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>The <a href="https://www.smartkarma.com/entities/capitol-health-ltd" target="_blank" data-smartkarma-citation="entities:14504:1" rel="noopener">Capitol Health (CAJ AU)</a> IE considers <a href="https://www.smartkarma.com/entities/integral-diagnostics-ltd" target="_blank" data-smartkarma-citation="entities:24306:1" rel="noopener">Integral Diagnostics (IDX AU)</a>’s merger proposal (0.12849 Integral shares per Capitol share) fair and reasonable. </li>
<li>While ACCC informal clearance is an overhang, the evidence suggests that clearance should be secured. The shareholder vote risk is low.</li>
<li>The offer terms are attractive. At the last close and for the 14 November payment, the gross/annualised spread is 4.7%/37.3%.  </li>
</ul>


The Capitol Health (CAJ AU) IE considers Integral Diagnostics (IDX AU)’s merger proposal (0.12849 Integral shares per Capitol share) fair and reasonable. 
While ACCC informal clearance is an overhang, the evidence suggests that clearance should be secured. The shareholder vote risk is low.
The offer terms are attractive. At the last close and for the 14 November payment, the gross/annualised spread is 4.7%/37.3%.  


Capitol Health (CAJ AU): ACCC Overhang as Scheme Meeting Set for 31 October

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>MA Financial (13.43% of shares out) and Alison Hughes (9.94%) said they will reject Genesis A$1.8675/share offer for <a href="https://www.smartkarma.com/entities/pacific-smiles-group-ltd" target="_blank" data-smartkarma-citation="entities:2891:1" rel="noopener">Pacific Smiles (PSQ AU)</a>; therefore the 90% acceptance condition cannot be met.</li>
<li>Separately, PSQ's board also rejected terms, as Genesis Offer is below NDC's A$2.05/share Offer; plus terms are "opportunistic" as they do not account for PSQ's recent strong financial improvement. </li>
<li>What now? Genesis has the flexibility to bump. Expect that to occur. They won't fold their tent in response to this latest development.</li>
</ul>


MA Financial (13.43% of shares out) and Alison Hughes (9.94%) said they will reject Genesis A$1.8675/share offer for Pacific Smiles (PSQ AU); therefore the 90% acceptance condition cannot be met.
Separately, PSQ's board also rejected terms, as Genesis Offer is below NDC's A$2.05/share Offer; plus terms are "opportunistic" as they do not account for PSQ's recent strong financial improvement. 
What now? Genesis has the flexibility to bump. Expect that to occur. They won't fold their tent in response to this latest development.


Pacific Smiles: Key Shareholders Reject Genesis' Terms

<ul>
<li>On the 18th July, diagnostic imaging provider <a href="https://www.smartkarma.com/entities/capitol-health-ltd" target="_blank" data-smartkarma-citation="entities:14504:1" rel="noopener">Capitol Health (CAJ AU)</a> entered a Scheme with <a href="https://www.smartkarma.com/entities/integral-diagnostics-ltd" target="_blank" data-smartkarma-citation="entities:24306:1" rel="noopener">Integral Diagnostics (IDX AU)</a>. IDX will issue 0.12849 new IDX shares for each Capitol share</li>
<li>Upon completing the transaction, Integral would hold ~63% in the MergeCo. They key risk is the ACCC signing off. A decision is expected on (or around) the 28th November.  </li>
<li>The Scheme Booklet is <a href="https://announcements.asx.com.au/asxpdf/20240924/pdf/0687rhtyjsbvt0.pdf" target="_blank" rel="noopener">now out</a>, with a Scheme Meeting to be held on the 31st October. Expected implementation on the 14th November. The IE says fair &amp; reasonable.</li>
</ul>


On the 18th July, diagnostic imaging provider Capitol Health (CAJ AU) entered a Scheme with Integral Diagnostics (IDX AU). IDX will issue 0.12849 new IDX shares for each Capitol share
Upon completing the transaction, Integral would hold ~63% in the MergeCo. They key risk is the ACCC signing off. A decision is expected on (or around) the 28th November.  
The Scheme Booklet is now out, with a Scheme Meeting to be held on the 31st October. Expected implementation on the 14th November. The IE says fair &amp; reasonable.


Capitol Health (CAJ AU)/Integral Diagnostics (IDX AU):  31st Oct Merger Vote

<ul>
<li>After Crescent Capital 's National Dental Care' (NDC) A$2.05/share Offer, by way of Scheme, failed on the 9 August. it was just a question of when Genesis re-loaded its Offer.</li>
<li>Genesis has now announced a <a href="https://announcements.asx.com.au/asxpdf/20240917/pdf/067yp3mz2w0mbt.pdf" target="_blank" rel="noopener">A$1.90/share off-market Offer</a> (<a href="https://announcements.asx.com.au/asxpdf/20240729/pdf/0660k38ywr0ry3.pdf" target="_blank" rel="noopener"> its 29 July A$1.90/share approach was a Scheme</a>), conditional on a 90% minimum acceptance. Pricing falls within the IE' fair value range.</li>
<li>
<a href="https://www.smartkarma.com/entities/pacific-smiles-group-ltd" target="_blank" data-smartkarma-citation="entities:2891:1" rel="noopener">Pacific Smiles (PSQ AU)</a>'s board previously gave unanimous support for NDC's prior A$1.90/share Offer. The question is whether the 90% hurdle is met. I think it will.</li>
</ul>


After Crescent Capital 's National Dental Care' (NDC) A$2.05/share Offer, by way of Scheme, failed on the 9 August. it was just a question of when Genesis re-loaded its Offer.
Genesis has now announced a A$1.90/share off-market Offer ( its 29 July A$1.90/share approach was a Scheme), conditional on a 90% minimum acceptance. Pricing falls within the IE' fair value range.

Pacific Smiles (PSQ AU)'s board previously gave unanimous support for NDC's prior A$1.90/share Offer. The question is whether the 90% hurdle is met. I think it will.


Pacific Smiles (PSQ AU): Genesis' Off-Market A$1.90/Share Offer

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Quantitative Analysis

<ul>
<li>We analyzed the changes in short interest of ASX Stocks as of Sep 6th (reported today) which has an aggregated short interest worth USD24.3bn.</li>
<li>We tabulate league table for top short by value and short as multiple of ADT, as well as weekly increases &amp; decreases in short value, short as multiple of ADT.</li>
<li>We highlight short interest changes in Macquarie, Fortescue, Mirvac, Insurance Australia, BHP, Wesfarmers, CSL.</li>
</ul>


We analyzed the changes in short interest of ASX Stocks as of Sep 6th (reported today) which has an aggregated short interest worth USD24.3bn.
We tabulate league table for top short by value and short as multiple of ADT, as well as weekly increases &amp; decreases in short value, short as multiple of ADT.
We highlight short interest changes in Macquarie, Fortescue, Mirvac, Insurance Australia, BHP, Wesfarmers, CSL.


ASX Short Interest Weekly (Sep 6th): Macquarie, Fortescue, Mirvac, Insurance Australia, BHP

Australia

Healius Limited provides health care services. The Company offers diagnostic imaging, pathology, acute and chronic disease treatment, dental and eye care, and in vitro fertilisation services. Healius serves patients in Australia.

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Healius (HLS AU)

Capitol Health (CAJ AU): ACCC Overhang as Scheme Meeting Set for 31 October

The merger update notes that Integral has proposed to divest a Capitol clinic in Melton, Victoria, to secure ACCC approval. The ACCC provisional...

Arun George

Pacific Smiles: Key Shareholders Reject Genesis' Terms

Pacific Smiles (PSQ AU)'s board caves and now recommends shareholders accept the Offer. Genesis Bidco now holds 32.93%, which the board reckons is...

David Blennerhassett

Capitol Health (CAJ AU)/Integral Diagnostics (IDX AU): 31st Oct Merger Vote

Trading wide at a ~5.2%/45% gross/annualised spread. I'm still not comfortable with the ACCC risk here. I'd avoid the arb. I'd be looking...

David Blennerhassett

ASX Short Interest Weekly (Sep 6th): Macquarie, Fortescue, Mirvac, Insurance Australia, BHP

We analyzed ASX short interest report for the past week and highlight short interest changes in Macquarie, Fortescue, Mirvac, Insurance Australia,...

Ke Yan, CFA, FRM

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Capitol Health (CAJ AU): ACCC Overhang as Scheme Meeting Set for 31 October

The merger update notes that Integral has proposed to divest a Capitol clinic in Melton, Victoria, to secure ACCC approval. The ACCC provisional...

Arun George

Pacific Smiles: Key Shareholders Reject Genesis' Terms

Pacific Smiles (PSQ AU)'s board caves and now recommends shareholders accept the Offer. Genesis Bidco now holds 32.93%, which the board reckons is...

David Blennerhassett

Capitol Health (CAJ AU)/Integral Diagnostics (IDX AU): 31st Oct Merger Vote

Trading wide at a ~5.2%/45% gross/annualised spread. I'm still not comfortable with the ACCC risk here. I'd avoid the arb. I'd be looking...

David Blennerhassett

Pacific Smiles (PSQ AU): Genesis' Off-Market A$1.90/Share Offer

Trading at a 2.1/11.1% gross/annualised spread, assuming mid-late November payment. If not in, get involved here, and on any dips.

David Blennerhassett

ASX Short Interest Weekly (Sep 6th): Macquarie, Fortescue, Mirvac, Insurance Australia, BHP

We analyzed ASX short interest report for the past week and highlight short interest changes in Macquarie, Fortescue, Mirvac, Insurance Australia,...

Ke Yan, CFA, FRM