Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Index Rebalance

Empiric Student Property / Index Rebalance

<ul>
<li>In this insight, we take a look at Quiddity's final predictions for index changes for the  F100 and F250 indices for the June 2023 Rebalance.</li>
<li>The index changes are likely to be confirmed after market close today.</li>
<li>We expect one change for the F100 index and six changes for the F250 index.</li>
</ul>


In this insight, we take a look at Quiddity's final predictions for index changes for the  F100 and F250 indices for the June 2023 Rebalance.
The index changes are likely to be confirmed after market close today.
We expect one change for the F100 index and six changes for the F250 index.


Quiddity Final Thoughts for F100/​250 June 23: Multiple High-Impact Changes Likely

European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>The NewMed/Capricorn reverse takeover should be approved at an EGM. Investors opposing the deal (mainly event-driven funds) hold in aggregate at least c. 33.6% of cash-rich Capricorn. </li>
<li>The approval threshold is 50% (vs. 75% in Tullow's merger), which should favour the approval. But the +6.9% spread (as of 28 November), reveals it'll be challenging.</li>
<li>First Tullow sought CNE's cash pile, now NewMed seeks CNE's Middle East assets and a coveted London listing. Unless NewMed sweetens the terms, this deal may not happen either.</li>
</ul>


The NewMed/Capricorn reverse takeover should be approved at an EGM. Investors opposing the deal (mainly event-driven funds) hold in aggregate at least c. 33.6% of cash-rich Capricorn. 
The approval threshold is 50% (vs. 75% in Tullow's merger), which should favour the approval. But the +6.9% spread (as of 28 November), reveals it'll be challenging.
First Tullow sought CNE's cash pile, now NewMed seeks CNE's Middle East assets and a coveted London listing. Unless NewMed sweetens the terms, this deal may not happen either.


NewMed Energy/​Capricorn: Positive Spread

<ul>
<li>Capricorn Energy withdrew the recommendation to merge with Tullow to instead merge with NewMed Energy LP thorugh a reverse takeover  to create one of the largest European E&amp;P companies.</li>
<li>Capricorn shareholders will receive an upfront dividend and a residual interest in a MENA gas champion (which, unlike Tullow, does not need Capricorn's large cash balance to develop fields).</li>
<li>The deal offers certainty for Capricorn's shareholders. Chances to complete are high. Gross spread is 5.8%. Long Capricorn or setting up the spread (but NewMed is not massively liquid).</li>
</ul>


Capricorn Energy withdrew the recommendation to merge with Tullow to instead merge with NewMed Energy LP thorugh a reverse takeover  to create one of the largest European E&amp;P companies.
Capricorn shareholders will receive an upfront dividend and a residual interest in a MENA gas champion (which, unlike Tullow, does not need Capricorn's large cash balance to develop fields).
The deal offers certainty for Capricorn's shareholders. Chances to complete are high. Gross spread is 5.8%. Long Capricorn or setting up the spread (but NewMed is not massively liquid).


NewMed Energy/Capricorn: Agreed Reverse Takeover, Bye Bye Tullow

<ul>
<li>On 9 September, Capricorn's closing share price was at a c. 29% premium vs. merger terms (186.46p); scheme approval seems tricky. Capricorn has signaled it is open to explore other transactions.</li>
<li>To rebalance the exchange equation, Tullow should offer at least 4.904043 TLW LN x 1 CNE LN, which would change the balance of power (Capricorn 51.8%, Tullow 48.2%).</li>
<li>Cash makes up to 72% of Capricorn's shares, whose latest price movements could either anticipate some statement from Tullow or other "potential outcomes". I'd be long Capricorn, rather than the spread.</li>
</ul>


On 9 September, Capricorn's closing share price was at a c. 29% premium vs. merger terms (186.46p); scheme approval seems tricky. Capricorn has signaled it is open to explore other transactions.
To rebalance the exchange equation, Tullow should offer at least 4.904043 TLW LN x 1 CNE LN, which would change the balance of power (Capricorn 51.8%, Tullow 48.2%).
Cash makes up to 72% of Capricorn's shares, whose latest price movements could either anticipate some statement from Tullow or other "potential outcomes". I'd be long Capricorn, rather than the spread.


Tullow/Capricorn: Unsuitable on Current Terms

<ul>
<li>Tullow offers 3.8068 shares per Capricorn share in a transaction meant to repair Tullow's balance sheet and develop both Tullow's and Capricorn's assets in a supportive crude price environment.</li>
<li>Although Tullow's share price has declined by 95% over the last ten years, the company has managed to remain as a going-concern due to a successful restructuring in 2021.</li>
<li>It is not completely clear that Capricorn's shareholders will vote the scheme. Their shares are worth 6% more than the shares to be received under the exchange equation.</li>
</ul>


Tullow offers 3.8068 shares per Capricorn share in a transaction meant to repair Tullow's balance sheet and develop both Tullow's and Capricorn's assets in a supportive crude price environment.
Although Tullow's share price has declined by 95% over the last ten years, the company has managed to remain as a going-concern due to a successful restructuring in 2021.
It is not completely clear that Capricorn's shareholders will vote the scheme. Their shares are worth 6% more than the shares to be received under the exchange equation.


Tullow Oil/Capricorn Energy: Lowering Leverage

United Kingdom

Capricorn Energy PLC is oil and gas exploration and development company. The Company operates in North West Europe, North Atlantic, Mediterranean, and South Asia.

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Capricorn Energy (CNE LN)

Quiddity Final Thoughts for F100/250 June 23: Multiple High-Impact Changes Likely

The F100 and F250 data cutoff has passed. The announcement of changes should come today after the London close. We see multiple high-impact...

Travis Lundy

NewMed Energy/Capricorn: Positive Spread

Althugh the terms were greatly improved vs. the failed Tullow berger, top shareholders have spoken out against the sale to NewMed and argue that...

Jesus Rodriguez Aguilar

NewMed Energy/Capricorn: Agreed Reverse Takeover, Bye Bye Tullow

With the announcement of the combination with Tullow, Capricorn put itself up for sale. The deal with NewMed provides arguably more security to...

Jesus Rodriguez Aguilar

Tullow/Capricorn: Unsuitable on Current Terms

On Friday 9 September, the closing share price of Capricorn was 240.2p, a c. 29% premium vs. the exchange equation (186.46p). The Board of...

Jesus Rodriguez Aguilar

Tullow Oil/Capricorn Energy: Lowering Leverage

Tullow Oil is seeking access to the cash pile of Capricorn, while Capricorn benefits from Tullow's production, reserves and FCF generation, all in...

Jesus Rodriguez Aguilar

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Quiddity Final Thoughts for F100/​250 June 23: Multiple High-Impact Changes Likely

The F100 and F250 data cutoff has passed. The announcement of changes should come today after the London close. We see multiple high-impact...

Travis Lundy

NewMed Energy/​Capricorn: Positive Spread

Althugh the terms were greatly improved vs. the failed Tullow berger, top shareholders have spoken out against the sale to NewMed and argue that...

Jesus Rodriguez Aguilar

NewMed Energy/Capricorn: Agreed Reverse Takeover, Bye Bye Tullow

With the announcement of the combination with Tullow, Capricorn put itself up for sale. The deal with NewMed provides arguably more security to...

Jesus Rodriguez Aguilar

Tullow/Capricorn: Unsuitable on Current Terms

On Friday 9 September, the closing share price of Capricorn was 240.2p, a c. 29% premium vs. the exchange equation (186.46p). The Board of...

Jesus Rodriguez Aguilar

Tullow Oil/Capricorn Energy: Lowering Leverage

Tullow Oil is seeking access to the cash pile of Capricorn, while Capricorn benefits from Tullow's production, reserves and FCF generation, all in...

Jesus Rodriguez Aguilar

Quiddity Final Thoughts for F100/250 June 23: Multiple High-Impact Changes Likely

NewMed Energy/Capricorn: Positive Spread