Index Rebal Trades & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal Trades & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Index Rebalance

<ul>
<li>In this insight, we take a look at the potential index changes for ASX 300, 200, 100, 50, and 20 in the run-up to the March 2024 index review.</li>
<li>I expect one change for ASX 20, one change for ASX 100, and four changes for ASX 200 during the March 2024 index rebal event.</li>
<li>Separately, there could also be one <em>intra</em>-review change for ASX 200 in February 2024.</li>
</ul>


In this insight, we take a look at the potential index changes for ASX 300, 200, 100, 50, and 20 in the run-up to the March 2024 index review.
I expect one change for ASX 20, one change for ASX 100, and four changes for ASX 200 during the March 2024 index rebal event.
Separately, there could also be one intra-review change for ASX 200 in February 2024.


Quiddity Leaderboard ASX Mar 24: Allkem, Newmont, Costa, and Many More

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Event-Driven

<ul>
<li>Yesterday during the day, <a href="https://www.smartkarma.com/entities/allkem-ltd" target="_blank" data-smartkarma-citation="entities:3572:1" rel="noopener">Allkem Ltd (AKE AU)</a> shareholders approved the Scheme and <a href="https://www.smartkarma.com/entities/livent-corp" target="_blank" data-smartkarma-citation="entities:27434:1" rel="noopener">Livent (LTHM US)</a> shareholders approved the merger. The deal is done. Allkem last trades 21 Dec.</li>
<li>NEWCO starts trading 4 January in the US but the Arcadium Lithium CDIs start trading 22 Dec in Australia. S&amp;P/ASX announced they will replace Allkem in the ASX200.</li>
<li>But I have been asked for a breakdown of flows and timing again, so I have put it into a handy table which I hope makes it less confusing.</li>
</ul>


Yesterday during the day, Allkem Ltd (AKE AU) shareholders approved the Scheme and Livent (LTHM US) shareholders approved the merger. The deal is done. Allkem last trades 21 Dec.
NEWCO starts trading 4 January in the US but the Arcadium Lithium CDIs start trading 22 Dec in Australia. S&amp;P/ASX announced they will replace Allkem in the ASX200.
But I have been asked for a breakdown of flows and timing again, so I have put it into a handy table which I hope makes it less confusing.


Allkem+Livent=Arcadium : Expected Index Flows

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.

Lithium Power International / Event-Driven

<ul>
<li>The <a href="https://www.smartkarma.com/entities/lithium-power-international" target="_blank" data-smartkarma-citation="entities:30603:1" rel="noopener">Lithium Power International (LPI AU)</a> IE considers Codelco’s A$0.57 offer fair and reasonable as it is above the midpoint of its A$0.30-0.68 per share valuation range. </li>
<li>The scheme is conditional on FIRB approval, which should be forthcoming as LPI’s assets are outside Australia in Chile.</li>
<li>Irrevocables represent 32.05% of outstanding shares. At the last close and for the 16 February payment, the gross/annualised spread was 3.6%/26.3%.</li>
</ul>


The Lithium Power International (LPI AU) IE considers Codelco’s A$0.57 offer fair and reasonable as it is above the midpoint of its A$0.30-0.68 per share valuation range. 
The scheme is conditional on FIRB approval, which should be forthcoming as LPI’s assets are outside Australia in Chile.
Irrevocables represent 32.05% of outstanding shares. At the last close and for the 16 February payment, the gross/annualised spread was 3.6%/26.3%.


Lithium Power (LPI AU): Scheme Vote on 23 January

<ul>
<li>
<a href="https://www.smartkarma.com/entities/azure-minerals-ltd" target="_blank" data-smartkarma-citation="entities:16538:1" rel="noopener">Azure Minerals (AZS AU)</a> has entered a new transaction implementation deed with <a href="https://www.smartkarma.com/entities/sociedad-quimica-y-minera-de-chile-sa" target="_blank" data-smartkarma-citation="entities:27977:1" rel="noopener">Sociedad Quimica y Minera de Chile (SQM US)</a> and Hancock at A$3.70, a 51.6% premium to the undisturbed price.</li>
<li>The emergence of Hancock and <a href="https://www.smartkarma.com/entities/mineral-resources-ltd" target="_blank" data-smartkarma-citation="entities:15103:1" rel="noopener">Mineral Resources (MIN AU)</a> as substantial shareholders necessitated the new offer. The off-market takeover offer is A$3.65 per share if the scheme fails. </li>
<li>The scheme's completion hinges on MinRes’ acceptance. MinRes could potentially block the scheme but has a history of selling into Hancock offers.</li>
</ul>



Azure Minerals (AZS AU) has entered a new transaction implementation deed with Sociedad Quimica y Minera de Chile (SQM US) and Hancock at A$3.70, a 51.6% premium to the undisturbed price.
The emergence of Hancock and Mineral Resources (MIN AU) as substantial shareholders necessitated the new offer. The off-market takeover offer is A$3.65 per share if the scheme fails. 
The scheme's completion hinges on MinRes’ acceptance. MinRes could potentially block the scheme but has a history of selling into Hancock offers.


Azure Minerals (AZS AU): SQM/Hancock Team up for a New Offer

<ul>
<li>The vote is tomorrow. It is slightly contested. Shareholder proxies have recommended approving. Some others say Allkem is going too cheap. </li>
<li>It probably should get done because of scale benefits, and if it breaks, it might be good for Allkem, which is "good risk arb risk"</li>
<li>But the trade here is some combination of lithium rebound and index event, with index impact details <a href="https://www.smartkarma.com/insights/allkem-livent-ake-au-lthm-us-merger-update-much-more-than-meets-the-eye" target="_blank" rel="noopener">here</a>.</li>
</ul>


The vote is tomorrow. It is slightly contested. Shareholder proxies have recommended approving. Some others say Allkem is going too cheap. 
It probably should get done because of scale benefits, and if it breaks, it might be good for Allkem, which is "good risk arb risk"
But the trade here is some combination of lithium rebound and index event, with index impact details here.


Allkem/Livent Merger Vote Tomorrow: Will Vote Get Past?

Australia

Allkem Limited operates as a specialty lithium chemicals company. The Company's portfolio includes lithium brine and borax operations in Argentina, a hard-rock lithium operation in Australia and a lithium hydroxide conversion facility in Japan.

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Allkem Ltd (AKE AU)

Quiddity Leaderboard ASX Mar 24: Allkem, Newmont, Costa, and Many More

I see 20+ ADDs/DELs in total across ASX 20, 50, 100, 200, and 300 in the run up to the March 2024 rebalance. Many names have multiple number of...

Janaghan Jeyakumar, CFA

Allkem+Livent=Arcadium : Expected Index Flows

The Allkem/Livent deal has now been approved by shareholders of both companies. Index providers have started to make announcements. There are LOTS...

Travis Lundy

Lithium Power (LPI AU): Scheme Vote on 23 January

This is a done deal. Irrevocables represent 32.05% of outstanding shares. At the last close and for the 16 February payment, the gross/annualised...

Arun George

Azure Minerals (AZS AU): SQM/Hancock Team up for a New Offer

The scheme's completion hinges on MinRes’ acceptance. MinRes could potentially block the scheme but has a history of selling into Hancock offers....

Arun George

Allkem/Livent Merger Vote Tomorrow: Will Vote Get Past?

Allkem/Livent shareholder meetings are tomorrow. Sentiment is mixed but this likely gets done. And if not, Allkem is likely the one to own. Once...

Travis Lundy

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