European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>The CMA provisionally found that the acquisition of <a href="https://www.smartkarma.com/entities/emis-group-plc" target="_blank" data-smartkarma-citation="entities:21918:1" rel="noopener">EMIS Group PLC (EMIS LN)</a> may not result in a substantial lessening of competition. Final decision to be published on 5 October.</li>
<li>The Court sanctioning could take place on 16 October. The scheme would become effective on 17 October. Assuming settlement by 31 October, spread is 0.99%/4.81% (gross/annualised).</li>
<li>Assuming a break of 1,292p, the market is pricing a 97% probability of deal completion (vs. 6% by 15 June).</li>
</ul>


The CMA provisionally found that the acquisition of EMIS Group PLC (EMIS LN) may not result in a substantial lessening of competition. Final decision to be published on 5 October.
The Court sanctioning could take place on 16 October. The scheme would become effective on 17 October. Assuming settlement by 31 October, spread is 0.99%/4.81% (gross/annualised).
Assuming a break of 1,292p, the market is pricing a 97% probability of deal completion (vs. 6% by 15 June).


UnitedHealth/​​EMIS: Provisional Clearance, Estimated Timeline

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>Big picture: <a href="https://www.smartkarma.com/entities/japan-post-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:359:1" rel="noopener">Japan Post (6178 JP)</a> selling 29% of <a href="https://www.smartkarma.com/entities/japan-post-bank-co-ltd" target="_blank" data-smartkarma-citation="entities:838:1" rel="noopener">Japan Post Bank (7182 JP)</a> is a Very Big Offering at ¥1.236trln. 80/20 dom/international. A TOUGH sell. 1.089bn shares is 4x float. </li>
<li>
<a href="https://www.smartkarma.com/entities/downer-edi-ltd" target="_blank" data-smartkarma-citation="entities:12350:1" rel="noopener">Downer EDI (DOW AU)</a>'s CEO resigned ahead of announcing accounting irregularities last December. The CFO resigned this week after Downer announced another profit downgrade. Now the chairman is exiting. </li>
<li>Hong Kong broadband play <a href="https://www.smartkarma.com/entities/hkbn-ltd" target="_blank" data-smartkarma-citation="entities:289:1" rel="noopener">HKBN Ltd (1310 HK)</a>said it has been approached by I Squares' HGC. No pricing announced, but talks continue. </li>
</ul>


Big picture: Japan Post (6178 JP) selling 29% of Japan Post Bank (7182 JP) is a Very Big Offering at ¥1.236trln. 80/20 dom/international. A TOUGH sell. 1.089bn shares is 4x float. 

Downer EDI (DOW AU)'s CEO resigned ahead of announcing accounting irregularities last December. The CFO resigned this week after Downer announced another profit downgrade. Now the chairman is exiting. 
Hong Kong broadband play HKBN Ltd (1310 HK)said it has been approached by I Squares' HGC. No pricing announced, but talks continue. 


Last Week in Event SPACE: Japan Post/Japan Post Bank, Downer, HKBN, Golden Energy

<ul>
<li>A CMA's Phase One investigation period began on 23 January to investigate whether the deal may result in a substantial lessening of competition. Deadline for the decision is 17 March.</li>
<li>EMIS anticipates closing late Q1/early Q2 2023. The Permitted Final Dividend amounts to 21.1p. No final dividend has yet been declared, although theoretically it could happen around 17 March.</li>
<li>Spread is 2.96%/29.39% (gross/annualised), assuming settlement by 15 April, as good as it gets for a stock with an average daily turnover of c.GBP7 million in the European space.</li>
</ul>


A CMA's Phase One investigation period began on 23 January to investigate whether the deal may result in a substantial lessening of competition. Deadline for the decision is 17 March.
EMIS anticipates closing late Q1/early Q2 2023. The Permitted Final Dividend amounts to 21.1p. No final dividend has yet been declared, although theoretically it could happen around 17 March.
Spread is 2.96%/29.39% (gross/annualised), assuming settlement by 15 April, as good as it gets for a stock with an average daily turnover of c.GBP7 million in the European space.


UnitedHealth/​EMIS: Estimated Calendar, Spread

<ul>
<li>Davidson Kempner and others may seek an improved offer of up to 3,500p/share, 29.7x EV/Fwd EBIT, in line with Ideagen's acquisition multiples. Gross spread is +2.38%.</li>
<li>Assuming AVEVA can reach 2018a 34.7% EBITDA margins and increase revenues, the offer price would seem cheap. An increase to 3,300p seems feasible, £4,073 million, similar to the Bridge Facility.</li>
<li>Current net debt/EBITDA is 1.3x and EBIT/interest is 33.6x, so it could comfortably take on that additional debt. At 3,300p, proforma net debt/EBITDA would be 1.9x, before adding any synergies.</li>
</ul>


Davidson Kempner and others may seek an improved offer of up to 3,500p/share, 29.7x EV/Fwd EBIT, in line with Ideagen's acquisition multiples. Gross spread is +2.38%.
Assuming AVEVA can reach 2018a 34.7% EBITDA margins and increase revenues, the offer price would seem cheap. An increase to 3,300p seems feasible, £4,073 million, similar to the Bridge Facility.
Current net debt/EBITDA is 1.3x and EBIT/interest is 33.6x, so it could comfortably take on that additional debt. At 3,300p, proforma net debt/EBITDA would be 1.9x, before adding any synergies.


Schneider Electric/​Aveva: Potential Offer Price Sweetening

<ul>
<li>Schneider has agreed a 3,100p (+13p interim) cash offer for the remaining 40.86% of AVEVA (41% premium, 26.7x EV/Fwd EBIT, 30.5x Fwd P/E), which some dub opportunistic.</li>
<li>The offer price is in line with average multiples for the last 5Y, and there's execution risk in the model transition of AVEVA, but riches may lie ahead. </li>
<li>Gross spread is +0.8% (+interim), the market expects a sweetening (no large shareholder has irrevocably undertaken to tender); the daily average GBP volume since 23 August has been c.£62 million.</li>
</ul>


Schneider has agreed a 3,100p (+13p interim) cash offer for the remaining 40.86% of AVEVA (41% premium, 26.7x EV/Fwd EBIT, 30.5x Fwd P/E), which some dub opportunistic.
The offer price is in line with average multiples for the last 5Y, and there's execution risk in the model transition of AVEVA, but riches may lie ahead. 
Gross spread is +0.8% (+interim), the market expects a sweetening (no large shareholder has irrevocably undertaken to tender); the daily average GBP volume since 23 August has been c.£62 million.


Schneider Electric/Aveva: Recommended Minorities Buyout

United Kingdom

EMIS Group provides connected healthcare software and systems for healthcare professionals across the United Kingdom. Its solutions serve primary, community, acute, and social care, as well as community pharmacies, offering integrated care technology, patient-facing services, and data analytics. The company is headquartered in Leeds, United Kingdom, and was founded in 1987.

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EMIS Group (EMIS LN)

UnitedHealth/EMIS: Provisional Clearance, Estimated Timeline

The CMA provisionally found that the acquisition of EMIS Group PLC (EMIS LN) may not result in a substantial lessening of competition. Final...

Jesus Rodriguez Aguilar

Last Week in Event SPACE: Japan Post/Japan Post Bank, Downer, HKBN, Golden Energy

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

UnitedHealth/EMIS: Estimated Calendar, Spread

The CMA said it will investigate whether the deal may result in a substantial lessening of competition. Deadline for Phase One decision is 17...

Jesus Rodriguez Aguilar

Schneider Electric/Aveva: Potential Offer Price Sweetening

Hedge fund Davidson Kempner Capital Management is building a stake in Aveva (currently 3.5%) and will join others in pushing Schneider Electric...

Jesus Rodriguez Aguilar

Schneider Electric/Aveva: Recommended Minorities Buyout

The offer price does not come as a surprise and the operation, however dilutive, makes strategic sense for Schneider. Gross spread is positive and...

Jesus Rodriguez Aguilar

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52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

UnitedHealth/​​EMIS: Provisional Clearance, Estimated Timeline

The CMA provisionally found that the acquisition of EMIS Group PLC (EMIS LN) may not result in a substantial lessening of competition. Final...

Jesus Rodriguez Aguilar

Last Week in Event SPACE: Japan Post/Japan Post Bank, Downer, HKBN, Golden Energy

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

UnitedHealth/​EMIS: Estimated Calendar, Spread

The CMA said it will investigate whether the deal may result in a substantial lessening of competition. Deadline for Phase One decision is 17...

Jesus Rodriguez Aguilar

Schneider Electric/​Aveva: Potential Offer Price Sweetening

Hedge fund Davidson Kempner Capital Management is building a stake in Aveva (currently 3.5%) and will join others in pushing Schneider Electric...

Jesus Rodriguez Aguilar

Schneider Electric/Aveva: Recommended Minorities Buyout

The offer price does not come as a surprise and the operation, however dilutive, makes strategic sense for Schneider. Gross spread is positive and...

Jesus Rodriguez Aguilar

UnitedHealth/EMIS: Provisional Clearance, Estimated Timeline

UnitedHealth/EMIS: Estimated Calendar, Spread

Schneider Electric/Aveva: Potential Offer Price Sweetening