Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Index Rebalance

<p>S&amp;P Dow Jones Indices will announce changes to the S&amp;P/ASX 100 and <a href="https://www.smartkarma.com/entities/s-p-asx-200" target="_blank" data-smartkarma-citation="entities:22901:1" rel="noopener">S&amp;P/ASX 200 (AS51 INDEX)</a> as part of the December index review on 3 December and the changes will be effective after the close of trading on 17 December.</p><p>The review period for the rebalance ends on 19 November, so we are exactly two-thirds of the way through the review period.</p><p>As of the close on 20 September, we see <a href="https://www.smartkarma.com/entities/pilbara-minerals-ltd" target="_blank" data-smartkarma-citation="entities:7460:1" rel="noopener">Pilbara Minerals (PLS AU)</a> as a potential inclusion to the S&amp;P/ASX100 and <a href="https://www.smartkarma.com/entities/link-administration-holdings-ltd" target="_blank" data-smartkarma-citation="entities:970:1" rel="noopener">Link Administration Holdings (LNK AU)</a> as a potential deletion.</p><p>For the <a href="https://www.smartkarma.com/entities/s-p-asx-200" target="_blank" data-smartkarma-citation="entities:22901:1" rel="noopener">S&amp;P/ASX 200 (AS51 INDEX)</a>, potential inclusions are <a href="https://www.smartkarma.com/entities/imugene-ltd" target="_blank" data-smartkarma-citation="entities:20276:1" rel="noopener">Imugene Ltd (IMU AU)</a>, <a href="https://www.smartkarma.com/entities/paladin-energy-ltd" target="_blank" data-smartkarma-citation="entities:10117:1" rel="noopener">Paladin Energy (PDN AU)</a>, <a href="https://www.smartkarma.com/entities/amalgamated-holdings-ltd" target="_blank" data-smartkarma-citation="entities:20978:1" rel="noopener">Event Hospitality and Entertainment (EVT AU)</a>, <a href="https://www.smartkarma.com/entities/liontown-resources-ltd" target="_blank" data-smartkarma-citation="entities:20488:1" rel="noopener">Liontown Resources (LTR AU)</a> and <a href="https://www.smartkarma.com/entities/arena-reit" target="_blank" data-smartkarma-citation="entities:12209:1" rel="noopener">Arena Reit (ARF AU)</a>, while potential deletions are <a href="https://www.smartkarma.com/entities/kogan-com-ltd" target="_blank" data-smartkarma-citation="entities:23575:1" rel="noopener">Kogan.com (KGN AU)</a>, <a href="https://www.smartkarma.com/entities/redbubble-ltd" target="_blank" data-smartkarma-citation="entities:24321:1" rel="noopener">Redbubble Ltd (RBL AU)</a>, <a href="https://www.smartkarma.com/entities/monadelphous-group-ltd" target="_blank" data-smartkarma-citation="entities:553:1" rel="noopener">Monadelphous (MND AU)</a>, <a href="https://www.smartkarma.com/entities/omni-bridgeway-ltd" target="_blank" data-smartkarma-citation="entities:8840:1" rel="noopener">Imf Bentham Ltd (OBL AU)</a> and <a href="https://www.smartkarma.com/entities/spark-new-zealand-ltd-3dcc706a-f086-4dd4-882b-2a42a36ccf8d" target="_blank" data-smartkarma-citation="entities:26915:1" rel="noopener">Spark New Zealand (SPK AU)</a>.</p><p>With multiple M&amp;A deal pending, including <a href="https://www.smartkarma.com/entities/afterpay-limited" target="_blank" data-smartkarma-citation="entities:26940:1" rel="noopener">Afterpay Touch (APT AU)</a>, <a href="https://www.smartkarma.com/entities/sydney-airport" target="_blank" data-smartkarma-citation="entities:19063:1" rel="noopener">Sydney Airport (SYD AU)</a>, <a href="https://www.smartkarma.com/entities/ausnet-services" target="_blank" data-smartkarma-citation="entities:10293:1" rel="noopener">Ausnet Services (AST AU)</a>, <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> and <a href="https://www.smartkarma.com/entities/spark-infrastructure-group" target="_blank" data-smartkarma-citation="entities:595:1" rel="noopener">Spark Infrastructure (SKI AU)</a>, there could be more additions to the index if deals are completed or highly likely to be completed by end November.</p><p>Short interest on most potential inclusions is quite low, while the short interest on many potential exclusions is quite high.</p>

S&amp;P Dow Jones Indices will announce changes to the S&amp;P/ASX 100 and S&amp;P/ASX 200 (AS51 INDEX) as part of the December index review on 3 December and the changes will be effective after the close of trading on 17 December.The review period for the rebalance ends on 19 November, so we are exactly two-thirds of the way through the review period.As of the close on 20 September, we see Pilbara Minerals (PLS AU) as a potential inclusion to the S&amp;P/ASX100 and Link Administration Holdings (LNK AU) as a potential deletion.For the S&amp;P/ASX 200 (AS51 INDEX), potential inclusions are Imugene Ltd (IMU AU), Paladin Energy (PDN AU), Event Hospitality and Entertainment (EVT AU), Liontown Resources (LTR AU) and Arena Reit (ARF AU), while potential deletions are Kogan.com (KGN AU), Redbubble Ltd (RBL AU), Monadelphous (MND AU), Imf Bentham Ltd (OBL AU) and Spark New Zealand (SPK AU).With multiple M&amp;A deal pending, including Afterpay Touch (APT AU), Sydney Airport (SYD AU), Ausnet Services (AST AU), Oil Search Ltd (OSH AU) and Spark Infrastructure (SKI AU), there could be more additions to the index if deals are completed or highly likely to be completed by end November.Short interest on most potential inclusions is quite low, while the short interest on many potential exclusions is quite high.

ASX100/​200 Index Rebalance Preview: Potential December Changes With Large Impact

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<p>Victorian electricity operator <a href="https://www.smartkarma.com/entities/ausnet-services" target="_blank" data-smartkarma-citation="entities:10293:1" rel="noopener">AusNet Services (AST AU)</a> has <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02423286-3A576179?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a> it will open its books to Brookfield after receiving a revised non-binding Offer of A$2.50/share, up from A$2.35 initially. The cash consideration will be reduced to the extent of any dividends paid. </p>
<p>The due diligence is on an exclusive basis. If a firm Offer is tabled, AusNet's board will unanimously recommend the proposal to its shareholders.</p>
<p>A firm bid will be subject to FIRB and shareholder approval. Neither Singapore Power nor China's State Grid  - AusNet's two largest shareholders - have made their intentions known as to the proposal.</p>
<blockquote>
<p>Following careful consideration, and consultation with its advisers, the board of AusNet considers that it is in the best interests of AusNet’s shareholders to engage further with Brookfield on the indicative proposal.</p>
</blockquote>
<p>The Offer price is full. Assuming Singapore Power and the State Grid are supportive, this is a done deal.</p>
<p>More below the fold.</p>

Victorian electricity operator AusNet Services (AST AU) has announced it will open its books to Brookfield after receiving a revised non-binding Offer of A$2.50/share, up from A$2.35 initially. The cash consideration will be reduced to the extent of any dividends paid. 
The due diligence is on an exclusive basis. If a firm Offer is tabled, AusNet's board will unanimously recommend the proposal to its shareholders.
A firm bid will be subject to FIRB and shareholder approval. Neither Singapore Power nor China's State Grid  - AusNet's two largest shareholders - have made their intentions known as to the proposal.

Following careful consideration, and consultation with its advisers, the board of AusNet considers that it is in the best interests of AusNet’s shareholders to engage further with Brookfield on the indicative proposal.

The Offer price is full. Assuming Singapore Power and the State Grid are supportive, this is a done deal.
More below the fold.

AusNet Services (AST AU) Opens Its Books to Brookfield

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

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

Transurban Group / Equity Capital Markets

<div>
<p>Transurban aims to raise around US$3.2bn (A$4.2bn) via a mix of entitlement offer and private placement to AustralianSuper to fund the acquisition of the remaining 49% stake in WestConnex.</p>
<p>We have covered some of the prior entitlement offer related shortfall bookbuilds in the past:</p>
</div><div><ul style="list-style-type: disc;">
<li><a href="https://www.smartkarma.com/insights/acquisition-appears-attractive-and-track-record-remains-stellar-but-upside-seems-limited" target="_blank" rel="noopener">Nov 2015: Acquisition Appears Attractive and Track Record Remains Stellar but Upside Seems Limited</a></li>
<li>Dec 2017: <a href="https://www.smartkarma.com/insights/transurban-entitlement-offer-uncertainty-abound" target="_blank" rel="noopener">Transurban Entitlement Offer - Uncertainty Abound</a>
</li>
<li>Sep 2018: <a href="https://www.smartkarma.com/insights/transurban-entitlement-and-short-fall-long-term-value-accretion-with-short-term-earnings-drag" target="_blank" rel="noopener">Transurban Entitlement and Short-Fall - Long-Term Value Accretion with Short-Term Earnings Drag</a> and <a href="https://www.smartkarma.com/insights/transurban-retail-short-fall-quick-take-much-better-positioned-now" target="_blank" rel="noopener">Transurban Retail Short-Fall - Quick Take - Much Better Positioned Now</a>
</li>
<li>Aug 2019: <a href="https://www.smartkarma.com/insights/transurban-retail-short-fall-quick-take-much-better-positioned-now" target="_blank" rel="noopener">Transurban Retail Short-Fall - Quick Take - Much Better Positioned Now</a>
</li>
</ul></div><p>In this note, we will talk about the deal dynamics and run the deal through our ECM framework.</p>


Transurban aims to raise around US$3.2bn (A$4.2bn) via a mix of entitlement offer and private placement to AustralianSuper to fund the acquisition of the remaining 49% stake in WestConnex.
We have covered some of the prior entitlement offer related shortfall bookbuilds in the past:

Nov 2015: Acquisition Appears Attractive and Track Record Remains Stellar but Upside Seems Limited
Dec 2017: Transurban Entitlement Offer - Uncertainty Abound

Sep 2018: Transurban Entitlement and Short-Fall - Long-Term Value Accretion with Short-Term Earnings Drag and Transurban Retail Short-Fall - Quick Take - Much Better Positioned Now

Aug 2019: Transurban Retail Short-Fall - Quick Take - Much Better Positioned Now

In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

Transurban Entitlement and Shortfall - Well Flagged Deal for a Well Known Asset

<div>
<p>This insight provides a quick summary of gross/annualised (where possible) spreads (on deals discussed on Smartkarma) across Asia-Pacific as at the last trading date, and how those spreads have changed over the last week; plus the next hard events over the coming weeks.</p>
</div>
<div>
<p>I number 36, mostly firm, deals around the region.</p>
</div>
<div>
<p>More below the fold.</p>
</div>


This insight provides a quick summary of gross/annualised (where possible) spreads (on deals discussed on Smartkarma) across Asia-Pacific as at the last trading date, and how those spreads have changed over the last week; plus the next hard events over the coming weeks.


I number 36, mostly firm, deals around the region.


More below the fold.


Asia-Pac Weekly Risk Arb Summary: Sydney Airport, Aussie Pharma, Milton, Shinsei Bank

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.

<p><a href="https://www.smartkarma.com/entities/sydney-airport" target="_blank" data-smartkarma-citation="entities:19063:1" rel="noopener">Sydney Airport (SYD AU)</a> is Australia’s largest airport and the only listed airport on ASX. Sydney Airport has granted a consortium (Sydney Aviation Alliance) non-exclusive due diligence access based on a further revised indicative proposal of A$8.75 cash per share. The revised indicative offer is A$8.75 per share is a 52% premium to the unaffected price of A$5.75 (1 July). The revised indicative offer is also a marginal 3.6% bump to the first revised offer of A$8.45 per share received from the consortium on 16 August.</p><p>Pushing for a better price is part of the M&amp;A game. The Board were said to be seeking a price around A$9.00 per share, according to press reports. However, the Board faced increasing shareholder pushback to engage with the consortium and facilitate due diligence. The consortium viewed A$9.00 per share as excessive but shareholder feedback suggested that the price of A$8.75 per share would get the Board onside. UniSuper, the largest independent shareholder, will rollover its shares instead of receiving cash under the scheme and will be required to vote as a separate class on the scheme. </p><p>The Board intends to recommend the revised offer subject to a binding scheme implementation agreement and no superior offer. The due diligence which is expected to take four weeks should be relatively straightforward due to the consortium’s expertise in airport infrastructure. The deal requires regulatory approval from the Australian Competition and Consumer Commission (ACCC) and the Foreign Investment Review Board. The ACCC will commence a review of the proposed transaction “<em>in due course</em>” and the review should take about three months to complete. The shareholder vote for approval is likely to be held in 1Q22. </p><div class="content-highlight"><p>Overall, we think that the further revised indicative offer is attractive and marginally above the pre-COVID-19 rights adjusted share price high reached in December 2019. The offer will prove attractive to shareholders who are looking for valuation certainty in an environment where the pace of the recovery in international air travel remains unclear. At the last close price of A$8.23, the shares are trading at a 6.3% gross spread to the indicative offer.</p></div>

Sydney Airport (SYD AU) is Australia’s largest airport and the only listed airport on ASX. Sydney Airport has granted a consortium (Sydney Aviation Alliance) non-exclusive due diligence access based on a further revised indicative proposal of A$8.75 cash per share. The revised indicative offer is A$8.75 per share is a 52% premium to the unaffected price of A$5.75 (1 July). The revised indicative offer is also a marginal 3.6% bump to the first revised offer of A$8.45 per share received from the consortium on 16 August.Pushing for a better price is part of the M&amp;A game. The Board were said to be seeking a price around A$9.00 per share, according to press reports. However, the Board faced increasing shareholder pushback to engage with the consortium and facilitate due diligence. The consortium viewed A$9.00 per share as excessive but shareholder feedback suggested that the price of A$8.75 per share would get the Board onside. UniSuper, the largest independent shareholder, will rollover its shares instead of receiving cash under the scheme and will be required to vote as a separate class on the scheme. The Board intends to recommend the revised offer subject to a binding scheme implementation agreement and no superior offer. The due diligence which is expected to take four weeks should be relatively straightforward due to the consortium’s expertise in airport infrastructure. The deal requires regulatory approval from the Australian Competition and Consumer Commission (ACCC) and the Foreign Investment Review Board. The ACCC will commence a review of the proposed transaction “in due course” and the review should take about three months to complete. The shareholder vote for approval is likely to be held in 1Q22. Overall, we think that the further revised indicative offer is attractive and marginally above the pre-COVID-19 rights adjusted share price high reached in December 2019. The offer will prove attractive to shareholders who are looking for valuation certainty in an environment where the pace of the recovery in international air travel remains unclear. At the last close price of A$8.23, the shares are trading at a 6.3% gross spread to the indicative offer.

Sydney Airport’s Further Revised Offer Gets the Board’s Approval

Australia

Sydney Airport operates the Sydney, Australia airport. The Company develops and maintains the airport infrastructure and leases terminal space to airlines and retailers.

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Sydney Airport (SYD AU)

ASX100/200 Index Rebalance Preview: Potential December Changes With Large Impact

There could be 1 change to the ASX100 and 5 changes to the ASX200 at the December rebalance. With a long M&A pipeline, there could be additional...

Brian Freitas

AusNet Services (AST AU) Opens Its Books to Brookfield

Assuming an estimated effective date towards the end of March 2022 - today's close is around a gross/annualised return of 5.9%/11.6%. Not bad....

David Blennerhassett

Transurban Entitlement and Shortfall - Well Flagged Deal for a Well Known Asset

Transurban aims to raise around US$3.2bn (A$4.2bn) via a mix of entitlement offer and private placement to AustralianSuper to fund the acquisition...

Sumeet Singh

Asia-Pac Weekly Risk Arb Summary: Sydney Airport, Aussie Pharma, Milton, Shinsei Bank

This insight provides a summary of gross/annualised spreads (on deals discussed on Smartkarma) across Asia-Pacific as at the last trading date, and...

David Blennerhassett

Sydney Airport’s Further Revised Offer Gets the Board’s Approval

Sydney Airport has granted DD to a Sydney Aviation Alliance based on a revised price of A$8.75. The offer is attractive and at the last price of...

Arun George

Price Gauge

52-week Range

Market Cap (USDm)

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ASX100/​200 Index Rebalance Preview: Potential December Changes With Large Impact

There could be 1 change to the ASX100 and 5 changes to the ASX200 at the December rebalance. With a long M&A pipeline, there could be additional...

Brian Freitas

AusNet Services (AST AU) Opens Its Books to Brookfield

Assuming an estimated effective date towards the end of March 2022 - today's close is around a gross/annualised return of 5.9%/11.6%. Not bad....

David Blennerhassett

Transurban Entitlement and Shortfall - Well Flagged Deal for a Well Known Asset

Transurban aims to raise around US$3.2bn (A$4.2bn) via a mix of entitlement offer and private placement to AustralianSuper to fund the acquisition...

Sumeet Singh

Asia-Pac Weekly Risk Arb Summary: Sydney Airport, Aussie Pharma, Milton, Shinsei Bank

This insight provides a summary of gross/annualised spreads (on deals discussed on Smartkarma) across Asia-Pacific as at the last trading date, and...

David Blennerhassett

Sydney Airport’s Further Revised Offer Gets the Board’s Approval

Sydney Airport has granted DD to a Sydney Aviation Alliance based on a revised price of A$8.75. The offer is attractive and at the last price of...

Arun George

ASX100/200 Index Rebalance Preview: Potential December Changes With Large Impact