market cap of A$189mn (US$137mn). The Offer Price was A$1.35/share and the Target Board unanimously recommended the Deal to the shareholders. 
Until early-October 3PL shares were trading tight to terms with a view to complete. However, media reports of top shareholder Viburnum Funds turning hostile to the transaction caused the share price to decline sharply on 7th October and since then the Deal has been trading wide. 
<div class="content-highlight">
In <a href="https://www.smartkarma.com/insights/3p-learning-3pl-au-ed-tech-cash-deal-now-trading-with-a-view-to-complete" target="_blank" data-smartkarma-citation="insights:42341" rel="noopener">3P Learning (3PL AU) : Ed-Tech Cash Deal Now Trading with a View to Complete?</a>, I wrote...
"I did not find any mention of any of the top ten shareholders in the SIA, nor is there any mention of irrevocable agreement to agree in the document or in the press except for the directors who have agreed to vote for. This is unusual when there are some very large shareholders in place. To me, this reflects the possibility someone else could come over the top and make a big push to win the deal if they sign one of the big shareholders. Viburnum by itself would represent a virtual blocking stake for any deal - scheme or Takeover." 
That is exactly what has happened now. 
</div>
Since IXL's bid, Vibernum has raised its stake from 22.8% to 24.95% which effectively is now a blocking stake and on 12th November 2020, Indian ed-tech giant Think and Learn (which operates under the brand name BYJU's) launched a competitive <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02308250-2A1263430?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">Non-binding Indicative Proposal</a> at an Offer Price of A$1.45/share which is around 7.4% higher than what IXL offered. 
More below the fold. 
<hr>
<div>
For more information about M&amp;A rules, regulations, and practices in Australia, please refer to <a href="https://www.smartkarma.com/insights/quiddity-australia-m-a-guide-2019" target="_blank" data-smartkarma-citation="insights:30118" rel="noopener">Quiddity Australia M&amp;A Guide 2019</a> and <a href="https://www.smartkarma.com/insights/quiddity-m-a-australia-foreign-investment-reforms" target="_blank" data-smartkarma-citation="insights:40210" rel="noopener">Quiddity M&amp;A: Australia Foreign Investment Reforms</a> 
</div>

Previously, on 14th August 2020, 3P Learning (3PL AU) entered into a Scheme Implementation Agreement with privately-owned US-based competitor IXL Learning ("IXL") in an all-cash Deal that valued the company at a market cap of A$189mn (US$137mn). The Offer Price was A$1.35/share and the Target Board unanimously recommended the Deal to the shareholders. 
Until early-October 3PL shares were trading tight to terms with a view to complete. However, media reports of top shareholder Viburnum Funds turning hostile to the transaction caused the share price to decline sharply on 7th October and since then the Deal has been trading wide. 

In 3P Learning (3PL AU) : Ed-Tech Cash Deal Now Trading with a View to Complete?, I wrote...
"I did not find any mention of any of the top ten shareholders in the SIA, nor is there any mention of irrevocable agreement to agree in the document or in the press except for the directors who have agreed to vote for. This is unusual when there are some very large shareholders in place. To me, this reflects the possibility someone else could come over the top and make a big push to win the deal if they sign one of the big shareholders. Viburnum by itself would represent a virtual blocking stake for any deal - scheme or Takeover." 
That is exactly what has happened now. 

Since IXL's bid, Vibernum has raised its stake from 22.8% to 24.95% which effectively is now a blocking stake and on 12th November 2020, Indian ed-tech giant Think and Learn (which operates under the brand name BYJU's) launched a competitive Non-binding Indicative Proposal at an Offer Price of A$1.45/share which is around 7.4% higher than what IXL offered. 
More below the fold. 


For more information about M&amp;A rules, regulations, and practices in Australia, please refer to Quiddity Australia M&amp;A Guide 2019 and Quiddity M&amp;A: Australia Foreign Investment Reforms 


3P Learning (3PL AU) : Indian Ed-Tech Giant BYJU's Competitive Bid

On 14th August 2020, Australia-based online-education company <a href="https://www.smartkarma.com/entities/3p-learning-ltd" target="_blank" data-smartkarma-citation="entities:5708:1" rel="noopener">3P Learning (3PL AU)</a> entered into a <a href="https://www.asx.com.au/asxpdf/20200814/pdf/44lhf0sl8gkn8p.pdf" target="_blank" rel="noopener">Scheme Implementation Agreement</a> with privately-owned US-based competitor <a href="https://www.ixl.com/" target="_blank" rel="noopener">IXL Learning</a> ("IXL"). Under this agreement, IXL will acquire 100% of the share capital of 3PL at an implied market cap of A$189mn (US$137mn). The Offer Price will be A$1.35 per share in cash. The Deal is conditional on receiving Target shareholder approval and FIRB approval. The transaction is expected to be completed in December 2020. At the time of writing, 3PL shares are trading just below Terms. In this insight, we take a closer look at the details of the Deal to evaluate the likelihood of Deal completion. As always, there is more below the fold. <hr>For more information about M&amp;A rules, regulations, and practices in Australia, please refer to <a href="https://www.smartkarma.com/insights/quiddity-australia-m-a-guide-2019" target="_blank" data-smartkarma-citation="insights:30118" rel="noopener">Quiddity Australia M&amp;A Guide 2019</a> and <a href="https://www.smartkarma.com/insights/quiddity-m-a-australia-foreign-investment-reforms" target="_blank" data-smartkarma-citation="insights:40210" rel="noopener">Quiddity M&amp;A: Australia Foreign Investment Reforms</a>

On 14th August 2020, Australia-based online-education company 3P Learning (3PL AU) entered into a Scheme Implementation Agreement with privately-owned US-based competitor IXL Learning ("IXL"). Under this agreement, IXL will acquire 100% of the share capital of 3PL at an implied market cap of A$189mn (US$137mn). The Offer Price will be A$1.35 per share in cash. The Deal is conditional on receiving Target shareholder approval and FIRB approval. The transaction is expected to be completed in December 2020. At the time of writing, 3PL shares are trading just below Terms. In this insight, we take a closer look at the details of the Deal to evaluate the likelihood of Deal completion. As always, there is more below the fold. For more information about M&amp;A rules, regulations, and practices in Australia, please refer to Quiddity Australia M&amp;A Guide 2019 and Quiddity M&amp;A: Australia Foreign Investment Reforms 

3P Learning (3PL AU) : Ed-Tech Cash Deal Now Trading with a View to Complete?

Leading Independent Investment Research, Morningstar, Inc.

Morningstar

Leading Independent Investment Research

Morningstar, Inc.

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Thematic (Sector/Industry)

Leisure companies under our coverage endured a torrid reporting season, with average fiscal 2017 first-half EBITDA fall of 15% from a year ago. The results were mostly driven by factors specific to each group. Still, whether it is the sentiment impact of an isolated theme park tragedy, competitive intensity in the U.S. leisure market, low airfares, or film popularity, the bottom line is there are many variables beyond management's control in the industry. These factors are the very basis for our…

Leisure companies under our coverage endured a torrid reporting season, with average fiscal 2017 first-half EBITDA fall of 15% from a year ago. The results were mostly driven by factors specific to each group. Still, whether it is the sentiment impact of an isolated theme park tragedy, competitive intensity in the U.S. leisure market, low airfares, or film popularity, the bottom line is there are many variables beyond management's control in the industry. These factors are the very basis for our…

Not Much Fun In Leisure; Ardent Leisure Undervalued While Event Hospitality Worth Monitoring

Founder Evidente. Top rated quantitative analyst, Evidente

Sam Ferraro

Founder Evidente. Top rated quantitative analyst

Evidente

Evidente is an independent financial education firm that delivers innovative financial advice to wholesale investors, including active long only funds, hedge funds, pension funds, and sovereign wealth funds, in Australia and globally.  Drawing on academic research in asset pricing, behavioural finance and portfolio construction, Evidente provides wholesale investors with commercial solutions to stock selection and asset allocation decisions across equities and other asset classes.

<ul><li>Australians' long held fascination with land is part of the national psyche.&nbsp; In a speech delivered overnight, RBA Deputy Governor Philip Lowe shows why.&nbsp;&nbsp;Land accounts for one-third of Australia's national assets and that higher land values - not dwellings - have driven residential property markets higher in recent decades.</li><li>Booming land values reflect favourable demand side influences, including strong growth in population and household incomes, while zoning restrictions have meant that the supply response to higher prices has been muted.&nbsp; With slower expected future income growth and increased concerns about future housing costs, the response to higher housing prices looks to be smaller than it was previously.</li><li>Nonetheless, Mr Lowe acknowledges that that a reduction in the household savings ratio is &lsquo;probably appropriate&rsquo; as the economy re-balances from a terms of trade and mining investment booms.&nbsp; Against this backdrop, I re-iterate my positive view on discretionary retailers.&nbsp; Key stocks to buy: HVN, JBH, DSH, GWA, MYR and PMV.</li></ul>

Australians' long held fascination with land is part of the national psyche.&nbsp; In a speech delivered overnight, RBA Deputy Governor Philip Lowe shows why.&nbsp;&nbsp;Land accounts for one-third of Australia's national assets and that higher land values - not dwellings - have driven residential property markets higher in recent decades.Booming land values reflect favourable demand side influences, including strong growth in population and household incomes, while zoning restrictions have meant that the supply response to higher prices has been muted.&nbsp; With slower expected future income growth and increased concerns about future housing costs, the response to higher housing prices looks to be smaller than it was previously.Nonetheless, Mr Lowe acknowledges that that a reduction in the household savings ratio is &lsquo;probably appropriate&rsquo; as the economy re-balances from a terms of trade and mining investment booms.&nbsp; Against this backdrop, I re-iterate my positive view on discretionary retailers.&nbsp; Key stocks to buy: HVN, JBH, DSH, GWA, MYR and PMV.

Australia's land obsession - Reiterate postive view on discretionary retailers

Australia

3P Learning Limited provides educational services. The Company owns and operates a website for students, teachers, and mathematics coordinators with a focus on e-learning of mathematics. 3P Learning serves the kindergarten through twelfth grade curriculum worldwide.

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3P Learning (3PL AU)