Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<div>
<p>Back on the 30 April, Australian listed aged-care operator <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> announced it had received a non-binding Offer from Little Company of Mary Health Care - otherwise known as Calvary - by way of a Scheme, at A$1.04/share. Calvary <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02382224-3A568448?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">increased</a> the indicative Offer price to A$1.20/share on the 5 June and was granted due diligence. Ten days later the Bolton Clarke Group <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02384417-3A568803?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">made</a> an indicative proposal by way of a Scheme, at A$1.22/share, and was also afforded DD. Then JHC <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02399332-3A571403?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a> on the 27 July that it has entered into a Scheme Implementation Deed with Calvary, by way of a Scheme at A$1.40/share. </p>
<p>The Scheme Booklet is now <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02423064-3A576132?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">out</a> with the Scheme Meeting on the 21 October and payment on the 5 November, assuming the Scheme resolutions are approved.</p>
</div>
<div>
<p>This looks done and should continue to trade tight to terms. </p>
</div>


Back on the 30 April, Australian listed aged-care operator Japara Healthcare (JHC AU) announced it had received a non-binding Offer from Little Company of Mary Health Care - otherwise known as Calvary - by way of a Scheme, at A$1.04/share. Calvary increased the indicative Offer price to A$1.20/share on the 5 June and was granted due diligence. Ten days later the Bolton Clarke Group made an indicative proposal by way of a Scheme, at A$1.22/share, and was also afforded DD. Then JHC announced on the 27 July that it has entered into a Scheme Implementation Deed with Calvary, by way of a Scheme at A$1.40/share. 
The Scheme Booklet is now out with the Scheme Meeting on the 21 October and payment on the 5 November, assuming the Scheme resolutions are approved.


This looks done and should continue to trade tight to terms. 


Japara Healthcare (JHC AU): 21st October Scheme Meeting

Australian Pharmaceutical Industries / Event-Driven

<div>
<p>On the 12 July, wholesale and retail pharmacy health/beauty and lifestyle products operator <a href="https://www.smartkarma.com/entities/19399" target="_blank" data-smartkarma-citation="entities:19399:1" rel="noopener">Australian Pharmaceutical Industries (API AU)</a> (API) <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02394187-3A570533?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a> an indicative, non-binding Offer from <a href="https://www.smartkarma.com/entities/wesfarmers-ltd" target="_blank" data-smartkarma-citation="entities:1104:1" rel="noopener">Wesfarmers Ltd (WES AU)</a> by way of a Scheme at $1.38/share,  a 20.5% premium to last close.  Separately, Wesfarmers has entered into an agreement with API's largest shareholder <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. Ltd (SOL AU)</a> (WHSP), such that WHSP will vote its 19.3% interest in favour of Wesfarmers' proposal, in the absence of a superior Offer.</p>
<p>There was a whiff of opportunism present, and the API board agreed and concluded in an announcement on the <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02400478-3A571605?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">29 July</a> that the proposal undervalued API, was not compelling, and was not in the best interest of shareholders. </p>
<h3>The New News</h3>
<p>After bumping the Offer by 12.3% to A$1.55/share, Wesfarmers and API entered into a <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02422163-3A575967?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">process deed</a> yesterday. A fully franked dividend of A$0.05/share is permitted, which if paid will reduce the cash consideration.</p>
<p>WHSP remains supportive and will vote its 19.3% in favour of the revised proposal.</p>
<p>API has granted Wesfarmers exclusive due diligence until the 16 October. The deal is also subject to ACCC clearance.</p>
<p>This remains a non-binding Offer, and we have seen two Aussie deals break in the past fortnight, reinforcing the country's moniker as the non-binding graveyard.</p>
</div>
<div>
<p>More below the fold.</p>
</div>


On the 12 July, wholesale and retail pharmacy health/beauty and lifestyle products operator Australian Pharmaceutical Industries (API AU) (API) announced an indicative, non-binding Offer from Wesfarmers Ltd (WES AU) by way of a Scheme at $1.38/share,  a 20.5% premium to last close.  Separately, Wesfarmers has entered into an agreement with API's largest shareholder Washington H. Soul Pattinson and Co. Ltd (SOL AU) (WHSP), such that WHSP will vote its 19.3% interest in favour of Wesfarmers' proposal, in the absence of a superior Offer.
There was a whiff of opportunism present, and the API board agreed and concluded in an announcement on the 29 July that the proposal undervalued API, was not compelling, and was not in the best interest of shareholders. 
The New News
After bumping the Offer by 12.3% to A$1.55/share, Wesfarmers and API entered into a process deed yesterday. A fully franked dividend of A$0.05/share is permitted, which if paid will reduce the cash consideration.
WHSP remains supportive and will vote its 19.3% in favour of the revised proposal.
API has granted Wesfarmers exclusive due diligence until the 16 October. The deal is also subject to ACCC clearance.
This remains a non-binding Offer, and we have seen two Aussie deals break in the past fortnight, reinforcing the country's moniker as the non-binding graveyard.


More below the fold.


Aussie Pharma (API AU): Wesfarmer's Sweetened (Yet Indicative) Offer

Travis Lundy

Washington H. Soul Pattinson and Co. Ltd / Event-Driven

<p>The morning of the 16th of September 2021, <a href="https://www.smartkarma.com/entities/milton-corp-ltd" target="_blank" data-smartkarma-citation="entities:29090:1" rel="noopener">Milton Corp Ltd (MLT AU)</a> announced an expected A$0.37/share fully-franked special dividend (which should produce A$0.15857/share of franking credits) to go ex- on 21 September, which coincidentally should be the last day of trading for the stock.</p>
<p><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. Ltd (SOL AU)</a> shares fell more than 5% on the day, heading lower early, and staying low throughout the day.</p>
<section class="figure">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/230/191/original/Screenshot+2021-09-16+at+7.14.31+PM.png?1631790887" class="editor-image img-responsive" data-smartkarma-image-id="230191"></figure>
<p></p>
</section>
<p>It is not clear why, but one can make some guesses.</p>
<p>More below the fold.</p>
<hr>
<p>And for the history on this...</p>
<div>
<table class="table table-striped">
<tbody>
<tr>
<td colspan="2" style="width: 539pt;">
<h2>History of Insights on the Situation</h2>
</td>
</tr>
<tr>
<td><strong>Date</strong></td>
<td><strong>Title</strong></td>
</tr>
<tr>
<td>22 Jun 21</td>
<td><a href="https://www.smartkarma.com/insights/milton-merger-is-a-most-marvelous-arb" target="_blank" rel="noopener">Milton Merger Is A Most Marvelous Arb</a></td>
</tr>
<tr>
<td>24 Jun 21</td>
<td><a href="https://www.smartkarma.com/insights/milton-whsp-merger-index-implications-and-the-marvelous-arb" target="_blank" rel="noopener">Milton-WHSP Merger Index Implications and the Marvelous Arb</a></td>
</tr>
<tr>
<td>21 Jul 21</td>
<td><a href="https://www.smartkarma.com/insights/milton-s-marvelous-arm-meanders-along-marvelously" target="_blank" rel="noopener">Milton’s Marvelous Arb Meanders Along... Marvelously</a></td>
</tr>
<tr>
<td>5 Aug 21</td>
<td><a href="https://www.smartkarma.com/insights/the-still-marvelous-milton-arb-confirms-its-schedule-much-marvelousness-to-come" target="_blank" rel="noopener">The STILL MARVELOUS Milton Arb Confirms Its Schedule - Much Marvelousness to Come</a></td>
</tr>
<tr>
<td>12 Aug 21</td>
<td><a href="https://www.smartkarma.com/insights/the-magnality-of-the-marvelous-milton-merger-makes-a-moribund-march-to-metaphysis-it-s-mirific" target="_blank" rel="noopener">The Magnality of the Marvelous Milton Merger Makes a Moribund March To Metaphysis (It’s Mirific!)</a></td>
</tr>
<tr>
<td>25 Aug 21</td>
<td>
<a href="https://www.smartkarma.com/insights/marvelous-milton-making-its-move-new-30yr-highs-on-both-stocks" target="_blank" data-smartkarma-citation="insights:56651" rel="noopener">Marvelous Milton Making Its Move - New 30yr Highs On Both Stocks</a> </td>
</tr>
<tr>
<td>3 Sep 21</td>
<td>
<a href="https://www.smartkarma.com/insights/marvelous-milton-merger-mapping-mabbled-ratio-done-now-for-the-hard-part" target="_blank" data-smartkarma-citation="insights:57110" rel="noopener">Marvelous Milton Merger Mapping Mabbled: Ratio Done, Now For The Hard Part</a> </td>
</tr>
<tr>
<td>10 Sep 21</td>
<td>
<a href="https://www.smartkarma.com/insights/marvelous-milton-moves-to-merger-and-flows-lots-of-flows" target="_blank" data-smartkarma-citation="insights:57463" rel="noopener">Marvelous Milton Moves to Merger and Flows, Lots of Flows</a> </td>
</tr>
</tbody>
</table>
</div>
<div>
<p></p>
</div>
<div>
<div></div>
</div>

The morning of the 16th of September 2021, Milton Corp Ltd (MLT AU) announced an expected A$0.37/share fully-franked special dividend (which should produce A$0.15857/share of franking credits) to go ex- on 21 September, which coincidentally should be the last day of trading for the stock.
Washington H. Soul Pattinson and Co. Ltd (SOL AU) shares fell more than 5% on the day, heading lower early, and staying low throughout the day.




It is not clear why, but one can make some guesses.
More below the fold.

And for the history on this...





History of Insights on the Situation



Date
Title


22 Jun 21
Milton Merger Is A Most Marvelous Arb


24 Jun 21
Milton-WHSP Merger Index Implications and the Marvelous Arb


21 Jul 21
Milton’s Marvelous Arb Meanders Along... Marvelously


5 Aug 21
The STILL MARVELOUS Milton Arb Confirms Its Schedule - Much Marvelousness to Come


12 Aug 21
The Magnality of the Marvelous Milton Merger Makes a Moribund March To Metaphysis (It’s Mirific!)


25 Aug 21

Marvelous Milton Making Its Move - New 30yr Highs On Both Stocks 


3 Sep 21

Marvelous Milton Merger Mapping Mabbled: Ratio Done, Now For The Hard Part 


10 Sep 21

Marvelous Milton Moves to Merger and Flows, Lots of Flows 











Marvelous Milton and WHSP (SOL AU) Index Event Prepositioning Analysis

<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 37, 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 37, mostly firm, deals around the region.


More below the fold.


Asia-Pac Weekly Risk Arb Summary: China Logistics, Kerry Logistics, China Youzan

<p>On 2 September at 7pm Australia time, the Marvelous Milton Merger Arb ratio was fixed, and just now it was <a href="https://www.asx.com.au/asxpdf/20210903/pdf/4504qbggnhgyc0.pdf" target="_blank" rel="noopener">announced</a>. </p><p>The ratio of <a href="https://www.smartkarma.com/entities/milton-corp-ltd" target="_blank" data-smartkarma-citation="entities:29090:1" rel="noopener">Milton Corp Ltd (MLT AU)</a> shares to <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. Ltd (SOL AU)</a> shares has been decided at 0.1863. Entitlements will be rounded up or down to the nearest share.</p><p>Those who have been following on my model would have the NAV at A$5.622 on 2 Sep at the close, or A$5.702/share including the A$0.08 of dividend which went ex- on August 31. That delivered me a number of 0.1864 but they started with A$5.70 rather than A$5.702.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/227/647/original/Screenshot+2021-09-03+at+12.18.13+PM.png?1630642709" class="editor-image img-responsive" data-smartkarma-image-id="227647"></figure></section><p>As reported in the <a href="https://www.afr.com/street-talk/milton-corp-s-4b-takeover-finds-proxy-firm-support-20210901-p58ntx" target="_blank" rel="noopener">AFR</a>, both major proxy services came out in favor of the deal saying advantages outweighed disadvantages, and noting the IE's "fair value" range said pricing was appropriate; in a good quote from the article, "there were no stones thrown", which usually results in an approval at the Scheme Meeting.</p><p>The schedule reported in the filing is unchanged from the schedule in the Scheme Booklet.</p><div>
<p>Today's announcement means the merger trade is "fixed" rather than floating and now the remaining "risks" are...</p>
<ul>
<li>a small and eminently arb-able risk arb spread (which is 3.56% less comms and borrow fees as I type (excluding any franking credit benefit)</li>
<li>the risk of whether this gets voted through at the Scheme Meeting on the 13th, and</li>
<li>the index impacts</li>
</ul>
<p>There is, as always, more below the fold.</p>
</div><hr><div><table class="table table-striped">
<colgroup>
<col>
<col>
</colgroup>
<tbody>
<tr><td colspan="2" style="width: 539pt;"><h2>History of Insights on the Situation</h2></td></tr>
<tr>
<td><strong>Date</strong></td>
<td><strong>Title</strong></td>
</tr>
<tr>
<td>22 Jun 21</td>
<td><a href="https://www.smartkarma.com/insights/milton-merger-is-a-most-marvelous-arb" target="_blank" rel="noopener">Milton Merger Is A Most Marvelous Arb</a></td>
</tr>
<tr>
<td>24 Jun 21</td>
<td><a href="https://www.smartkarma.com/insights/milton-whsp-merger-index-implications-and-the-marvelous-arb" target="_blank" rel="noopener">Milton-WHSP Merger Index Implications and the Marvelous Arb</a></td>
</tr>
<tr>
<td>21 Jul 21</td>
<td><a href="https://www.smartkarma.com/insights/milton-s-marvelous-arm-meanders-along-marvelously" target="_blank" rel="noopener">Milton’s Marvelous Arb Meanders Along... Marvelously</a></td>
</tr>
<tr>
<td>5 Aug 21</td>
<td><a href="https://www.smartkarma.com/insights/the-still-marvelous-milton-arb-confirms-its-schedule-much-marvelousness-to-come" target="_blank" rel="noopener">The STILL MARVELOUS Milton Arb Confirms Its Schedule - Much Marvelousness to Come</a></td>
</tr>
<tr>
<td>12 Aug 21</td>
<td><a href="https://www.smartkarma.com/insights/the-magnality-of-the-marvelous-milton-merger-makes-a-moribund-march-to-metaphysis-it-s-mirific" target="_blank" rel="noopener">The Magnality of the Marvelous Milton Merger Makes a Moribund March To Metaphysis (It’s Mirific!)</a></td>
</tr>
<tr>
<td>25 Aug 21</td>
<td>
<a href="https://www.smartkarma.com/insights/marvelous-milton-making-its-move-new-30yr-highs-on-both-stocks" target="_blank" data-smartkarma-citation="insights:56651" rel="noopener">Marvelous Milton Making Its Move - New 30yr Highs On Both Stocks</a> </td>
</tr>
</tbody>
</table></div><div><p></p></div>

On 2 September at 7pm Australia time, the Marvelous Milton Merger Arb ratio was fixed, and just now it was announced. The ratio of Milton Corp Ltd (MLT AU) shares to Washington H. Soul Pattinson and Co. Ltd (SOL AU) shares has been decided at 0.1863. Entitlements will be rounded up or down to the nearest share.Those who have been following on my model would have the NAV at A$5.622 on 2 Sep at the close, or A$5.702/share including the A$0.08 of dividend which went ex- on August 31. That delivered me a number of 0.1864 but they started with A$5.70 rather than A$5.702.As reported in the AFR, both major proxy services came out in favor of the deal saying advantages outweighed disadvantages, and noting the IE's "fair value" range said pricing was appropriate; in a good quote from the article, "there were no stones thrown", which usually results in an approval at the Scheme Meeting.The schedule reported in the filing is unchanged from the schedule in the Scheme Booklet.
Today's announcement means the merger trade is "fixed" rather than floating and now the remaining "risks" are...

a small and eminently arb-able risk arb spread (which is 3.56% less comms and borrow fees as I type (excluding any franking credit benefit)
the risk of whether this gets voted through at the Scheme Meeting on the 13th, and
the index impacts

There is, as always, more below the fold.






History of Insights on the Situation

Date
Title


22 Jun 21
Milton Merger Is A Most Marvelous Arb


24 Jun 21
Milton-WHSP Merger Index Implications and the Marvelous Arb


21 Jul 21
Milton’s Marvelous Arb Meanders Along... Marvelously


5 Aug 21
The STILL MARVELOUS Milton Arb Confirms Its Schedule - Much Marvelousness to Come


12 Aug 21
The Magnality of the Marvelous Milton Merger Makes a Moribund March To Metaphysis (It’s Mirific!)


25 Aug 21

Marvelous Milton Making Its Move - New 30yr Highs On Both Stocks 




Marvelous Milton Merger Mapping Mabbled: Ratio Done, Now For The Hard Part

Australia

Washington H. Soul Pattinson & Company Limited is an investment holding company. The Company owns shares and properties, coal mining, bulk handling, commercial television licensee, telecommunications carrier, merchant banking, funds management, pharmaceutical retailing, manufacture, processing and marketing of biscuits and cakes.

Washington H. Soul Pattinson and Co. Ltd (SOL AU)

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Washington H. Soul Pattinson and Co. Ltd (SOL AU)

Japara Healthcare (JHC AU): 21st October Scheme Meeting

This is done (and why this insight is labelled bullish) and trading tight at 0.7%/5.6% gross spread. This is not a super liquid arb situation.

David Blennerhassett

Aussie Pharma (API AU): Wesfarmer's Sweetened (Yet Indicative) Offer

Trading at a 5.8%/15.8% gross/annualised spread, assuming mid-Feb completion. But it's not a super liquid arb situation. Plus this remains a non...

David Blennerhassett

Marvelous Milton and WHSP (SOL AU) Index Event Prepositioning Analysis

WHSP had a bad day on the 16th (futures and options expiry). On a net basis, the last three days have seen large bid-hitting on SOL, but...

Travis Lundy

Asia-Pac Weekly Risk Arb Summary: China Logistics, Kerry Logistics, China Youzan

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

Marvelous Milton Merger Mapping Mabbled: Ratio Done, Now For The Hard Part

Marvelous Milton Merger Mapping Mabbled. The ratio is settled at 0.1863 shares of WHSP for every share of Milton. Next is the index trade... But...

Travis Lundy

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)