IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

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

<ul>
<li>
<a href="https://www.smartkarma.com/entities/costa-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:22632:1" rel="noopener">Costa Group Holdings (CGC AU)</a> has entered a scheme implementation deed with Paine Schwartz Partners (PSP) led consortium at A$3.20 per share. </li>
<li>The key conditions are regulatory and shareholder approval. China SAMR regulatory approval poses a risk, primarily related to timing. Costa anticipates completion in 1Q24.</li>
<li>The headcount test related to the retail vote remains a risk. The risk/reward is unfavourable as the deal break downside (10%+) outweighs the offer’s upside (3.6% at last close).  </li>
</ul>



Costa Group Holdings (CGC AU) has entered a scheme implementation deed with Paine Schwartz Partners (PSP) led consortium at A$3.20 per share. 
The key conditions are regulatory and shareholder approval. China SAMR regulatory approval poses a risk, primarily related to timing. Costa anticipates completion in 1Q24.
The headcount test related to the retail vote remains a risk. The risk/reward is unfavourable as the deal break downside (10%+) outweighs the offer’s upside (3.6% at last close).  


Costa Group (CGC AU): Binding Proposal Comes with Risks

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>On the 18 September, <a href="https://www.smartkarma.com/entities/costa-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:22632:1" rel="noopener">Costa Group Holdings (CGC AU)</a> announced A$3.20/share best and final Offer from Paine Schwartz Partners (PSP) down from the A$3.50/share NBIO in July.</li>
<li>Costa's shares wobbled - would they, won't they be supportive? A break price beyond the undisturbed price loomed. Vanguard kicked out a chunk of shares below A$3.</li>
<li>This morning Costa and PSP entered into a Scheme Implementation Deed. The transaction is expected to close in 1Q24. Key conditions are Costa's shareholder vote and FIRB/SAMR/EU approval. </li>
</ul>


On the 18 September, Costa Group Holdings (CGC AU) announced A$3.20/share best and final Offer from Paine Schwartz Partners (PSP) down from the A$3.50/share NBIO in July.
Costa's shares wobbled - would they, won't they be supportive? A break price beyond the undisturbed price loomed. Vanguard kicked out a chunk of shares below A$3.
This morning Costa and PSP entered into a Scheme Implementation Deed. The transaction is expected to close in 1Q24. Key conditions are Costa's shareholder vote and FIRB/SAMR/EU approval. 


<ul>
<li>
<a href="https://www.smartkarma.com/entities/costa-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:22632:1" rel="noopener">Costa Group Holdings (CGC AU)</a>  has disclosed a revised non-binding indicative proposal from Paine Schwartz Partners at A$3.20 per share, 9.6% lower than the previous offer on a like-for-like basis. </li>
<li>The weak CY23 outlook impacted the debt that could be taken on to meet the IRR hurdles of the previous offer. The revised offer is the best and final offer.</li>
<li>The Board faces a dilemma as the offer is light, but some shareholders will want the Board to accept as trading volatility making Costa more suited to the private market.</li>
</ul>



Costa Group Holdings (CGC AU)  has disclosed a revised non-binding indicative proposal from Paine Schwartz Partners at A$3.20 per share, 9.6% lower than the previous offer on a like-for-like basis. 
The weak CY23 outlook impacted the debt that could be taken on to meet the IRR hurdles of the previous offer. The revised offer is the best and final offer.
The Board faces a dilemma as the offer is light, but some shareholders will want the Board to accept as trading volatility making Costa more suited to the private market.


Costa Group (CGC AU): Paine Schwartz’s Final Proposal Poses a Dilemma

<ul>
<li>Back on the 4 July, Paine Schwartz Partners (PSP) made an A$3.50/share NBIO for <a href="https://www.smartkarma.com/entities/costa-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:22632:1" rel="noopener">Costa Group (CGC AU)</a> by way of a Scheme.  PSP held 14.84% at the time.</li>
<li>The due diligence period came and went, or so it appeared, but Costa said it remained ongoing.  Rumours circulated that PSP had gone cold. 1H23 results were also delayed. </li>
<li>Costa has now announced this morning that PSP has returned with a $3.20/share Offer - best and final - reduced for any permitted dividend of up to A$0.04, if declared. </li>
</ul>


Back on the 4 July, Paine Schwartz Partners (PSP) made an A$3.50/share NBIO for Costa Group (CGC AU) by way of a Scheme.  PSP held 14.84% at the time.
The due diligence period came and went, or so it appeared, but Costa said it remained ongoing.  Rumours circulated that PSP had gone cold. 1H23 results were also delayed. 
Costa has now announced this morning that PSP has returned with a $3.20/share Offer - best and final - reduced for any permitted dividend of up to A$0.04, if declared. 


<ul>
<li>We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.</li>
<li>Highest spreads - <a href="https://www.smartkarma.com/entities/111-inc" target="_blank" data-smartkarma-citation="entities:27412:1" rel="noopener">111 Inc (YI US)</a>, <a href="https://www.smartkarma.com/entities/costa-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:22632:1" rel="noopener">Costa Group Holdings (CGC AU)</a>, <a href="https://www.smartkarma.com/entities/eoflow-co-ltd" target="_blank" data-smartkarma-citation="entities:36100:1" rel="noopener">Eoflow (294090 KS)</a>, <a href="https://www.smartkarma.com/entities/symbio-holdings-ltd" target="_blank" data-smartkarma-citation="entities:20292:1" rel="noopener">Symbio Holdings (SYM AU)</a>, <a href="https://www.smartkarma.com/entities/mason-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:17664:1" rel="noopener">Mason Group Holdings (273 HK)</a>, <a href="https://www.smartkarma.com/entities/origin-energy-ltd" target="_blank" data-smartkarma-citation="entities:797:1" rel="noopener">Origin Energy (ORG AU)</a>. </li>
<li>Lowest spreads - <a href="https://www.smartkarma.com/entities/healius-ltd-6d4d947d-ad32-4aea-b2d8-265f5768b55e" target="_blank" data-smartkarma-citation="entities:14208:1" rel="noopener">Healius (HLS AU)</a>, <a href="https://www.smartkarma.com/entities/toyo-construction-co-ltd" target="_blank" data-smartkarma-citation="entities:1176:1" rel="noopener">Toyo Construction (1890 JP)</a>, <a href="https://www.smartkarma.com/entities/yaizu-suisankagaku-industry" target="_blank" data-smartkarma-citation="entities:20044:1" rel="noopener">Yaizu Suisankagaku Industry (2812 JP)</a>, <a href="https://www.smartkarma.com/entities/liontown-resources-ltd" target="_blank" data-smartkarma-citation="entities:20488:1" rel="noopener">Liontown Resources (LTR AU)</a>, <a href="https://www.smartkarma.com/entities/t-k-toka-co-ltd" target="_blank" data-smartkarma-citation="entities:18678:1" rel="noopener">T&amp;K Toka Co Ltd (4636 JP)</a>, <a href="https://www.smartkarma.com/entities/itochu-techno-solutions-corp" target="_blank" data-smartkarma-citation="entities:2431:1" rel="noopener">Itochu Techno Solutions (4739 JP)</a>. </li>
</ul>


We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
Highest spreads - 111 Inc (YI US), Costa Group Holdings (CGC AU), Eoflow (294090 KS), Symbio Holdings (SYM AU), Mason Group Holdings (273 HK), Origin Energy (ORG AU). 
Lowest spreads - Healius (HLS AU), Toyo Construction (1890 JP), Yaizu Suisankagaku Industry (2812 JP), Liontown Resources (LTR AU), T&amp;K Toka Co Ltd (4636 JP), Itochu Techno Solutions (4739 JP). 


Merger Arb Mondays (11 Sep) - Eoflow, Mason, Liontown, Newcrest, United Malt, OreCorp, MPI

Australia

Costa Group Holdings Limited operates as a holding company. The Company, through its subsidiaries, grows and markets fruits and vegetables. Costa Group Holdings supplies its products to supermarket chains and independent grocers worldwide.

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Costa Group Holdings (CGC AU)

Costa Group (CGC AU): Binding Proposal Comes with Risks

The timing of China SAMR approval and the headcount test are risks. The risk/reward is unfavourable as the deal break downside (10%+) outweighs the...

Arun George

Costa Backs Paine Schwartz's Lower Bid

Trading tightish and less attractive at a gross/annualised return of 3.9%/10% after shares gained this morning, assuming mid-1Q24 completion. If in...

David Blennerhassett

Costa Group (CGC AU): Paine Schwartz’s Final Proposal Poses a Dilemma

Shares closed down 3.4% as progress to a binding proposal remains uncertain. The Board faces a dilemma as the offer is light, but some shareholders...

Arun George

Costa Mulls Paine Schwartz's Lower Bid

Paine Schwartz' knows this company. Costa reported a decline in its half-year net profit plus a big write-off. Revised terms are a 23% premium to...

David Blennerhassett

Merger Arb Mondays (11 Sep) - Eoflow, Mason, Liontown, Newcrest, United Malt, OreCorp, MPI

This week, the highest gross spreads are 111 (39.7%), Costa (22.8%), Eoflow (18.3%), Symbio (17.3%), Mason (9.0%), Origin Energy (8.1%), JSR...

Arun George

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