Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>I tally 51 - mostly firm, mostly Asia-Pac - transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.</li>
<li>One new deal was discussed on Smartkarma this week: Carlyle's tiult for <a href="https://www.smartkarma.com/entities/kfc-holdings-japan-ltd" target="_blank" data-smartkarma-citation="entities:12358:1" rel="noopener">KFC Holdings Japan (9873 JP)</a>. <a href="https://www.smartkarma.com/entities/shanghai-henlius-biotech-inc" target="_blank" data-smartkarma-citation="entities:27888:1" rel="noopener">Shanghai Henlius Biotech (2696 HK)</a> suspended pursuant to the Takeovers Code.</li>
<li>Key updates took place on: <a href="https://www.smartkarma.com/entities/alumina-ltd" target="_blank" data-smartkarma-citation="entities:939:1" rel="noopener">Alumina Ltd (AWC AU)</a>, <a href="https://www.smartkarma.com/entities/l-occitane-international-sa" target="_blank" data-smartkarma-citation="entities:6772:1" rel="noopener">L'Occitane (973 HK)</a>, <a href="https://www.smartkarma.com/entities/bhp-group-ltd" target="_blank" data-smartkarma-citation="entities:147:1" rel="noopener">BHP Group Ltd (BHP AU)</a>/ <a href="https://www.smartkarma.com/entities/anglo-american-plc" target="_blank" data-smartkarma-citation="entities:21798:1" rel="noopener">Anglo American (AAL LN)</a>, and <a href="https://www.smartkarma.com/entities/sciclone-pharmaceuticals-holdings-limited" target="_blank" data-smartkarma-citation="entities:17351:1" rel="noopener">SciClone Pharmaceuticals (6600 HK)</a>.</li>
</ul>


I tally 51 - mostly firm, mostly Asia-Pac - transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
One new deal was discussed on Smartkarma this week: Carlyle's tiult for KFC Holdings Japan (9873 JP). Shanghai Henlius Biotech (2696 HK) suspended pursuant to the Takeovers Code.
Key updates took place on: Alumina Ltd (AWC AU), L'Occitane (973 HK), BHP Group Ltd (BHP AU)/ Anglo American (AAL LN), and SciClone Pharmaceuticals (6600 HK).


(Mostly) Asia-Pac M&A: KFC Holdings Japan, Shanghai Henlius, Alumina, BHP/ Anglo American, SciClone

European Event-Driven Analyst

Jesus Rodriguez Aguilar

<ul>
<li>On 22 May, Anglo American rejected the last offer (0.8860) from BHP on execution risks, potential negative value impacts and additional approvals needed in South Africa. PUSU extended 29 May.</li>
<li>I update my SOTP to 2938p. Copper Fair Value, in my opinion, is £17.70 per share. This contrasts with BHP's current offer of £21.32/share for the entirety of Anglo's rump.</li>
<li>There is now a ~20.1% difference between the implied value of BHP's offer and the share price of Anglo. The market assumes a lower likelihood of an agreed deal</li>
</ul>


On 22 May, Anglo American rejected the last offer (0.8860) from BHP on execution risks, potential negative value impacts and additional approvals needed in South Africa. PUSU extended 29 May.
I update my SOTP to 2938p. Copper Fair Value, in my opinion, is £17.70 per share. This contrasts with BHP's current offer of £21.32/share for the entirety of Anglo's rump.
There is now a ~20.1% difference between the implied value of BHP's offer and the share price of Anglo. The market assumes a lower likelihood of an agreed deal


Anglo American Rejects BHP's Increased and Final Offer

<ul>
<li>
<a href="https://www.smartkarma.com/entities/bhp-group-ltd" target="_blank" data-smartkarma-citation="entities:147:1" rel="noopener">BHP (BHP AU)</a>'s all-scrip <a href="https://announcements.asx.com.au/asxpdf/20240426/pdf/062w455d52h3cv.pdf" target="_blank" rel="noopener">unsolicited Offer</a> for <a href="https://www.smartkarma.com/entities/anglo-american-plc" target="_blank" data-smartkarma-citation="entities:21798:1" rel="noopener">Anglo American (AAL LN)</a>, zeroes in on AAL's copper assets as demand for the metal increases for use in EVs and renewable power.</li>
<li>The proposal has been labelled highly opportunistic by some shareholders and South African politicians. And that the value of AAL's Chilian/Peruvian copper mines are obscured by its sprawling business interests.</li>
<li>The Offer remains conditional and non-binding. A transaction hinges off AAL spinning off its South African iron ore and platinum businesses. Expect AAL to reject terms, but remain engaged. </li>
</ul>



BHP (BHP AU)'s all-scrip unsolicited Offer for Anglo American (AAL LN), zeroes in on AAL's copper assets as demand for the metal increases for use in EVs and renewable power.
The proposal has been labelled highly opportunistic by some shareholders and South African politicians. And that the value of AAL's Chilian/Peruvian copper mines are obscured by its sprawling business interests.
The Offer remains conditional and non-binding. A transaction hinges off AAL spinning off its South African iron ore and platinum businesses. Expect AAL to reject terms, but remain engaged. 


BHP/Anglo American: A Decarbonising Solution

Equity, Bottom-up Analyst, Investics Research

Sameer Taneja

Equity, Bottom-up Analyst

Investics Research

It is important to note that the information provided by Investics Research is based on publicly available data and own knowledge, which has been gathered and analyzed from a variety of sources. While every effort has been made to ensure the accuracy and completeness of the information provided, it is not guaranteed to be free from errors or omissions. All forecasts and estimates are based on information that has been obtained from public sources that are considered to be reliable. The sources include but are not limited to, company announcements, exchange filings, presentations, etc. Investics does not guarantee the accuracy and completeness of the forecasts, estimates, and/or other information.

Equity Bottom-up Research

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/kumba-iron-ore-ltd" target="_blank" data-smartkarma-citation="entities:25094:1" rel="noopener">Kumba Iron Ore (KIO SJ)</a> is a net cash iron ore pure play on high-grade lump iron ore with a high ROCE of&gt;30%. </li>
<li>The stock trades at 6.4x PE/3.8x EV-EBITDA FY24e and a &gt;9% dividend yield, assuming it meets its base dividend commitment of 15.9 bn ZAR. </li>
<li>The key risks are the finite mine life of 15 years, which the company will look to extend with capital commitment, and country risk premia as currency depreciation eats returns.</li>
</ul>



Kumba Iron Ore (KIO SJ) is a net cash iron ore pure play on high-grade lump iron ore with a high ROCE of&gt;30%. 
The stock trades at 6.4x PE/3.8x EV-EBITDA FY24e and a &gt;9% dividend yield, assuming it meets its base dividend commitment of 15.9 bn ZAR. 
The key risks are the finite mine life of 15 years, which the company will look to extend with capital commitment, and country risk premia as currency depreciation eats returns.


Kumba Iron Ore (KIO SJ): Net Cash Iron Ore Player With High ROCE

Quantitative Equity Analyst, DMA

Charlotte van Tiddens, CFA

Quantitative Equity Analyst

Technology-First Company

DMA is a technology-first company that provides an end-to-end SaaS solution to institutional investors. DMA enables regulated entities like asset managers, wealth managers, investment managers and financial advisors to connect their front and back office, break silos and reduce headcount.

<ul>
<li>In this note we assess the JSE Top 40 index effect of an Anglo American restructuring or takeover by BHP, assuming the Amplats and Kumba stakes are spun out.</li>
<li>We also explore the details of BHP's initial offer and what the market could be pricing with respect to a potential revision of BHP's stock offer (minimum).</li>
<li>If Kumba is unbundled from Anglo American, we expect the stock to enter the JSE Top 40. Potential deletes are included in the note.</li>
</ul>


In this note we assess the JSE Top 40 index effect of an Anglo American restructuring or takeover by BHP, assuming the Amplats and Kumba stakes are spun out.
We also explore the details of BHP's initial offer and what the market could be pricing with respect to a potential revision of BHP's stock offer (minimum).
If Kumba is unbundled from Anglo American, we expect the stock to enter the JSE Top 40. Potential deletes are included in the note.


Anglo American (AGL, AAL): JSE Index Effects of Potential Takeover or Restructuring

United Kingdom

Anglo American PLC is a global mining company. The Company's mining portfolio includes bulk commodities including iron ore, manganese and metallurgical coal, base metals including copper and nickel and precious metals and minerals including platinum and diamonds.  Anglo American PLC has mining operations in Africa, Europe, North and South America, Asia and Australia.

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Anglo American (AAL LN)

(Mostly) Asia-Pac M&A: KFC Holdings Japan, Shanghai Henlius, Alumina, BHP/ Anglo American, SciClone

This insight provides a summary of gross/annualised spreads (on deals discussed on Smartkarma) across Asia-Pacific as at the last trading date, and...

David Blennerhassett

Anglo American Rejects BHP's Increased and Final Offer

On 22 May, Anglo American rejected the last offer (0.8860) from BHP on execution risks, potential negative value impacts and additional approvals...

Jesus Rodriguez Aguilar

BHP/Anglo American: A Decarbonising Solution

When "Final" doesn't necessarily mean final. After BHP increased its (final) offer ratio terms by 24.8% to 0.8860 BHP shares for each Anglo share -...

David Blennerhassett

Kumba Iron Ore (KIO SJ): Net Cash Iron Ore Player With High ROCE

As part of our comprehensive coverage on the iron ore space, we initiate on iron ore miner Kumba, a high ROCE player with a high dividend payout...

Sameer Taneja

Anglo American (AGL, AAL): JSE Index Effects of Potential Takeover or Restructuring

We explore the recent takeover bid by BHP and potential JSE index effects of a takeover or restructuring that would see Amplats and Kumba unbundled.

DMA

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