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/arcadium-lithium-plc" target="_blank" data-smartkarma-citation="entities:40438:1" rel="noopener">Arcadium Lithium (LTM AU)</a> has disclosed a binding offer from <a href="https://www.smartkarma.com/entities/rio-tinto-plc" target="_blank" data-smartkarma-citation="entities:22114:1" rel="noopener">Rio Tinto PLC (RIO LN)</a> at US$5.85 per share, a 90% premium to the undisturbed price of US$3.08 (4 October).</li>
<li>The offer is attractive compared to analyst price targets and peer multiples but unattractive compared to cyclical low timing and precedent transactions.</li>
<li>The shareholder structure requires an activist to disrupt the vote. The long-dated offer provides optionality on a bump if lithium prices materially re-rates. </li>
</ul>



Arcadium Lithium (LTM AU) has disclosed a binding offer from Rio Tinto PLC (RIO LN) at US$5.85 per share, a 90% premium to the undisturbed price of US$3.08 (4 October).
The offer is attractive compared to analyst price targets and peer multiples but unattractive compared to cyclical low timing and precedent transactions.
The shareholder structure requires an activist to disrupt the vote. The long-dated offer provides optionality on a bump if lithium prices materially re-rates. 


Arcadium Lithium (ALTM US/LTM AU): Rio’s Binding Proposal

<ul>
<li>In response to media reports, <a href="https://www.smartkarma.com/entities/arcadium-lithium-plc" target="_blank" data-smartkarma-citation="entities:40438:1" rel="noopener">Arcadium Lithium (LTM AU)</a> confirmed receiving a non-binding proposal from <a href="https://www.smartkarma.com/entities/rio-tinto-ltd" target="_blank" data-smartkarma-citation="entities:13:1" rel="noopener">Rio Tinto Ltd (RIO AU)</a>. No terms were disclosed.</li>
<li>According to press reports, Rio aims to acquire Arcadium at a valuation range of US$4-6 billion (A$5.9-8.8 billion). Blackwattle thinks a fair price is closer to US$8 billion. </li>
<li>The rumoured valuation range is unattractive and arguably a bear case valuation assuming no significant recovery in lithium prices.  </li>
</ul>


In response to media reports, Arcadium Lithium (LTM AU) confirmed receiving a non-binding proposal from Rio Tinto Ltd (RIO AU). No terms were disclosed.
According to press reports, Rio aims to acquire Arcadium at a valuation range of US$4-6 billion (A$5.9-8.8 billion). Blackwattle thinks a fair price is closer to US$8 billion. 
The rumoured valuation range is unattractive and arguably a bear case valuation assuming no significant recovery in lithium prices.  


Arcadium Lithium (ALTM US/LTM AU): Rio Tinto’s Rumoured Bid Is Light

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>
<a href="https://www.smartkarma.com/entities/rio-tinto-ltd" target="_blank" data-smartkarma-citation="entities:13:1" rel="noopener">Rio Tinto Ltd (RIO AU)</a> has <a href="https://announcements.asx.com.au/asxpdf/20241007/pdf/068tbs6fnf3fnj.pdf" target="_blank" rel="noopener">confirmed</a> it has approached <a href="https://www.smartkarma.com/entities/arcadium-lithium-plc" target="_blank" data-smartkarma-citation="entities:40438:1" rel="noopener">Arcadium Lithium (LTM AU)/</a><a href="https://www.smartkarma.com/entities/arcadium-lithium-plc-2f9bfa3a-65a7-41f9-a157-e59603846420" target="_blank" data-smartkarma-citation="entities:40439:1" rel="noopener">(ALTM US)</a> regarding a potential acquisition. </li>
<li>No Offer Price has been announced; however a proposed bid with a 30%+ premium, on top of last week's 11% bounce, has been rumoured. That implies a price of ~$6/share.</li>
<li>Given shares were trading ~A$10/share in January this year, one Aussie-based fund reckons such an Offer would be highly opportunistic; and that a bid 2.5-3x higher is reasonable. </li>
</ul>



Rio Tinto Ltd (RIO AU) has confirmed it has approached Arcadium Lithium (LTM AU)/(ALTM US) regarding a potential acquisition. 
No Offer Price has been announced; however a proposed bid with a 30%+ premium, on top of last week's 11% bounce, has been rumoured. That implies a price of ~$6/share.
Given shares were trading ~A$10/share in January this year, one Aussie-based fund reckons such an Offer would be highly opportunistic; and that a bid 2.5-3x higher is reasonable. 


Rio Tinto Taps Arcadium As Lithium Prices Sag

Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

DZT Research

DZT Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

Quantitative Analysis

<ul>
<li>We analyzed the changes in short interest of ASX Stocks as of Sep 13th (reported today) which has an aggregated short interest worth USD25.4bn.</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 Mineral Resources, Westpac, Gpt, Australian Clinical Labs, Aristocrat Leisure, James Hardie Industries Plc.</li>
</ul>


We analyzed the changes in short interest of ASX Stocks as of Sep 13th (reported today) which has an aggregated short interest worth USD25.4bn.
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 Mineral Resources, Westpac, Gpt, Australian Clinical Labs, Aristocrat Leisure, James Hardie Industries Plc.


ASX Short Interest Weekly (Sep 13th): Mineral Resources, Westpac, Gpt, Australian Clinical Labs

<ul>
<li>Back on the 15th August, lithium play <a href="https://www.smartkarma.com/entities/latin-resources-ltd" target="_blank" data-smartkarma-citation="entities:8770:1" rel="noopener">Latin Resources (LRS AU)</a> entered into a<a href="https://announcements.asx.com.au/asxpdf/20240815/pdf/066mpcs6zd41jz.pdf" target="_blank" rel="noopener"> Scheme</a> with significantly larger peer, <a href="https://www.smartkarma.com/entities/pilbara-minerals-ltd" target="_blank" data-smartkarma-citation="entities:7460:1" rel="noopener">Pilbara Minerals (PLS AU)</a>. Timing appears fortuitous. </li>
<li>PLS is offering 0.07 new PLS shares for each LRS share held.  LRS shareholders will own ~6.4% of the combined entity. LRS' largest shareholder, José Luis Manzano (7.9%), is supportive. </li>
<li>The scrip terms back out an implied price of A$0.20/share or a 67% premium to last close. This is done. And trading accordingly. Expected implementation late November, early December.</li>
</ul>


Back on the 15th August, lithium play Latin Resources (LRS AU) entered into a Scheme with significantly larger peer, Pilbara Minerals (PLS AU). Timing appears fortuitous. 
PLS is offering 0.07 new PLS shares for each LRS share held.  LRS shareholders will own ~6.4% of the combined entity. LRS' largest shareholder, José Luis Manzano (7.9%), is supportive. 
The scrip terms back out an implied price of A$0.20/share or a 67% premium to last close. This is done. And trading accordingly. Expected implementation late November, early December.


Latin Resources (LRS AU)'s Scheme With Pilbara Minerals

Australia

Liontown Resources Ltd. explores for and mines base metals.

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Liontown Resources (LTR AU)

Arcadium Lithium (ALTM US/LTM AU): Rio’s Binding Proposal

The offer is not a knockout bid but the shareholder structure requires an activist to disrupt the vote. The long-dated offer provides optionality...

Arun George

Arcadium Lithium (ALTM US/LTM AU): Rio Tinto’s Rumoured Bid Is Light

The rumoured valuation range is unattractive and arguably a bear case valuation assuming no significant recovery in lithium prices.

Arun George

Rio Tinto Taps Arcadium As Lithium Prices Sag

Arcadium IS in play. And the share price has recently rebounded from a multi-year low. I'd be getting involved around here, and on any weakness.

David Blennerhassett

ASX Short Interest Weekly (Sep 13th): Mineral Resources, Westpac, Gpt, Australian Clinical Labs

We analyzed ASX short interest report for the past week and highlight short interest changes in Mineral Resources, Westpac, Gpt, Australian...

Ke Yan, CFA, FRM

Latin Resources (LRS AU)'s Scheme With Pilbara Minerals

Trading tight to terms Take down borrow cheaply on PLS, should the spread widen. Elsewhere, Liontown is trading at A$0.67/share vs. Albemarle's...

David Blennerhassett

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