European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>Silver Lake announced it waived the minimum acceptance threshold of 50% + 1 share in  its offer for <a href="https://www.smartkarma.com/entities/software-ag" target="_blank" data-smartkarma-citation="entities:21717:1" rel="noopener">Software AG (SOW GR)</a> . The acceptance period has been extended until 28 June.</li>
<li>Bain Capital abandons the pursuit and will sell its 10.01% stake to Silver Lake, which will now controls 41%, plus another 10% from a convertible bond.</li>
<li>Silver Lake is now pressing the minority shareholders to tender. Spread is 1.44%/15.13% (gross/annualised), assuming settlement on 31 July. I believe that Silver Lake will be successful. Long and tender.</li>
</ul>


Silver Lake announced it waived the minimum acceptance threshold of 50% + 1 share in  its offer for Software AG (SOW GR) . The acceptance period has been extended until 28 June.
Bain Capital abandons the pursuit and will sell its 10.01% stake to Silver Lake, which will now controls 41%, plus another 10% from a convertible bond.
Silver Lake is now pressing the minority shareholders to tender. Spread is 1.44%/15.13% (gross/annualised), assuming settlement on 31 July. I believe that Silver Lake will be successful. Long and tender.


Silver Lake/Software AG: Bain Clears the Way

Equity Analyst, Event-driven, Quiddity Advisors

Janaghan Jeyakumar, CFA

Equity Analyst, Event-driven

Quiddity Advisors

Pan-Asia Catalysts/Events

<ul>
<li>In this insight, we take a look at the names leading the race to become ADDs/DELs for the DAX, MDAX, and SDAX Indices in the September 2023 Rebalance.</li>
<li>
<a href="https://www.smartkarma.com/entities/software-ag" target="_blank" data-smartkarma-citation="entities:21717:1" rel="noopener">Software AG (SOW GR)</a> was deleted from the MDAX index triggering a couple of interim changes in the last week of July 2023.</li>
<li>Currently, I do not expect any changes for the DAX or MDAX indices in September 2023 but I expect one change for the SDAX index.</li>
</ul>


In this insight, we take a look at the names leading the race to become ADDs/DELs for the DAX, MDAX, and SDAX Indices in the September 2023 Rebalance.

Software AG (SOW GR) was deleted from the MDAX index triggering a couple of interim changes in the last week of July 2023.
Currently, I do not expect any changes for the DAX or MDAX indices in September 2023 but I expect one change for the SDAX index.


Quiddity Leaderboard-DAX Sep 23: No More Catalyst for the Short Sartorius - LONG Merck Trade

<ul>
<li>The board of <a href="https://www.smartkarma.com/entities/softwareone-holding-ag" target="_blank" data-smartkarma-citation="entities:39864:1" rel="noopener">SoftwareONE Holding (SWON SW)</a> rejected on 24 July a revised CHF 19.50-20.50 offer from Bain Capital and said it began a strategic review to seek the best value.</li>
<li>CHF 19.5 represents a 40% premium, Gross spread to the low point of the range is 4.2%. 0x EV/NTM EBITDA and 19.5 Fwd P/E.</li>
<li>This could trigger upwards revisions and would justify the Board asking for a higher offer. I'd hold on to the shares as Bain Capital could increase the offer a bit.</li>
</ul>


The board of SoftwareONE Holding (SWON SW) rejected on 24 July a revised CHF 19.50-20.50 offer from Bain Capital and said it began a strategic review to seek the best value.
CHF 19.5 represents a 40% premium, Gross spread to the low point of the range is 4.2%. 0x EV/NTM EBITDA and 19.5 Fwd P/E.
This could trigger upwards revisions and would justify the Board asking for a higher offer. I'd hold on to the shares as Bain Capital could increase the offer a bit.


Bain Capital/​SoftwareOne: Bargaining for a Better Offer

<ul>
<li>In this insight, we take a look at the names leading the race to become ADDs/DELs for the DAX, MDAX, and SDAX Indices in the September 2023 Rebalance.</li>
<li>As things stand, I do not see any changes for the DAX index as-is, but there are couple of names requiring only small price gains to trigger Fast Entry changes.</li>
<li>I see one change between MDAX and SDAX and one separate ADD/DEL for the SDAX index in the September 2023 rebalance.</li>
</ul>


In this insight, we take a look at the names leading the race to become ADDs/DELs for the DAX, MDAX, and SDAX Indices in the September 2023 Rebalance.
As things stand, I do not see any changes for the DAX index as-is, but there are couple of names requiring only small price gains to trigger Fast Entry changes.
I see one change between MDAX and SDAX and one separate ADD/DEL for the SDAX index in the September 2023 rebalance.


Quiddity Leaderboard-DAX Sep 23: SHORT Sartorius LONG Merck Trade STILL Interesting

<ul>
<li>Bain Capital has made a CHF 18.5/share offer proposal for <a href="https://www.smartkarma.com/entities/softwareone-holding-ag" target="_blank" data-smartkarma-citation="entities:39864:1" rel="noopener">SoftwareONE Holding (SWON SW)</a>, 33% premium, CHF 2,933 million implied equity value, 9.8x EV/NTM EBITDA and 18.7 Fwd P/E. </li>
<li>The offer is supported by founding shareholders (c.29.1% aggregate), who'd co-invest alongside Bain. SoftwareOne, in the middle of a turnaround, trades cheap vs. peers and my fair-value estimate (CHF 19.92/share).</li>
<li>On IBES estimates, without significant cost-cutting, at CHF 20/share, Bain could achieve 18.6% IRR by year 6, thus could offer more. Gross spread is 3.7%. Considering prospects, I'd be long.</li>
</ul>


Bain Capital has made a CHF 18.5/share offer proposal for SoftwareONE Holding (SWON SW), 33% premium, CHF 2,933 million implied equity value, 9.8x EV/NTM EBITDA and 18.7 Fwd P/E. 
The offer is supported by founding shareholders (c.29.1% aggregate), who'd co-invest alongside Bain. SoftwareOne, in the middle of a turnaround, trades cheap vs. peers and my fair-value estimate (CHF 19.92/share).
On IBES estimates, without significant cost-cutting, at CHF 20/share, Bain could achieve 18.6% IRR by year 6, thus could offer more. Gross spread is 3.7%. Considering prospects, I'd be long.


Bain Capital/SoftwareOne: Room for a Better Offer

Germany

Software AG operates as a software development company. The Company enables enterprises to integrate, connect, and manage IoT components, as well as analyze data and predict future events based on artificial intelligence. Software serves customers worldwide.

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Software (SOW GR)

Silver Lake/Software AG: Bain Clears the Way

With the minimum acceptance condition dropped and Bain selling its 10% to Silver Lake, the takeover seems clear. The market has reluctantly...

Jesus Rodriguez Aguilar

Quiddity Leaderboard-DAX Sep 23: No More Catalyst for the Short Sartorius - LONG Merck Trade

I do not expect Sartorius to get deleted from DAX in Sep 23. Despite the fundamentals still supporting the Short Sartorius - LONG Merck trade, I do...

Janaghan Jeyakumar, CFA

Bain Capital/SoftwareOne: Bargaining for a Better Offer

The Board unanimously agreed that the second indicative offer CHF 19.5-20.5 does not adequately value the Company and is not in the best interest...

Jesus Rodriguez Aguilar

Quiddity Leaderboard-DAX Sep 23: SHORT Sartorius LONG Merck Trade STILL Interesting

The SHORT Sartorius LONG Merck Trade still seems interesting as the SRT/MRK price ratio is yet to fall to reflect the recent drop in FWD EPS ratios...

Janaghan Jeyakumar, CFA

Bain Capital/SoftwareOne: Room for a Better Offer

In a similar situation, the tussle for Software AG, Silver Lake had top shareholders on board and had to sweeten the offer price to win...

Jesus Rodriguez Aguilar

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Silver Lake/Software AG: Bain Clears the Way

With the minimum acceptance condition dropped and Bain selling its 10% to Silver Lake, the takeover seems clear. The market has reluctantly...

Jesus Rodriguez Aguilar

Quiddity Leaderboard-DAX Sep 23: No More Catalyst for the Short Sartorius - LONG Merck Trade

I do not expect Sartorius to get deleted from DAX in Sep 23. Despite the fundamentals still supporting the Short Sartorius - LONG Merck trade, I do...

Janaghan Jeyakumar, CFA

Bain Capital/​SoftwareOne: Bargaining for a Better Offer

The Board unanimously agreed that the second indicative offer CHF 19.5-20.5 does not adequately value the Company and is not in the best interest...

Jesus Rodriguez Aguilar

Quiddity Leaderboard-DAX Sep 23: SHORT Sartorius LONG Merck Trade STILL Interesting

The SHORT Sartorius LONG Merck Trade still seems interesting as the SRT/MRK price ratio is yet to fall to reflect the recent drop in FWD EPS ratios...

Janaghan Jeyakumar, CFA

Bain Capital/SoftwareOne: Room for a Better Offer

In a similar situation, the tussle for Software AG, Silver Lake had top shareholders on board and had to sweeten the offer price to win...

Jesus Rodriguez Aguilar

Bain Capital/SoftwareOne: Bargaining for a Better Offer