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

Event-Driven

<ul>
<li>A consortium comprising ADNOC and Carlyle have offered US$5.76/share (A$8.8807/share) to take <a href="https://www.smartkarma.com/entities/santos-ltd" target="_blank" data-smartkarma-citation="entities:711:1" rel="noopener">Santos Ltd (STO AU)</a> private. That values <a href="https://www.smartkarma.com/entities/santos-ltd" target="_blank" data-smartkarma-citation="entities:711:1" rel="noopener">Santos</a> equity at A$28.8bn and an Enterprise Value of A$36bn.</li>
<li>With the offer price at a premium of 28%-44% to last and VWAPs, and the Board supporting the offer, this looks like a done deal.</li>
<li>
<a href="https://www.smartkarma.com/entities/santos-ltd" target="_blank" data-smartkarma-citation="entities:711:1" rel="noopener">Santos Ltd (STO AU)</a> is a member of all the major S&amp;P/ASX indices and there will be ad hoc inclusions to the indices at the time of the delisting.</li>
</ul>


A consortium comprising ADNOC and Carlyle have offered US$5.76/share (A$8.8807/share) to take Santos Ltd (STO AU) private. That values Santos equity at A$28.8bn and an Enterprise Value of A$36bn.
With the offer price at a premium of 28%-44% to last and VWAPs, and the Board supporting the offer, this looks like a done deal.

Santos Ltd (STO AU) is a member of all the major S&amp;P/ASX indices and there will be ad hoc inclusions to the indices at the time of the delisting.


Santos (STO AU): XRG Consortium's Big Offer; Index Impact

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

James Hardie Industries Plc / Event-Driven

<ul>
<li>On the 24th March, building materials outfit <a href="https://www.smartkarma.com/entities/james-hardie-industries-plc" target="_blank" data-smartkarma-citation="entities:10937:1" rel="noopener">James Hardie Industries Plc (JHX AU)</a> announced a cash/scrip merger with decking manufacturer <a href="https://www.smartkarma.com/entities/azek-co-inc-the" target="_blank" data-smartkarma-citation="entities:36947:1" rel="noopener">Azek (AZEK US)</a>.</li>
<li>JHX is offering 1.034 new JHX shares plus US$26.45/share in cash for each Azek share, or an implied $56.88 all-in price (at the time), a punchy 37.4% premium to undisturbed. </li>
<li>Apart from pushback on pricing for Azek, JHX shareholders have voiced opposition over the ASX granting a waiver, allowing the merger to proceed without a vote from JHX shareholders</li>
</ul>


On the 24th March, building materials outfit James Hardie Industries Plc (JHX AU) announced a cash/scrip merger with decking manufacturer Azek (AZEK US).
JHX is offering 1.034 new JHX shares plus US$26.45/share in cash for each Azek share, or an implied $56.88 all-in price (at the time), a punchy 37.4% premium to undisturbed. 
Apart from pushback on pricing for Azek, JHX shareholders have voiced opposition over the ASX granting a waiver, allowing the merger to proceed without a vote from JHX shareholders


James Hardie (JHX AU)/Azek (AZEK US) Merger: Risky, Expensive, And Poor Governance

<ul>
<li>Brookfield and EIG/MidOcean are Offering <a href="https://www.smartkarma.com/entities/origin-energy-ltd" target="_blank" data-smartkarma-citation="entities:797:1" rel="noopener">Origin Energy (ORG AU)</a> shareholders $9.00/share, a 54.9% premium to last close, by way of a Scheme. The Offer is non-binding and indicative.</li>
<li>Negotiations kicked off at $7.95 for the LNG developer in early August. Exclusive due diligence has been granted. </li>
<li>A firm offer will be contingent on ACCC and FIRB approval. Such a takeover may actually play into the Albanese government's future energy plans.</li>
</ul>


Brookfield and EIG/MidOcean are Offering Origin Energy (ORG AU) shareholders $9.00/share, a 54.9% premium to last close, by way of a Scheme. The Offer is non-binding and indicative.
Negotiations kicked off at $7.95 for the LNG developer in early August. Exclusive due diligence has been granted. 
A firm offer will be contingent on ACCC and FIRB approval. Such a takeover may actually play into the Albanese government's future energy plans.


Origin Energy: Brookfield's Energy Transition Bet

<ul>
<li>
<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>'s Second Court hearing is scheduled for 15 June and the stock is likely to stop trading at the close on that day. </li>
<li>Estimated passive tracker selling is 62m shares (A$809m; 31.2 days of ADV) of <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> and that could open up some arb opportunities.</li>
<li>We expect <a href="https://www.smartkarma.com/entities/whitehaven-coal-ltd" target="_blank" data-smartkarma-citation="entities:14253:1" rel="noopener">Whitehaven Coal (WHC AU)</a> will be added to the S&amp;P/ASX 100 Index, while <a href="https://www.smartkarma.com/entities/coronado-global-resources-inc" target="_blank" data-smartkarma-citation="entities:27473:1" rel="noopener">Coronado Global Resources Inc (CRN AU)</a> could be added 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>. </li>
</ul>



Crown Resorts (CWN AU)'s Second Court hearing is scheduled for 15 June and the stock is likely to stop trading at the close on that day. 
Estimated passive tracker selling is 62m shares (A$809m; 31.2 days of ADV) of Crown Resorts (CWN AU) and that could open up some arb opportunities.
We expect Whitehaven Coal (WHC AU) will be added to the S&amp;P/ASX 100 Index, while Coronado Global Resources Inc (CRN AU) could be added to the S&amp;P/ASX 200 (AS51 INDEX). 


Crown Resorts (CWN AU): Passive Sell Flow and Potential ASX100/200 Replacements

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

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.

<ul>
<li>BHP shareholders will receive US$18bn worth of Woodside petroleum shares on 1st Jun 2022, post the completion of the merger. Block, worth US$1.5bn, could be sold in early June.</li>
<li>As a part of the distribution, some shares belonging to ineligible and other small shareholders will have to be sold by the sales agent, JPM. </li>
<li>In this note, we will look at the possible deal dynamics and the overall background of the deal.</li>
</ul>


BHP shareholders will receive US$18bn worth of Woodside petroleum shares on 1st Jun 2022, post the completion of the merger. Block, worth US$1.5bn, could be sold in early June.
As a part of the distribution, some shares belonging to ineligible and other small shareholders will have to be sold by the sales agent, JPM. 
In this note, we will look at the possible deal dynamics and the overall background of the deal.


BHP Woodside Distribution - Could Be a Large Block (~US$1bn) In Early June

Australia

Oil Search Limited explores for and produces gas and oil through operations in Papua New Guinea.  The Company's activities are located in the Papuan Highlands which include the Kutubu, Hides, and Gobe oil and gas projects.

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Oil Search Ltd (OSH AU)

Santos (STO AU): XRG Consortium's Big Offer; Index Impact

A consortium has offered US$5.76/share to take Santos private. That values equity at A$28.8bn and an EV of A$36bn. There will be ad hoc adds to the...

Brian Freitas

James Hardie (JHX AU)/Azek (AZEK US) Merger: Risky, Expensive, And Poor Governance

On balance, this isn’t inherently a "bad" deal,; but risky and expensive. Yet, JHX is down a massive 23% on the news. I think JHX has probably...

David Blennerhassett

Origin Energy: Brookfield's Energy Transition Bet

The Offer remains non-binding. I think a firm Offer will get up - but the final pricing may change subject to discussions with the government on...

David Blennerhassett

Crown Resorts (CWN AU): Passive Sell Flow and Potential ASX100/200 Replacements

Crown Resorts has received all reg approvals. The court hearing takes place 15 Jun & the stock could stop trading at the close. There will be large...

Brian Freitas

BHP Woodside Distribution - Could Be a Large Block (~US$1bn) In Early June

BHP shareholders will receive US$18bn worth of Woodside petroleum shares on 1st Jun 2022, post the completion of the merger. Block, worth US$1.5bn,...

Sumeet Singh

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