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/pendal-group-ltd" target="_blank" data-smartkarma-citation="entities:15795:1" rel="noopener">Pendal Group (PDL AU)</a> entered a scheme implementation deed with <a href="https://www.smartkarma.com/entities/perpetual-ltd" target="_blank" data-smartkarma-citation="entities:599:1" rel="noopener">Perpetual Ltd (PPT AU)</a>. The revised offer - scrip (1 Perpetual share for every 7.5 Pendal share) and cash (A$1.976).</li>
<li>The revised offer throws in an 18.3% higher cash component as a sweetener. The offer implies a healthy acquisition multiple compared to peers.</li>
<li>The offer is subject to shareholder and regulatory approvals. At the last close price, the gross spread to the current offer value of A$5.635 per share is 13.7%.</li>
</ul>



Pendal Group (PDL AU) entered a scheme implementation deed with Perpetual Ltd (PPT AU). The revised offer - scrip (1 Perpetual share for every 7.5 Pendal share) and cash (A$1.976).
The revised offer throws in an 18.3% higher cash component as a sweetener. The offer implies a healthy acquisition multiple compared to peers.
The offer is subject to shareholder and regulatory approvals. At the last close price, the gross spread to the current offer value of A$5.635 per share is 13.7%.


Pendal Gets a Binding Offer from Perpetual

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

<ul>
<li>
<a href="https://www.smartkarma.com/entities/pendal-group-ltd" target="_blank" data-smartkarma-citation="entities:15795:1" rel="noopener">Pendal Group</a> and <a href="https://www.smartkarma.com/entities/perpetual-ltd" target="_blank" data-smartkarma-citation="entities:599:1" rel="noopener">Perpetual Ltd</a> have entered into a SID where Pendal shareholders will receive 1 share of Perpetual for every 7.5 shares in Pendal, plus cash of A$1.976/share.</li>
<li>While this is a premium to the last close and undisturbed prices, it is a discount to longer term prices. The Pendal Board has unanimously recommended the offer though.</li>
<li>In the short-term expect short covering on <a href="https://www.smartkarma.com/entities/pendal-group-ltd" target="_blank" data-smartkarma-citation="entities:15795:1" rel="noopener">Pendal Group (PDL AU)</a> and increased shorts on <a href="https://www.smartkarma.com/entities/perpetual-ltd" target="_blank" data-smartkarma-citation="entities:599:1" rel="noopener">Perpetual Ltd (PPT AU)</a> as arbs step in to close the gap.</li>
</ul>



Pendal Group and Perpetual Ltd have entered into a SID where Pendal shareholders will receive 1 share of Perpetual for every 7.5 shares in Pendal, plus cash of A$1.976/share.
While this is a premium to the last close and undisturbed prices, it is a discount to longer term prices. The Pendal Board has unanimously recommended the offer though.
In the short-term expect short covering on Pendal Group (PDL AU) and increased shorts on Perpetual Ltd (PPT AU) as arbs step in to close the gap.


Pendal Group (PDL AU): Perpetual's Bump Should Get the Deal Done

<ul>
<li>
<a href="https://www.smartkarma.com/entities/perpetual-ltd" target="_blank" data-smartkarma-citation="entities:599:1" rel="noopener">Perpetual Ltd (PPT AU)</a> confirmed today that it is currently in “<em>high-level, preliminary, confidential discussions with Pendal in relation to a potential acquisition.</em>”</li>
<li>Since rejecting Perpetual’s offer, <a href="https://www.smartkarma.com/entities/pendal-group-ltd" target="_blank" data-smartkarma-citation="entities:15795:1" rel="noopener">Pendal Group (PDL AU)</a>’s shares have underperformed most of its peers largely due to poor FUM performance. </li>
<li>Despite today’s pop, Pendal trades at a discount to historical and peer multiples. Perpetual’s renewed interest points to its underlying value. </li>
</ul>



Perpetual Ltd (PPT AU) confirmed today that it is currently in “high-level, preliminary, confidential discussions with Pendal in relation to a potential acquisition.”
Since rejecting Perpetual’s offer, Pendal Group (PDL AU)’s shares have underperformed most of its peers largely due to poor FUM performance. 
Despite today’s pop, Pendal trades at a discount to historical and peer multiples. Perpetual’s renewed interest points to its underlying value. 


Index Rebal/Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal/Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Index Rebalance

<ul>
<li>The S&amp;P ASX June 2022 index changes were announced on 3rd June as I discussed in <a href="https://www.smartkarma.com/insights/s-p-asx-june-2022-rebalance-adds-are-mostly-mining-companies-dels-are-mostly-tech-financials" target="_blank" data-smartkarma-citation="insights:71075" rel="noopener">S&amp;P ASX June 2022 Rebalance: ADDs Are Mostly Mining Companies; DELs Are Mostly Tech/Financials</a>.</li>
<li>With the Inclusion/Exclusion events expected to take place at the end of this week, below is a closer look at the price and volume performance of the candidates so far.</li>
<li>Separately, <a href="https://www.smartkarma.com/entities/crown-resorts-ltd" target="_blank" data-smartkarma-citation="entities:808:1" rel="noopener">Crown Resorts (CWN AU)</a> could get deleted from ASX 100 and ASX 200 in the next few trading days and I have picked out the potential replacements.</li>
</ul>


The S&amp;P ASX June 2022 index changes were announced on 3rd June as I discussed in S&amp;P ASX June 2022 Rebalance: ADDs Are Mostly Mining Companies; DELs Are Mostly Tech/Financials.
With the Inclusion/Exclusion events expected to take place at the end of this week, below is a closer look at the price and volume performance of the candidates so far.
Separately, Crown Resorts (CWN AU) could get deleted from ASX 100 and ASX 200 in the next few trading days and I have picked out the potential replacements.


S&P/​ASX June 2022 Rebal Final Look and Crown Resorts Replacements

<ul>
<li>There is one set of changes to the S&amp;P/ASX 50, one deletion for the S&amp;P/ASX 100, and four adds/ five deletes for the <a href="https://www.smartkarma.com/entities/s-p-asx-200" target="_blank" data-smartkarma-citation="entities:22901:1" rel="noopener">S&amp;P/ASX 200 (AS51 INDEX)</a>. </li>
<li>Passive trackers will need to trade between 2-6 days of ADV on nearly all stocks. Short interest spikes in a few names indicate pre-positioning for the passive flow.</li>
<li>
<a href="https://www.smartkarma.com/entities/core-lithium-ltd" target="_blank" data-smartkarma-citation="entities:14712:1" rel="noopener">Core Lithium Ltd (CXO AU)</a> is a potential inclusion to the MVIS Global Rare Earth/Strategic Metals Index in June and that could add to the passive inflows on the stock.</li>
</ul>


There is one set of changes to the S&amp;P/ASX 50, one deletion for the S&amp;P/ASX 100, and four adds/ five deletes for the S&amp;P/ASX 200 (AS51 INDEX). 
Passive trackers will need to trade between 2-6 days of ADV on nearly all stocks. Short interest spikes in a few names indicate pre-positioning for the passive flow.

Core Lithium Ltd (CXO AU) is a potential inclusion to the MVIS Global Rare Earth/Strategic Metals Index in June and that could add to the passive inflows on the stock.


S&P/​​ASX Index Rebalance (June 2022): Mostly Expected, Some Surprises & Short Interest Spikes

Australia

Magellan Financial Group Ltd operates as an investment management company. The Company invests in global equities and listed infrastructure. Magellan Financial Group serves customers worldwide.

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Magellan Financial (MFG AU)

Pendal Gets a Binding Offer from Perpetual

The offer implies a healthy acquisition multiple. Timing of regulatory approvals a key risk. At the last close price, the gross spread to the...

Arun George

Pendal Group (PDL AU): Perpetual's Bump Should Get the Deal Done

Perpetual has bumped its offer for Pendal & that should be enough to get the deal done. Both stocks have been on a downtrend over the last year and...

Brian Freitas

Perpetual Mulls Another Bid for Pendal

Despite today’s pop, Pendal trades at a discount to historical and peer multiples. Perpetual’s renewed interest points to its underlying value.

Arun George

S&P/ASX June 2022 Rebal Final Look and Crown Resorts Replacements

A final look at the June 2022 rebalance trade for the S&P ASX Indices and a discussion on potential replacements for Crown Resorts

Janaghan Jeyakumar, CFA

S&P/ASX Index Rebalance (June 2022): Mostly Expected, Some Surprises & Short Interest Spikes

Most changes to the indices were expected, there are some surprises & short interest has spiked on some names. CXO could be added to the REMX....

Brian Freitas

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Pendal Gets a Binding Offer from Perpetual

The offer implies a healthy acquisition multiple. Timing of regulatory approvals a key risk. At the last close price, the gross spread to the...

Arun George

Pendal Group (PDL AU): Perpetual's Bump Should Get the Deal Done

Perpetual has bumped its offer for Pendal & that should be enough to get the deal done. Both stocks have been on a downtrend over the last year and...

Brian Freitas

Perpetual Mulls Another Bid for Pendal

Despite today’s pop, Pendal trades at a discount to historical and peer multiples. Perpetual’s renewed interest points to its underlying value.

Arun George

S&P/​ASX June 2022 Rebal Final Look and Crown Resorts Replacements

A final look at the June 2022 rebalance trade for the S&P ASX Indices and a discussion on potential replacements for Crown Resorts

Janaghan Jeyakumar, CFA

S&P/​​ASX Index Rebalance (June 2022): Mostly Expected, Some Surprises & Short Interest Spikes

Most changes to the indices were expected, there are some surprises & short interest has spiked on some names. CXO could be added to the REMX....

Brian Freitas

S&P/ASX June 2022 Rebal Final Look and Crown Resorts Replacements

S&P/ASX Index Rebalance (June 2022): Mostly Expected, Some Surprises & Short Interest Spikes