Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Australian Pharmaceutical Industries / Event-Driven

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<p>On the 12 July, wholesale and retail pharmacy health/beauty and lifestyle products operator <a href="https://www.smartkarma.com/entities/19399" target="_blank" data-smartkarma-citation="entities:19399:1" rel="noopener">Australian Pharmaceutical Industries (API AU)</a> (API) <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02394187-3A570533?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a> an indicative, non-binding Offer from <a href="https://www.smartkarma.com/entities/wesfarmers-ltd" target="_blank" data-smartkarma-citation="entities:1104:1" rel="noopener">Wesfarmers Ltd (WES AU)</a> by way of a Scheme at $1.38/share,  a 20.5% premium to last close.  Separately, Wesfarmers has entered into an agreement with API's largest shareholder <a href="https://www.smartkarma.com/entities/washington-h-soul-pattinson-and-co-ltd" target="_blank" data-smartkarma-citation="entities:6054:1" rel="noopener">Washington H. Soul Pattinson and Co. Ltd (SOL AU)</a> (WHSP), such that WHSP will vote its 19.3% interest in favour of Wesfarmers' proposal, in the absence of a superior Offer.</p>
<p>There was a whiff of opportunism present, and the API board agreed and concluded in an announcement on the <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02400478-3A571605?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">29 July</a> that the proposal undervalued API, was not compelling, and was not in the best interest of shareholders. </p>
<h3>The New News</h3>
<p>After bumping the Offer by 12.3% to A$1.55/share, Wesfarmers and API entered into a <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02422163-3A575967?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">process deed</a> yesterday. A fully franked dividend of A$0.05/share is permitted, which if paid will reduce the cash consideration.</p>
<p>WHSP remains supportive and will vote its 19.3% in favour of the revised proposal.</p>
<p>API has granted Wesfarmers exclusive due diligence until the 16 October. The deal is also subject to ACCC clearance.</p>
<p>This remains a non-binding Offer, and we have seen two Aussie deals break in the past fortnight, reinforcing the country's moniker as the non-binding graveyard.</p>
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<p>More below the fold.</p>
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On the 12 July, wholesale and retail pharmacy health/beauty and lifestyle products operator Australian Pharmaceutical Industries (API AU) (API) announced an indicative, non-binding Offer from Wesfarmers Ltd (WES AU) by way of a Scheme at $1.38/share,  a 20.5% premium to last close.  Separately, Wesfarmers has entered into an agreement with API's largest shareholder Washington H. Soul Pattinson and Co. Ltd (SOL AU) (WHSP), such that WHSP will vote its 19.3% interest in favour of Wesfarmers' proposal, in the absence of a superior Offer.
There was a whiff of opportunism present, and the API board agreed and concluded in an announcement on the 29 July that the proposal undervalued API, was not compelling, and was not in the best interest of shareholders. 
The New News
After bumping the Offer by 12.3% to A$1.55/share, Wesfarmers and API entered into a process deed yesterday. A fully franked dividend of A$0.05/share is permitted, which if paid will reduce the cash consideration.
WHSP remains supportive and will vote its 19.3% in favour of the revised proposal.
API has granted Wesfarmers exclusive due diligence until the 16 October. The deal is also subject to ACCC clearance.
This remains a non-binding Offer, and we have seen two Aussie deals break in the past fortnight, reinforcing the country's moniker as the non-binding graveyard.


More below the fold.


Aussie Pharma (API AU): Wesfarmer's Sweetened (Yet Indicative) Offer

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.

<p><a href="https://www.smartkarma.com/entities/iress-ltd" target="_blank" data-smartkarma-citation="entities:15342:1" rel="noopener">Iress Ltd (IRE AU)</a> is a financial services software group. Iress revealed a non-binding indicative proposal from EQT to acquire it via a scheme of arrangement. EQT is offering A$15.91 cash per share before franking credits, consisting of a cash consideration of A$15.75 per share and an FY21 interim dividend up to A$0.16 per share. The bid represents a 45.3% premium to the undisturbed share price on 9 June 2021 (prior to media speculation regarding a stake build by an unknown participant). </p><p>Iress has agreed to grant EQT a 30-day exclusivity period to conduct due diligence. The Iress board also intends to unanimously recommend the proposal pending the entry into a scheme implementation deed and the absence of better offers.</p><div class="content-highlight"><p>Pushing for a better price is part of the M&amp;A game. The Board had rejected EQT’s previous two offers as they did not represent compelling value. The Board was able to secure a sweetened bid that offers an 8% bump to EQT’s first offer of A$14.80 per share, through a defence strategy that involved hosting an investor day outlining plans to generate shareholder returns through ambitious financial targets. Overall, we think EQT’s latest bid is attractive and will likely succeed. At the last close price of A$5.19, the shares are trading at a 4.7% gross spread to the indicative offer.</p></div>

Iress Ltd (IRE AU) is a financial services software group. Iress revealed a non-binding indicative proposal from EQT to acquire it via a scheme of arrangement. EQT is offering A$15.91 cash per share before franking credits, consisting of a cash consideration of A$15.75 per share and an FY21 interim dividend up to A$0.16 per share. The bid represents a 45.3% premium to the undisturbed share price on 9 June 2021 (prior to media speculation regarding a stake build by an unknown participant). Iress has agreed to grant EQT a 30-day exclusivity period to conduct due diligence. The Iress board also intends to unanimously recommend the proposal pending the entry into a scheme implementation deed and the absence of better offers.Pushing for a better price is part of the M&amp;A game. The Board had rejected EQT’s previous two offers as they did not represent compelling value. The Board was able to secure a sweetened bid that offers an 8% bump to EQT’s first offer of A$14.80 per share, through a defence strategy that involved hosting an investor day outlining plans to generate shareholder returns through ambitious financial targets. Overall, we think EQT’s latest bid is attractive and will likely succeed. At the last close price of A$5.19, the shares are trading at a 4.7% gross spread to the indicative offer.

<div>
<p>Back on the 29 July, trading and wealth management software provider <a href="https://www.smartkarma.com/entities/iress-ltd" target="_blank" data-smartkarma-citation="entities:15342:1" rel="noopener">Iress Ltd (IRE AU)</a> <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02400486-3A571606?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a> it had received a confidential, unsolicited, non-binding, and indicative proposal from Swedish PE outfit EQT Fund Management via a Scheme of Arrangement at a price range of between A$15.30 and A$15.50 cash per share. EQT had previously fielded an Offer of A$14.80/share on the 18 June.</p>
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<p>Iress' board unanimously concluded that the 4% bump - if using the mid-price of the price range - attached to the latest Proposal was<em> "conditional and did not represent compelling value for Iress shareholders</em>". </p>
<p>In <em><a href="https://skr.ma/2sAsB" target="_blank" rel="noopener">Iress (ASX AU) Bats Away EQT - For Now</a></em>, I suggested getting involved around $14.30/share.</p>
<p>Iress' board has now backed a revised Offer from EQT - but at <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02405676-3A572494?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">$15.91/share</a>, just 3.3% above the previous proposal.</p>
<p>Due diligence, on an exclusive basis, has been granted. </p>
<p>This looks done, but remains non-binding. Plus there is the question mark over why the board was quick to agree to terms such that an additional ~3% becomes "compelling". </p>
</div>
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<p>As always, more below the fold.</p>
</div>


Back on the 29 July, trading and wealth management software provider Iress Ltd (IRE AU) announced it had received a confidential, unsolicited, non-binding, and indicative proposal from Swedish PE outfit EQT Fund Management via a Scheme of Arrangement at a price range of between A$15.30 and A$15.50 cash per share. EQT had previously fielded an Offer of A$14.80/share on the 18 June.


Iress' board unanimously concluded that the 4% bump - if using the mid-price of the price range - attached to the latest Proposal was "conditional and did not represent compelling value for Iress shareholders". 
In Iress (ASX AU) Bats Away EQT - For Now, I suggested getting involved around $14.30/share.
Iress' board has now backed a revised Offer from EQT - but at $15.91/share, just 3.3% above the previous proposal.
Due diligence, on an exclusive basis, has been granted. 
This looks done, but remains non-binding. Plus there is the question mark over why the board was quick to agree to terms such that an additional ~3% becomes "compelling". 


As always, more below the fold.


Iress (IRE AU) Accepts EQT's Latest Proposal

<p>The bidding for companies in Australia's technology sector continues.</p>
<p>Trading and wealth management software provider <a href="https://www.smartkarma.com/entities/iress-ltd" target="_blank" data-smartkarma-citation="entities:15342:1" rel="noopener">Iress Ltd (IRE AU)</a> <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02400486-3A571606?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a> this morning it had received a confidential, unsolicited, non-binding, and indicative proposal from Swedish PE outfit EQT Fund Management via a Scheme of Arrangement at a price range of between A$15.30 and A$15.50 cash per share.</p>
<p>EQT had previously fielded an Offer of A$14.80/share on the 18 June.</p>
<p>Iress' board unanimously concluded that the Proposal was "<em>conditional and did not represent compelling value for Iress shareholders</em>". But the board was:</p>
<blockquote>
<p>prepared to provide it with access to limited non-public information so EQT can develop a proposal that is capable of being recommended to shareholders.</p>
</blockquote>
<p>Iress closed up 15% today, but still 7% below the mid-point of the Indicative Offer price range.</p>
<div>
<p>As always, more below the fold.</p>
</div>

The bidding for companies in Australia's technology sector continues.
Trading and wealth management software provider Iress Ltd (IRE AU) announced this morning it had received a confidential, unsolicited, non-binding, and indicative proposal from Swedish PE outfit EQT Fund Management via a Scheme of Arrangement at a price range of between A$15.30 and A$15.50 cash per share.
EQT had previously fielded an Offer of A$14.80/share on the 18 June.
Iress' board unanimously concluded that the Proposal was "conditional and did not represent compelling value for Iress shareholders". But the board was:

prepared to provide it with access to limited non-public information so EQT can develop a proposal that is capable of being recommended to shareholders.

Iress closed up 15% today, but still 7% below the mid-point of the Indicative Offer price range.

As always, more below the fold.


Equity Analyst (Index Flows & Special Situations), Quiddity Advisors

Janaghan Jeyakumar, CFA

Equity Analyst (Index Flows & Special Situations)

<p>On 1st June 2020, Australian financial markets software company <a href="https://www.smartkarma.com/entities/iress-ltd" target="_blank" data-smartkarma-citation="entities:15342:1" rel="noopener">Iress Ltd (IRE AU)</a><a href="https://ausstocks.com.au/wp-content/uploads/austocks/ovh/2020_06_01_OVH_03913a5ad5601454cfa039860f349c80.pdf" target="_blank" rel="noopener">signed an scheme implementation agreement</a> to acquire 100% of <a href="https://www.smartkarma.com/entities/onevue-holdings-ltd" target="_blank" data-smartkarma-citation="entities:24327:1" rel="noopener">Onevue Holdings (OVH AU)</a> valuing the company at a market cap of A$107mn. </p><p>The Acquirer <a href="https://ausstocks.com.au/wp-content/uploads/austocks/ovh/2020_06_01_OVH_ad478f7597d4bdfff9cec4e9f7adae99.pdf" target="_blank" rel="noopener">announced</a> they will also be simultaneously raising AS$170mn of equity but the OneVue Deal will not be conditional on financing. </p><p>The Deal currently requires approvals from Target Shareholders and regulatory authorities. </p><p>The Offer Price is A$0.40/share and the consideration will be in the form of cash. OneVue's shares last closed at A$0.37 translating to a gross spread of 8.1% with the transaction expected to complete by the end of September 2020. </p><p>In this insight, we take a look at the potential risks associated with the Deal. </p>

On 1st June 2020, Australian financial markets software company Iress Ltd (IRE AU)signed an scheme implementation agreement to acquire 100% of Onevue Holdings (OVH AU) valuing the company at a market cap of A$107mn. The Acquirer announced they will also be simultaneously raising AS$170mn of equity but the OneVue Deal will not be conditional on financing. The Deal currently requires approvals from Target Shareholders and regulatory authorities. The Offer Price is A$0.40/share and the consideration will be in the form of cash. OneVue's shares last closed at A$0.37 translating to a gross spread of 8.1% with the transaction expected to complete by the end of September 2020. In this insight, we take a look at the potential risks associated with the Deal. 

OneVue-Iress: Australian Deal Trading Wide

Australia

Iress Limited provides real-time information services to businesses that specialize in the equity, equity options and future information markets in Australia and New Zealand. The Group supplies a range of pricing data, charting, news and equity and equity derivatives and also offers real-time trading tools, including a domestic order routing product and financial

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Iress Ltd (IRE AU)

Aussie Pharma (API AU): Wesfarmer's Sweetened (Yet Indicative) Offer

Trading at a 5.8%/15.8% gross/annualised spread, assuming mid-Feb completion. But it's not a super liquid arb situation. Plus this remains a non...

David Blennerhassett

EQT a Step Closer to Acquiring Iress

EQT is offering A$15.91 cash per share. The Iress board intends to unanimously recommend the proposal pending the entry into a SID. At the last...

Arun George

Iress (IRE AU) Accepts EQT's Latest Proposal

Currently trading at a 5.4%/13.4% gross/annualised spread, assuming five months from hereon to complete. That looks like a reasonable price level...

David Blennerhassett

Iress (ASX AU) Bats Away EQT - For Now

I would be picking Iress up on any weakness. This space is attracting a lot of interested parties. However, this is still a non-binding situation.

David Blennerhassett

OneVue-Iress: Australian Deal Trading Wide

On 1st June 2020, Australian financial markets software company Iress Ltd (IRE AU)signed an scheme implementation agreement to acquire 100%...

Janaghan Jeyakumar, CFA

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