Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/senex-energy-ltd" target="_blank" data-smartkarma-citation="entities:18390:1" rel="noopener">Senex Energy (SXY AU)</a> has <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02465599-2A1345453?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">entered</a> into a Scheme of Arrangement with Posco at A$4.60/share, in cash. In addition, Senex intends to pay an interim dividend of up to A$0.05/share.</li>
<li>Senex's board unanimously recommends that shareholders vote in favour of the Scheme. Key conditions of the Scheme include Senex shareholder approval and FIRB approval.</li>
<li>Senex expects a Scheme Meeting to occur in March 2022 and, if approved, the transaction is expected to complete in late March 2022.</li>
</ul>



Senex Energy (SXY AU) has entered into a Scheme of Arrangement with Posco at A$4.60/share, in cash. In addition, Senex intends to pay an interim dividend of up to A$0.05/share.
Senex's board unanimously recommends that shareholders vote in favour of the Scheme. Key conditions of the Scheme include Senex shareholder approval and FIRB approval.
Senex expects a Scheme Meeting to occur in March 2022 and, if approved, the transaction is expected to complete in late March 2022.


Senex Energy Enters Into Scheme With Posco

M&amp;A deals in the Aussie energy space continue.
<a href="https://www.smartkarma.com/entities/posco-international-corporation" target="_blank" data-smartkarma-citation="entities:5954:1" rel="noopener">Posco International Corporation (047050 KS)</a>, the trading arm of South Korea's mega-steel play <a href="https://www.smartkarma.com/entities/posco" target="_blank" data-smartkarma-citation="entities:208:1" rel="noopener">Posco (005490 KS)</a>, has been granted exclusive due diligence through to 5 November to bump its indicative Offer of A$4.40/share for natural gas producer <a href="https://www.smartkarma.com/entities/senex-energy-ltd" target="_blank" data-smartkarma-citation="entities:18390:1" rel="noopener">Senex Energy (SXY AU)</a>. 
PIC first approached Senex on the 2 September with a A$4.00/share Offer, then A$4.20 on the 27 August, before submitting an indicative proposal of A$4.40/share on the 2 September, which is a 40% premium to the 30-day VWAP on that day. 
PIC was granted due diligence on the 15 September. The DD extension is to provide PIC with additional time to assess a further revised proposal at a higher price.
Should a firm Offer transpire, it will be done via an off-market takeover with a 50.1% minimum acceptance condition. FIRB approval would also be a condition. 
Senex is open to other offers:
<blockquote>
The Senex Board believes it is in the best interests of its shareholders to continue to engage with POSCO International and will assess any proposal received on its merits
</blockquote>
The proposal follows ongoing deals for <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> (<a href="https://skr.ma/jxkVJ" target="_blank" rel="noopener">Oil Search/Santos: PNG a Potential Party Pooper</a> ) and <a href="https://www.smartkarma.com/entities/woodside-petroleum-ltd" target="_blank" data-smartkarma-citation="entities:177:1" rel="noopener">Woodside Petroleum (WPL AU)</a> tilt for <a href="https://www.smartkarma.com/entities/bhp-group-ltd" target="_blank" data-smartkarma-citation="entities:147:1" rel="noopener">BHP Group (BHP AU)</a> O&amp;G ops (<a href="https://skr.ma/wsrxa" target="_blank" rel="noopener">If Woodside Buys BHP Petroleum for Scrip, There Will Be Flowback</a>). 
More below the fold.

M&amp;A deals in the Aussie energy space continue.
Posco International Corporation (047050 KS), the trading arm of South Korea's mega-steel play Posco (005490 KS), has been granted exclusive due diligence through to 5 November to bump its indicative Offer of A$4.40/share for natural gas producer Senex Energy (SXY AU). 
PIC first approached Senex on the 2 September with a A$4.00/share Offer, then A$4.20 on the 27 August, before submitting an indicative proposal of A$4.40/share on the 2 September, which is a 40% premium to the 30-day VWAP on that day. 
PIC was granted due diligence on the 15 September. The DD extension is to provide PIC with additional time to assess a further revised proposal at a higher price.
Should a firm Offer transpire, it will be done via an off-market takeover with a 50.1% minimum acceptance condition. FIRB approval would also be a condition. 
Senex is open to other offers:

The Senex Board believes it is in the best interests of its shareholders to continue to engage with POSCO International and will assess any proposal received on its merits

The proposal follows ongoing deals for Oil Search Ltd (OSH AU) (Oil Search/Santos: PNG a Potential Party Pooper ) and Woodside Petroleum (WPL AU) tilt for BHP Group (BHP AU) O&amp;G ops (If Woodside Buys BHP Petroleum for Scrip, There Will Be Flowback). 
More below the fold.

Sino Gas & Energy Holdings / Event-Driven

The <a href="https://www.asx.com.au/asxpdf/20180727/pdf/43wtygynnjq25m.pdf" target="_blank">Scheme Booklet</a> for Lone Star's proposed acquisition of <a href="https://www.smartkarma.com/entities/6347" target="_blank" data-smartkarma-citation="entities:6347:1">Sino Gas &amp; Energy Holdings (SEH AU)</a> has been registered with ASIC.  Key points from the Booklet, plus other musings:
<ul>
<li>The Scheme Meeting is to be held on the 5 September.</li>
<li>The Independent Expert (IE), Grant Thornton, has concluded the Scheme is in the best interests of shareholders, in the absence of a superior proposal. The A$0.25/share offer is towards the low end of the IE's A$0.228-A$0.321/share fair value range.</li>
<li>Sino Gas' directors…</li>
</ul>

The Scheme Booklet for Lone Star's proposed acquisition of Sino Gas &amp; Energy Holdings (SEH AU) has been registered with ASIC.  Key points from the Booklet, plus other musings:

The Scheme Meeting is to be held on the 5 September.
The Independent Expert (IE), Grant Thornton, has concluded the Scheme is in the best interests of shareholders, in the absence of a superior proposal. The A$0.25/share offer is towards the low end of the IE's A$0.228-A$0.321/share fair value range.
Sino Gas' directors…


Sino Gas' Scheme on Track. IE Concludes Offer Is Fair

Global Cross-Asset Energy Analyst, VAC Investments

Aaditya Chintalapati, CFA

Global Cross-Asset Energy Analyst

VAC Investments

Equity Bottom-Up

Sino Gas & Energy Holdings / Equity Bottom-Up

We believe market concern around <a href="https://www.smartkarma.com/entities/6347" target="_blank" data-smartkarma-citation="entities:6347:1">Sino Gas &amp; Energy Holdings Limited (SEH AU)</a> 's recent c.30% (adjusted) 2P reserves downgrade is overdone. SEH management's subsequent reiteration that planned development work, as well as the Lone Star offer, remains unaffected by the lower reserves is encouraging and should mitigate any near-term share price headwinds. Crucially, with the deal's adjusted implied EV/2P multiples (c.6x versus c.4x previously) now more aligned with street expectations, we would argue there is a higher likelihood that the offer is accepted by shareholders as well.

We believe market concern around Sino Gas &amp; Energy Holdings Limited (SEH AU) 's recent c.30% (adjusted) 2P reserves downgrade is overdone. SEH management's subsequent reiteration that planned development work, as well as the Lone Star offer, remains unaffected by the lower reserves is encouraging and should mitigate any near-term share price headwinds. Crucially, with the deal's adjusted implied EV/2P multiples (c.6x versus c.4x previously) now more aligned with street expectations, we would argue there is a higher likelihood that the offer is accepted by shareholders as well.  

Sino Gas & Energy Holdings (SEH AU) - 30% Reserves Downgrade Boosts Deal Likelihood

<a href="https://www.smartkarma.com/entities/6347" target="_blank" data-smartkarma-citation="entities:6347:1">Sino Gas &amp; Energy Holdings Limited (SEH AU)</a> management has recommended the acceptance of an all-cash offer by Lone Star of AUD 0.25/share for SEH's outstanding share capital. This implies a market value of AUD 530m, a c.20% premium to share prices a day prior. Our colleague <a href="https://www.smartkarma.com/profiles/263" target="_blank" data-smartkarma-citation="accounts:263">Pranav Rao</a> 's recent insight <a href="https://www.smartkarma.com/insights/sino-gas-energy-holdings-unconventional-gas-comes-to-the-fore" target="_blank" data-smartkarma-citation="insights:20903">Sino Gas &amp; Energy Holdings: Unconventional Gas Comes to the Fore </a>provides a broad summary of Lone Star's offer, including timing and necessary deal milestones. In this short report, we evaluate the offer from a resource/production perspective and its associated read-across for the rest of the Chinese Coal Bed Methane sector.

Sino Gas &amp; Energy Holdings Limited (SEH AU) management has recommended the acceptance of an all-cash offer by Lone Star of AUD 0.25/share for SEH's outstanding share capital. This implies a market value of AUD 530m, a c.20% premium to share prices a day prior. Our colleague Pranav Rao 's recent insight Sino Gas &amp; Energy Holdings: Unconventional Gas Comes to the Fore provides a broad summary of Lone Star's offer, including timing and necessary deal milestones. In this short report, we evaluate the offer from a resource/production perspective and its associated read-across for the rest of the Chinese Coal Bed Methane sector.

Sino Gas & Energy Holdings - Lone Star Offer a Test-Case for Chinese CBM Asset Tradability

Australia

Sino Gas & Energy Holdings Ltd., through its subsidiary, is an Australian exploration and production company developing gas assets in China.

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Sino Gas & Energy Holdings (SEH AU)

Senex Energy Enters Into Scheme With Posco

The Offer price is full. Trading at a gross/annualised spread of 1.9%/6.8%, including the A$0.05/share dividend. This is a done deal. Play the...

David Blennerhassett

Senex (SXY AU): Posco's Looming Offer

Given DD has been afforded, $4.40/share is approaching full value Currently trading just below terms. I think $4.60/share will garner board...

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Sino Gas' Scheme on Track. IE Concludes Offer Is Fair

The Scheme Booklet for Lone Star's proposed acquisition of Sino Gas & Energy Holdings (SEH AU) has been registered with ASIC. Key points from...

David Blennerhassett