Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

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<a href="https://www.smartkarma.com/entities/reject-shop-ltd-the" target="_blank" data-smartkarma-citation="entities:272:1" rel="noopener"><strong>Reject Shop (TRS AU)</strong></a>, a discount variety store, has entered into a <a href="https://announcements.asx.com.au/asxpdf/20250327/pdf/06h1hs2xgvxjhn.pdf" target="_blank" rel="noopener">Scheme Implementation Deed</a> with Canadian outfit <strong><a href="https://www.smartkarma.com/entities/dollarama-inc" target="_blank" data-smartkarma-citation="entities:25273:1" rel="noopener">Dollarama (DOL CN)</a></strong>.</li>
<li>Dollarama is offering A$6.68/share, a 112% premium to last close. The Offer does NOT require FIRB signing off. The Offer has the unanimous backing of both boards.</li>
<li>The Offer also has the backing of TRS' largest shareholder, Kin Group (20.8%).  Implementation is expected July 2025. This is done.</li>
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Reject Shop (TRS AU), a discount variety store, has entered into a Scheme Implementation Deed with Canadian outfit Dollarama (DOL CN).
Dollarama is offering A$6.68/share, a 112% premium to last close. The Offer does NOT require FIRB signing off. The Offer has the unanimous backing of both boards.
The Offer also has the backing of TRS' largest shareholder, Kin Group (20.8%).  Implementation is expected July 2025. This is done.


Last Week in Event SPACE: Capitaland, Languang Justbon, Fast Retailing, Crown Resorts, Adani Power

<div>Consumer products outfit <a href="https://www.smartkarma.com/entities/mcpherson-s-ltd" target="_blank" data-smartkarma-citation="entities:6729:1" rel="noopener">Mcpherson's Ltd (MCP AU)</a> has <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02357218-2A1289056?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a> an unconditional, <em>on-market</em> cash Offer of $1.34/share from the Kin Group. The Offer price was a 9.8% premium to last close.</div>
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<div>The Offer period closes on the 9 April - unless extended.</div>
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<div>Unlisted Kin Group also <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02357231-2A1289074?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a> it held 6.35mn shares or 4.95% of shares out.</div>
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<div>The Kin Group has an MO for these types of Offers. And not always with runaway success. That may be the case again here - MCP has <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02357371-2A1289165?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">recommended</a> shareholders take no action, and that the Offer is "<em>utterly opportunistic and profoundly undervalues</em>" the company.</div>
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<div>More below the fold.</div>

Consumer products outfit Mcpherson's Ltd (MCP AU) has announced an unconditional, on-market cash Offer of $1.34/share from the Kin Group. The Offer price was a 9.8% premium to last close.

The Offer period closes on the 9 April - unless extended.

Unlisted Kin Group also announced it held 6.35mn shares or 4.95% of shares out.


The Kin Group has an MO for these types of Offers. And not always with runaway success. That may be the case again here - MCP has recommended shareholders take no action, and that the Offer is "utterly opportunistic and profoundly undervalues" the company.


More below the fold.

McPherson (MCP AU): Unconditional On-Market Offer

Founder Evidente. Top rated quantitative analyst, Evidente

Sam Ferraro

Founder Evidente. Top rated quantitative analyst

Evidente

Evidente is an independent financial education firm that delivers innovative financial advice to wholesale investors, including active long only funds, hedge funds, pension funds, and sovereign wealth funds, in Australia and globally.  Drawing on academic research in asset pricing, behavioural finance and portfolio construction, Evidente provides wholesale investors with commercial solutions to stock selection and asset allocation decisions across equities and other asset classes.

Equity Bottom-Up

<ul><li>Over the past 18 months, Evidente has recommended that Australian focussed investors have an overweight bet in discretionary retailers, challenging the conventional view that the consumer is being weighed down by record levels of indebtedness and historically low wages growth.  This post provides an update on the performance of discretionary retailers and re-visits whether the fundamentals for the consumer and sector have changed.  </li><li>Evidente continues to recommend an overweight bet in the interest sensitive discretionary retailers.  The RBA has little choice but to keep interest rates low for an extended period to ensure that consumption supports activity at a time when animal spirits in the corporate sector remain dormant. </li><li>When using an alternative measure of indebtedness, Australia's consumer does not appear to be stretched.  In a climate when many of the blue chips in the ASX200 are ex-growth, Evidente believes that discretionary retailers offer strong growth prospects based on the expectation of continued strong growth in discretionary spending patterns.</li></ul>

Over the past 18 months, Evidente has recommended that Australian focussed investors have an overweight bet in discretionary retailers, challenging the conventional view that the consumer is being weighed down by record levels of indebtedness and historically low wages growth.  This post provides an update on the performance of discretionary retailers and re-visits whether the fundamentals for the consumer and sector have changed.  Evidente continues to recommend an overweight bet in the interest sensitive discretionary retailers.  The RBA has little choice but to keep interest rates low for an extended period to ensure that consumption supports activity at a time when animal spirits in the corporate sector remain dormant. When using an alternative measure of indebtedness, Australia's consumer does not appear to be stretched.  In a climate when many of the blue chips in the ASX200 are ex-growth, Evidente believes that discretionary retailers offer strong growth prospects based on the expectation of continued strong growth in discretionary spending patterns.

Australian Discretionary Retailers Defy Record Low Wage Growth - Retain Overweight

<ul><li>In May of last year, Evidente published a post recommending that investors have an overweight bet in Australia’s discretionary retailers based on preliminary signs of a less cautious consumer were emerging.  I expected that there were downside risks to the household saving ratio as consumers became more optimistic about the future, but at the same time acknowledged that record low wages growth would constrain gain in household incomes.</li><li>In hindsight, the positive sector call was too early.  Discretionary retailers under-performed the broader market through to mid-October.  Since then however, the sector has strongly out-performed as the household saving ratio has declined to its lowest level since 2008, as revealed in this week's National Accounts release.  This has occurred despite the moderation of house price gains in Melbourne and Sydney in the December quarter.</li><li>While the economy remains on the precipice of a capex cliff, the RBA has little choice but to keep interest rates low to support growth in household consumption and dwelling investment.  Evidente therefore expects the household saving ratio to decline further and the recent strong performance from discretionary retailers to continue.  We identify seven stocks exposed to this investment theme.</li></ul>

In May of last year, Evidente published a post recommending that investors have an overweight bet in Australia’s discretionary retailers based on preliminary signs of a less cautious consumer were emerging.  I expected that there were downside risks to the household saving ratio as consumers became more optimistic about the future, but at the same time acknowledged that record low wages growth would constrain gain in household incomes.In hindsight, the positive sector call was too early.  Discretionary retailers under-performed the broader market through to mid-October.  Since then however, the sector has strongly out-performed as the household saving ratio has declined to its lowest level since 2008, as revealed in this week's National Accounts release.  This has occurred despite the moderation of house price gains in Melbourne and Sydney in the December quarter.While the economy remains on the precipice of a capex cliff, the RBA has little choice but to keep interest rates low to support growth in household consumption and dwelling investment.  Evidente therefore expects the household saving ratio to decline further and the recent strong performance from discretionary retailers to continue.  We identify seven stocks exposed to this investment theme.

Retain Positive View on Australia's Discretionary Retailers

Australia

The Reject Shop Limited operates discount retail stores in Victoria, New South Wales, South Australia and the ACT.  The Company's discount stores offers a variety of merchandise such as apparel, houseware, leisure, personal care and hardware and furniture.

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Reject Shop (TRS AU)

The Reject Shop: Dollarama's Done Deal

This is a clean deal. Trading tightish at 2.8%/8.8% gross/annualised spread - including the interim divi - assuming late July completion.

David Blennerhassett

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The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

McPherson (MCP AU): Unconditional On-Market Offer

Currently trading 4% through terms. You have a hard floor for the next fortnight - and potentially thru to early July is using its Offer for Reject...

David Blennerhassett

Australian Discretionary Retailers Defy Record Low Wage Growth - Retain Overweight

Over the past 18 months, Evidente has recommended that Australian focussed investors have an overweight bet in discretionary retailers,...

Sam Ferraro

Retain Positive View on Australia's Discretionary Retailers

In May of last year, Evidente published a post recommending that investors have an overweight bet in Australia’s discretionary retailers based on...

Sam Ferraro

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