APAC IPOs & Placements

Zhen Zhou, Toh

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.

Equity Capital Markets

<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> is looking to raise US$147m in its institutional placement to partially fund the acquisition of a US Investment manager.In this note, we will discuss the deal details, share our thoughts on the acquisition and run the deal through our ECM framework.

Pendal Group (PDL AU) is looking to raise US$147m in its institutional placement to partially fund the acquisition of a US Investment manager.In this note, we will discuss the deal details, share our thoughts on the acquisition and run the deal through our ECM framework.

Pendal Group Placement - Accretive Acquisition

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

An Australian Royal Commission on aged care providers was <a href="https://agedcare.royalcommission.gov.au/sites/default/files/2021-03/final-report-volume-1_0.pdf" target="_blank" rel="noopener">issued</a> on the 26 February 2021 with 148 recommendations to address what was deemed a weak and ineffective regulatory arrangement, including a new aged care act, the introduction of a system of star rating system for facilities, and some form of aged care levy for the funding of the system. The government also made an initial pledged of $452mn in additional funding.
The share price reaction to the report from the three key aged-care Aussie listed operators - <a href="https://www.smartkarma.com/entities/regis-healthcare-ltd" target="_blank" data-smartkarma-citation="entities:2086:1" rel="noopener">Regis Healthcare (REG AU)</a>, <a href="https://www.smartkarma.com/entities/estia-health-ltd" target="_blank" data-smartkarma-citation="entities:77:1" rel="noopener">Estia Health (EHE AU)</a>, and <a href="https://www.smartkarma.com/entities/japara-healthcare-ltd" target="_blank" data-smartkarma-citation="entities:14760:1" rel="noopener">Japara Healthcare (JHC AU)</a> - was largely one of "meh". Nevertheless, the ongoing speculation as to the Royal Commission findings, in tandem with COVID, had resulted in Japara's shares trading down 75% in the last five, and ~60% a-piece for Regis and Estia in the same time frame, at that time.
Neither company, to date, has comprehensively addressed the conclusions of the report.
<h3>The New News</h3>
JHC <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02369261-3A566260?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a> this morning it had received an unsolicited, indicative, conditional, and non-binding Offer from Little Company of Mary Health Care - otherwise known as Calvary - by way of a Scheme, at A$1.04/share.
JHC said it is reviewing its options.
My initial reaction is that this is an opportunistic bid. This is the third Offer in this space in the last year. <a href="https://www.smartkarma.com/entities/metlifecare-ltd" target="_blank" data-smartkarma-citation="entities:19219:1" rel="noopener">Metlifecare Ltd (MET NZ)</a> was eventually taken private.  Regis fielded an Offer from its co-founder and <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. (SOL AU)</a> in September last year, which was subsequently withdrawn, despite a bump in terms. Regis has outperformed the market since.
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<div>More below the fold.</div>
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An Australian Royal Commission on aged care providers was issued on the 26 February 2021 with 148 recommendations to address what was deemed a weak and ineffective regulatory arrangement, including a new aged care act, the introduction of a system of star rating system for facilities, and some form of aged care levy for the funding of the system. The government also made an initial pledged of $452mn in additional funding.
The share price reaction to the report from the three key aged-care Aussie listed operators - Regis Healthcare (REG AU), Estia Health (EHE AU), and Japara Healthcare (JHC AU) - was largely one of "meh". Nevertheless, the ongoing speculation as to the Royal Commission findings, in tandem with COVID, had resulted in Japara's shares trading down 75% in the last five, and ~60% a-piece for Regis and Estia in the same time frame, at that time.
Neither company, to date, has comprehensively addressed the conclusions of the report.
The New News
JHC announced this morning it had received an unsolicited, indicative, conditional, and non-binding Offer from Little Company of Mary Health Care - otherwise known as Calvary - by way of a Scheme, at A$1.04/share.
JHC said it is reviewing its options.
My initial reaction is that this is an opportunistic bid. This is the third Offer in this space in the last year. Metlifecare Ltd (MET NZ) was eventually taken private.  Regis fielded an Offer from its co-founder and Washington H. Soul Pattinson And Co. (SOL AU) in September last year, which was subsequently withdrawn, despite a bump in terms. Regis has outperformed the market since.

More below the fold.


Japara Healthcare (JHC AU): Here Comes The Calvary

Remote power generator <a href="https://www.smartkarma.com/entities/zenith-energy-ltd-au" target="_blank" data-smartkarma-citation="entities:28909:1" rel="noopener">Zenith Energy Ltd (ZEN AU)</a> specialist has announced an Offer, by way of a Scheme from Elemental Infrastructure BidCo, a Pacific Equity Partners (PEP) entity, at $1.01/share in cash, a 45.3% premium to last close. 
The Offer has been unanimously recommended by Zenith’s board of directors, and values Zenith’s equity at ~A$150mn (US$98mn) and an enterprise value of ~$250mn.
Rollover shareholders - including Chairman Doug Walker, MD Hamish Moffat and COO Graham  Cooper - collectively holding 23%, will be able to elect to receive at least 66% of their Scheme Consideration as scrip consideration. 
For the purpose of the Scheme, these shareholders form a separate class of shareholder, therefore there will be two Scheme Meetings - the rollover shareholders will be entitled to vote only at their own Scheme Meeting. Both Scheme Meetings will need to pass resolutions approving the Scheme. A similar structure was tabled in <a href="https://skr.ma/UB59n" target="_blank" rel="noopener">Quadrant Cues QMS Offer In OOH Return</a>. 
This appears a relatively straightforward Scheme. It is now a question whether a competing Offer, as transpired in the <a href="https://www.smartkarma.com/entities/pacific-energy-ltd" target="_blank" data-smartkarma-citation="entities:7372:1" rel="noopener">Pacific Energy (PEA AU)</a> transaction last year, will unfold. 
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For more on the rules, regulations, practices, and foibles of Australian M&amp;A, please refer to the <a href="https://www.smartkarma.com/insights/quiddity-australia-m-a-guide-2019" target="_blank" rel="noopener">Quiddity Australia M&amp;A Guide 2019</a>.
</div>

Remote power generator Zenith Energy Ltd (ZEN AU) specialist has announced an Offer, by way of a Scheme from Elemental Infrastructure BidCo, a Pacific Equity Partners (PEP) entity, at $1.01/share in cash, a 45.3% premium to last close. 
The Offer has been unanimously recommended by Zenith’s board of directors, and values Zenith’s equity at ~A$150mn (US$98mn) and an enterprise value of ~$250mn.
Rollover shareholders - including Chairman Doug Walker, MD Hamish Moffat and COO Graham  Cooper - collectively holding 23%, will be able to elect to receive at least 66% of their Scheme Consideration as scrip consideration. 
For the purpose of the Scheme, these shareholders form a separate class of shareholder, therefore there will be two Scheme Meetings - the rollover shareholders will be entitled to vote only at their own Scheme Meeting. Both Scheme Meetings will need to pass resolutions approving the Scheme. A similar structure was tabled in Quadrant Cues QMS Offer In OOH Return. 
This appears a relatively straightforward Scheme. It is now a question whether a competing Offer, as transpired in the Pacific Energy (PEA AU) transaction last year, will unfold. 


For more on the rules, regulations, practices, and foibles of Australian M&amp;A, please refer to the Quiddity Australia M&amp;A Guide 2019.


Zenith Energy's Offer From Pacific Equity

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

The MSCI ACWI ex-U.S. is breaking topside its nearly 14-month downtrend and above key resistance. The move is being fueled by improvements throughout most of Europe and the UK, along with strength in China over the past 2-3 months. We believe these positive developments are supportive of higher equity prices moving forward. We provide a technical appraisal of all major markets.The STOXX 600 Banks and Insurance Sectors are exhibiting bullish price inflections and RS indicates these areas may be emerging as leadership. In today’s report we highlight actionable stocks throughout the int’l Financial Sector.

The MSCI ACWI ex-U.S. is breaking topside its nearly 14-month downtrend and above key resistance. The move is being fueled by improvements throughout most of Europe and the UK, along with strength in China over the past 2-3 months. We believe these positive developments are supportive of higher equity prices moving forward. We provide a technical appraisal of all major markets.The STOXX 600 Banks and Insurance Sectors are exhibiting bullish price inflections and RS indicates these areas may be emerging as leadership. In today’s report we highlight actionable stocks throughout the int’l Financial Sector.

MSCI ACWI Ex-U.S. Breaking Topside Its Downtrend: Europe & The UK Look Attractive

Platinum Asset Management / Equity Capital Markets

The co-founder of  <a href="https://www.smartkarma.com/entities/914" target="_blank" data-smartkarma-citation="entities:914:1">Platinum Asset Management (PTM AU)</a>, Kerr Neilson, and Judith Neilson are looking to sell 30m shares of the company at a fixed price of A$5.00. The deal scores poorly on our framework due to its poor track record, large deal size, weak earnings momentum and relatively expensive valuation. The selldown comes after the company weak 1H FY19 results last month which could put pressure on share price in the near term.

The co-founder of  Platinum Asset Management (PTM AU), Kerr Neilson, and Judith Neilson are looking to sell 30m shares of the company at a fixed price of A$5.00. The deal scores poorly on our framework due to its poor track record, large deal size, weak earnings momentum and relatively expensive valuation. The selldown comes after the company weak 1H FY19 results last month which could put pressure on share price in the near term.

Platinum Asset Management Placement -  Co-Founder Selling + Weak Earnings Momentum

Australia

Pendal Group Limited operates as an investment management company. The Company focuses on portfolio management and advisory services to individuals, institutions, trusts, private funds, charitable organizations, and investment companies. Pendal Group serves customers in Australia.

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Pendal Group (PDL AU)

Pendal Group Placement - Accretive Acquisition

Pendal Group (PDL AU) is looking to raise US$147m in its institutional placement to partially fund the acquisition of a US Investment manager.

Zhen Zhou, Toh

Japara Healthcare (JHC AU): Here Comes The Calvary

For what is likely a sector in recovery mode, one in which the Commission overhang is largely removed, and a comprehensive reform package to be...

David Blennerhassett

Zenith Energy's Offer From Pacific Equity

Remote power generator Zenith Energy Ltd (ZEN AU) specialist has announced an Offer, by way of a Scheme from Elemental Infrastructure BidCo, a...

David Blennerhassett

MSCI ACWI Ex-U.S. Breaking Topside Its Downtrend: Europe & The UK Look Attractive

The MSCI ACWI ex-U.S. is breaking topside its nearly 14-month downtrend and above key resistance. The move is being fueled by improvements...

Vermilion Research

Platinum Asset Management Placement - Co-Founder Selling + Weak Earnings Momentum

The co-founder of Platinum Asset Management (PTM AU), Kerr Neilson, and Judith Neilson are looking to sell 30m shares of the company at a fixed...

Zhen Zhou, Toh

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