Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Yesterday, <strong><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></strong> made a <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02750847-2A1492843?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">$3bn scrip offer</a> Aussie-listed equities manager <strong><a href="https://www.smartkarma.com/entities/perpetual-ltd" target="_blank" data-smartkarma-citation="entities:599:1" rel="noopener">Perpetual Ltd (PPT AU).</a></strong>
</li>
<li>Under the indicative terms, PPT shareholders receive one-third of the Offer in SOL shares, and two-thirds in PPT's asset management arm via an in-specie spin-off.</li>
<li>PPT <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02750947-2A1492987?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">rejected</a> the proposal as it undervalues PPT, its corporate trust and wealth management businesses; and it offers SOL shares as consideration. But the Offer is not without merit.</li>
</ul>


Yesterday, Washington H. Soul Pattinson and Co. Ltd (SOL AU) made a $3bn scrip offer Aussie-listed equities manager Perpetual Ltd (PPT AU).

Under the indicative terms, PPT shareholders receive one-third of the Offer in SOL shares, and two-thirds in PPT's asset management arm via an in-specie spin-off.
PPT rejected the proposal as it undervalues PPT, its corporate trust and wealth management businesses; and it offers SOL shares as consideration. But the Offer is not without merit.


Oh, The Irony! Perpetual Rejects Soul Patts' "Fair" Offer

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

<ul>
<li>At the December rebalance, there will be one change for the ASX100 while there will be five changes to 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>. All changes were expected.</li>
<li>Nearly all inclusions and exclusions have over 2 days of ADV to trade and that increases significantly on some stocks. The volatility on the inclusions has been extremely high.</li>
<li>There could be another change announced in the coming week depending on results of the <a href="https://www.smartkarma.com/entities/oil-search-ltd" target="_blank" data-smartkarma-citation="entities:773:1" rel="noopener">Oil Search Ltd (OSH AU)</a> Scheme Meeting for the merger with <a href="https://www.smartkarma.com/entities/santos-ltd" target="_blank" data-smartkarma-citation="entities:711:1" rel="noopener">Santos Ltd (STO AU)</a>.</li>
</ul>


At the December rebalance, there will be one change for the ASX100 while there will be five changes to the S&amp;P/ASX 200 (AS51 INDEX). All changes were expected.
Nearly all inclusions and exclusions have over 2 days of ADV to trade and that increases significantly on some stocks. The volatility on the inclusions has been extremely high.
There could be another change announced in the coming week depending on results of the Oil Search Ltd (OSH AU) Scheme Meeting for the merger with Santos Ltd (STO AU).


ASX100/​200 Dec21 Index Rebalance: Kangaroos Loose in the Top Paddock

Travis Lundy

Washington H. Soul Pattinson and Co. Ltd / Event-Driven

<ul>
<li>
<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> executed its merger with <a href="https://www.smartkarma.com/entities/milton-corp-ltd" target="_blank" data-smartkarma-citation="entities:29090:1" rel="noopener">Milton Corp Ltd (MLT AU)</a> in late September, with the delivered shares fungible in early October.</li>
<li>Since then, there has been steady selling of WHSP, possibly in the form of flowback, and the Combined Entity Premium to NAV has shrunk materially since then.</li>
<li>The next couple of days should see announcements of increased weightings in indices, which means a big buy later in December.</li>
</ul>



Washington H. Soul Pattinson and Co. Ltd (SOL AU) executed its merger with Milton Corp Ltd (MLT AU) in late September, with the delivered shares fungible in early October.
Since then, there has been steady selling of WHSP, possibly in the form of flowback, and the Combined Entity Premium to NAV has shrunk materially since then.
The next couple of days should see announcements of increased weightings in indices, which means a big buy later in December.


<p>The two oldest listed investment companies in Australia - <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") and <a href="https://www.smartkarma.com/entities/milton-corp-ltd" target="_blank" data-smartkarma-citation="entities:29090:1" rel="noopener">Milton Corp Ltd (MLT AU)</a> - decided in late Q2 to merge, and then they merged in Q3, with Milton shares delisting about a month ago and the deal becoming effective on 5 October - about two weeks ago. </p><p>That was accompanied by one major index change, which caused the stock to go up as those pre-positioning pushed WHSP shares higher, then down, and all the index inclusion volume traded below A$36/share, then they went back up in a post-inclusion squeeze, then they have slowly come back down in lower volume.  </p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/236/420/original/Screenshot+2021-10-20+at+10.48.36+PM.png?1634741340" class="editor-image img-responsive" data-smartkarma-image-id="236420"></figure></section><p></p><p>There are, of course, more events to come.</p><p>And there have been other interesting developments too. And those are worth looking at.</p><p>More below the fold. </p>

The two oldest listed investment companies in Australia - Washington H. Soul Pattinson and Co. Ltd (SOL AU) ("WHSP") and Milton Corp Ltd (MLT AU) - decided in late Q2 to merge, and then they merged in Q3, with Milton shares delisting about a month ago and the deal becoming effective on 5 October - about two weeks ago. That was accompanied by one major index change, which caused the stock to go up as those pre-positioning pushed WHSP shares higher, then down, and all the index inclusion volume traded below A$36/share, then they went back up in a post-inclusion squeeze, then they have slowly come back down in lower volume.  There are, of course, more events to come.And there have been other interesting developments too. And those are worth looking at.More below the fold. 

Washington H Soul Pattinson - Flows, Valuations, and Next Steps

<p>The morning of the 16th of September 2021, <a href="https://www.smartkarma.com/entities/milton-corp-ltd" target="_blank" data-smartkarma-citation="entities:29090:1" rel="noopener">Milton Corp Ltd (MLT AU)</a> announced an expected A$0.37/share fully-franked special dividend (which should produce A$0.15857/share of franking credits) to go ex- on 21 September, which coincidentally should be the last day of trading for the stock.</p>
<p><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> shares fell more than 5% on the day, heading lower early, and staying low throughout the day.</p>
<section class="figure">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/230/191/original/Screenshot+2021-09-16+at+7.14.31+PM.png?1631790887" class="editor-image img-responsive" data-smartkarma-image-id="230191"></figure>
<p></p>
</section>
<p>It is not clear why, but one can make some guesses.</p>
<p>More below the fold.</p>
<hr>
<p>And for the history on this...</p>
<div>
<table class="table table-striped">
<tbody>
<tr>
<td colspan="2" style="width: 539pt;">
<h2>History of Insights on the Situation</h2>
</td>
</tr>
<tr>
<td><strong>Date</strong></td>
<td><strong>Title</strong></td>
</tr>
<tr>
<td>22 Jun 21</td>
<td><a href="https://www.smartkarma.com/insights/milton-merger-is-a-most-marvelous-arb" target="_blank" rel="noopener">Milton Merger Is A Most Marvelous Arb</a></td>
</tr>
<tr>
<td>24 Jun 21</td>
<td><a href="https://www.smartkarma.com/insights/milton-whsp-merger-index-implications-and-the-marvelous-arb" target="_blank" rel="noopener">Milton-WHSP Merger Index Implications and the Marvelous Arb</a></td>
</tr>
<tr>
<td>21 Jul 21</td>
<td><a href="https://www.smartkarma.com/insights/milton-s-marvelous-arm-meanders-along-marvelously" target="_blank" rel="noopener">Milton’s Marvelous Arb Meanders Along... Marvelously</a></td>
</tr>
<tr>
<td>5 Aug 21</td>
<td><a href="https://www.smartkarma.com/insights/the-still-marvelous-milton-arb-confirms-its-schedule-much-marvelousness-to-come" target="_blank" rel="noopener">The STILL MARVELOUS Milton Arb Confirms Its Schedule - Much Marvelousness to Come</a></td>
</tr>
<tr>
<td>12 Aug 21</td>
<td><a href="https://www.smartkarma.com/insights/the-magnality-of-the-marvelous-milton-merger-makes-a-moribund-march-to-metaphysis-it-s-mirific" target="_blank" rel="noopener">The Magnality of the Marvelous Milton Merger Makes a Moribund March To Metaphysis (It’s Mirific!)</a></td>
</tr>
<tr>
<td>25 Aug 21</td>
<td>
<a href="https://www.smartkarma.com/insights/marvelous-milton-making-its-move-new-30yr-highs-on-both-stocks" target="_blank" data-smartkarma-citation="insights:56651" rel="noopener">Marvelous Milton Making Its Move - New 30yr Highs On Both Stocks</a> </td>
</tr>
<tr>
<td>3 Sep 21</td>
<td>
<a href="https://www.smartkarma.com/insights/marvelous-milton-merger-mapping-mabbled-ratio-done-now-for-the-hard-part" target="_blank" data-smartkarma-citation="insights:57110" rel="noopener">Marvelous Milton Merger Mapping Mabbled: Ratio Done, Now For The Hard Part</a> </td>
</tr>
<tr>
<td>10 Sep 21</td>
<td>
<a href="https://www.smartkarma.com/insights/marvelous-milton-moves-to-merger-and-flows-lots-of-flows" target="_blank" data-smartkarma-citation="insights:57463" rel="noopener">Marvelous Milton Moves to Merger and Flows, Lots of Flows</a> </td>
</tr>
</tbody>
</table>
</div>
<div>
<p></p>
</div>
<div>
<div></div>
</div>

The morning of the 16th of September 2021, Milton Corp Ltd (MLT AU) announced an expected A$0.37/share fully-franked special dividend (which should produce A$0.15857/share of franking credits) to go ex- on 21 September, which coincidentally should be the last day of trading for the stock.
Washington H. Soul Pattinson and Co. Ltd (SOL AU) shares fell more than 5% on the day, heading lower early, and staying low throughout the day.




It is not clear why, but one can make some guesses.
More below the fold.

And for the history on this...





History of Insights on the Situation



Date
Title


22 Jun 21
Milton Merger Is A Most Marvelous Arb


24 Jun 21
Milton-WHSP Merger Index Implications and the Marvelous Arb


21 Jul 21
Milton’s Marvelous Arb Meanders Along... Marvelously


5 Aug 21
The STILL MARVELOUS Milton Arb Confirms Its Schedule - Much Marvelousness to Come


12 Aug 21
The Magnality of the Marvelous Milton Merger Makes a Moribund March To Metaphysis (It’s Mirific!)


25 Aug 21

Marvelous Milton Making Its Move - New 30yr Highs On Both Stocks 


3 Sep 21

Marvelous Milton Merger Mapping Mabbled: Ratio Done, Now For The Hard Part 


10 Sep 21

Marvelous Milton Moves to Merger and Flows, Lots of Flows 











Marvelous Milton and WHSP (SOL AU) Index Event Prepositioning Analysis

Australia

Milton Corporation Limited is a listed investment company incorporated in Australia.  The Fund aims to generate an increasing income stream in the form of fully franked dividends by investing in a portfolio that will also provide growth.  The Fund invests in companies, trusts, fixed interest securities (including mortgages), and property.

Milton Corp Ltd (MLT AU)

Oh, The Irony! Perpetual Rejects Soul Patts' "Fair" Offer

PPT is up 6.3% following the disclosure of SOL's approach. I'd be inclined to be long PPT here. SOL may up the ante. And PPT is trading bleow...

David Blennerhassett

ASX100/200 Dec21 Index Rebalance: Kangaroos Loose in the Top Paddock

There is 1 change to the ASX100 and 5 changes to the ASX200 index. The adds have outperformed the deletes over the year and are trading at...

Brian Freitas

Soul Patts Index Upweights Coming

WHSP merged with Milton and subsequently saw its PNAV drop relatively sharply. P/NAV is now at its lowest in over a year, helped by different...

Travis Lundy

Washington H Soul Pattinson - Flows, Valuations, and Next Steps

Washington H Soul Pattinson has absorbed the Milton Portfolio and issued new shares to Milton shareholders. The WHSP Premium to NTA has fallen to 9...

Travis Lundy

Marvelous Milton and WHSP (SOL AU) Index Event Prepositioning Analysis

WHSP had a bad day on the 16th (futures and options expiry). On a net basis, the last three days have seen large bid-hitting on SOL, but...

Travis Lundy

Oh, The Irony! Perpetual Rejects Soul Patts' "Fair" Offer

PPT is up 6.3% following the disclosure of SOL's approach. I'd be inclined to be long PPT here. SOL may up the ante. And PPT is trading bleow...

David Blennerhassett

ASX100/​200 Dec21 Index Rebalance: Kangaroos Loose in the Top Paddock

There is 1 change to the ASX100 and 5 changes to the ASX200 index. The adds have outperformed the deletes over the year and are trading at...

Brian Freitas

Soul Patts Index Upweights Coming

WHSP merged with Milton and subsequently saw its PNAV drop relatively sharply. P/NAV is now at its lowest in over a year, helped by different...

Travis Lundy

Washington H Soul Pattinson - Flows, Valuations, and Next Steps

Washington H Soul Pattinson has absorbed the Milton Portfolio and issued new shares to Milton shareholders. The WHSP Premium to NTA has fallen to 9...

Travis Lundy

Marvelous Milton and WHSP (SOL AU) Index Event Prepositioning Analysis

WHSP had a bad day on the 16th (futures and options expiry). On a net basis, the last three days have seen large bid-hitting on SOL, but...

Travis Lundy

ASX100/200 Dec21 Index Rebalance: Kangaroos Loose in the Top Paddock