Australia

• Bell Financial Group Ltd (ASX:BFG) is a diversified provider of financial products and software solutions within, and increasingly outside, its traditional full-service stockbroking business.
• BFG has provided a trading update for the four months to April 2025 as part of its AGM presentation.
• While the combined Technology & Platforms and Products & Services profit before tax (PBT) has increased 15% on a 12% revenue increase, the Retail & Institutional business (traditional broking) has moved from positive $5.7m to a loss of $3.2m, an $8.9m turnaround on a revenue decline of 20%.

• Mayne Pharma (MYX AU) disclosed that Cosette asserts that a material adverse change has occurred due to its trading performance, litigation and FDA untitled letter. 
• Cosette has not quantified the impact, and Mayne disputes the assertion. Mayne’s trading performance is likely the largest contributor to Cosette’s MAC-related claims. 
• Precedent schemes suggest a lower offer is the best-case scenario. An unwilling bidder looking for angles, contractually, to exit suggests the likely outcome is a scheme termination.

• With the review period nearly complete, there could be one change each for the S&P/ASX20 Index, S&P/ASX50 Index and S&P/ASX200 INDEX and two changes for the S&P/ASX100 Index in June.
• Passive trackers will need to buy between 1-12.5 days of ADV in the forecast adds and sell between 0.6-9.8 days of ADV in the forecast deletes.
• While cumulative excess volume has increased in the forecast adds and deletes, there could be underpositioning relative to the estimated passive flow in Perseus Mining, Viva Energy and Nick Scali.

• As widely speculated, Cosette asserted to Mayne Pharma (MYX AU) on the 17th May a Material Adverse Change (MAC) has occurred.
• Mayne disagrees, and views the pre-requisites for a MAC, as defined in the SID, have not been established. 
• What now? The Scheme is not terminated. Both parties remain in consultation. If those talks are not satisfactory (say, a price reduction [my guess]), Cosette said it will walk. 

• China’s industrial output grew 6.1% YoY in April 2025, surpassing expectations but slowing from March’s 7.7% surge, as the economy sustained steady growth amid complex domestic and external challenges. 
• Retail sales growth slowed to 5.1% in April, missing expectations despite government stimulus. Cautious consumer sentiment persists amid economic challenges, subdued income growth, and concerns over U.S. tariffs.
• Easing U.S.-China tensions are boosting Chinese market confidence, driving up steel production and iron ore demand. With inventories thinning, spot buyers may bid aggressively, lifting prices in the near term.

• ADX has now matured 13 shallow gas prospects across the ADX-AT-I and ADX-AT-II licence areas in Austria.
• The play is proven, supported by historical discoveries within the basin.
• Nearby historical discoveries in the area have produced 220 bcf to date.

On 19 May, Canyon Resources announced that it has received an option exercise notice from its key shareholder Eagle Eye Asset Holdings (EEA). EEA will exercise 350m options, resulting in cash proceeds of A$24.5m for the company. Canyon will use the funds to further advance its Minim Martap bauxite project, in particular to finalise the definitive feasibility study (DFS) that is scheduled for completion in Q325.

• Xanadu (XAM AU), a Mongolian copper-gold mining play, has entered a deal with Bastion, two weeks after an agreement with JV partner and major shareholder Zijin Mining (601899 CH) lapsed.
• Bastion, which comprises Singapore-based Baroo and Xanadu director Ganbayer Lkhagvasuren, are offering A$0.08/share in cash. Bastion is also subscribing for 286.8mn shares, at A$0.06/share, or 13% fully diluted. 
• The off-market Offer is contingent on a 50.1% acceptance hurdle. CAAF (11.85%) is supportive. No word on how Zijin (19.8% stakeholder, before dilution) will play this. 

• We summarize our gleanings from the Champion Iron (CIA AU) presentation, which captures the cost curve and other interesting details on the DRI market. 
• After declining below 100 USD/ton for 2 weeks, iron ore prices have slowly inched up towards 100 USD/ton, maintaining their level at the high end of the cost curve. 
• A 100 USD/ton level bodes well for the cash flows of the larger low-cost players like Vale (VALE US), Rio Tinto Ltd (RIO AU). 

• Back on the 27th March, Reject Shop (TRS AU), a discount variety store, has entered into a Scheme Implementation Deed with Canadian outfit Dollarama (DOL CN).
• Dollarama Offered A$6.68/share, a 112% premium to last close. The Offer does NOT require FIRB signing off. The Offer has the backing of TRS’ largest shareholder, Kin Group (20.8%). 
• The Scheme Booklet is now out, with a Scheme Meeting on the 23 June, and expected payment on or before the 22nd July. The IE (Kroll) says “fair & reasonable“.

• Mayne Pharma’s acquisition by Cosette Pharmaceuticals at A$7.40/share faces a 14% spread, with closing expected in 1.5 months.
• The FDA issued an Untitled Letter to Mayne Pharma about Nexstellis promotional materials, but it is unlikely to trigger a material adverse effect.
• Shareholder approval for the merger appears likely, with key stakeholders supporting the deal and a vote scheduled for June 18.

• Iron ore futures surged to a six-week high as U.S.-China trade tensions eased, with both nations agreeing to sharply reduce tariffs for 90 days, boosting market sentiment and commodity demand. 
• Underlying demand remains weak, with China’s steel consumption pressured by a cooling property sector and ongoing structural shifts across its broader economic landscape. 
• On the technical front, the outlook is turning increasingly bullish as prices are holding above key moving averages. 

• In this insight, we take a look at the potential index changes for ASX 200, 100, 50, and 20 in the run-up to the June 2025 index rebal event.
• We expect one change for ASX 20, one change for ASX 50, two changes for ASX 100, and one change for ASX 200. 
• The official index changes will be announced after the close on Friday 6th June 2025.

• Mayne Pharma (MYX AU) has released its scheme booklet regarding Cosette’s A$7.40 offer. The IE opines that the offer is fair and reasonable within its A$6.61-A$7.99 valuation range.
• The high spread reflects concerns that recent events would trigger the MAC clause. Thankfully, the scheme booklet does not indicate that Cosette is contesting it.
• Recent events should help quell retail opposition to the offer. At the last close and for a 2 July payment, the gross/annualised spread is 19.4%/262%. 

• After a rough week  – somewhat of an understatement – the Scheme Doc is now out.
• The Court Meeting is the18th June; the last day of trading the 23rd June, and implementation 2nd July. The IE says fair with a valuation range of A$6.61-A$7.99/share.
• This IE’s valuation range doesn’t factor in the pharma EO, given its ambiguity. Nor the FDA level. However, Mayne, ASIC AND Cosette have effectively signed off on the Doc’s veracity. 

• A volatile metal price has boosted the risk for BHP’s remaining strong major segment, copper, while the other two key divisions, iron ore and coal, are still sluggish
• We forecast a weaker 2025E-2026E than consensus, given the risk that global demand disappoints and continues to pressure metal prices for BHP’s three key segments
• Our conservative valuation puts BHP near fair value, and while the P/B of 2.4x is only moderately elevated versus recent history, we see the risks weighted to the downside

• Mayne Pharma (MYX AU) shares declined 15.76% after the public disclosure of an untitled FDA letter relating to NEXTSTELLIS promotional materials. 
• Mayne opines that the letter is not price sensitive as it does not prevent ongoing NEXTSTELLIS sales. Its response will likely withdraw the problematic presentation and adopt a compliance program. 
• The scheme is unlikely to be derailed, as I estimate that the MAC clause should not be triggered in the worst-case scenario of no NEXTSTELLIS sales. Risk/reward is attractive. 

• You could see this coming. With due diligence expected to close on the 15th May, Bain has notified  Insignia Financial (IFL AU) it won’t proceed due to macro uncertainties. 
• Discussions remain ongoing with CC Capital. No fixed timeline on those talks, although it appears negotiations will extend beyond the 15th May.
• NBIOs were not an ideal place to hide amid Trump’s trade war. They still aren’t. Insignia is down 14.9% as I type.

• They say bad things come in threes. First, Mayne Pharma (MYX AU)announced TherapeuticsMD (TXMD US)‘s legal lawsuit. Then shares buckled in the wake of Trump’s executive order on pharma.
• The final straw was the FDA accusing Mayne of giving misleading impression of the risks of its oral birth control pill. Shares are now a whopping 29% adrift of terms.
• Mayne reckons the lawsuit and the FDA letter are not materially price sensitive; and it intends to move forward with the Scheme. A similar intention from Cosette would be welcome.

• In Webjet (WJL AU): Undisclosed Buyer Buying, I addressed the rumours that an undisclosed buyer with ~5% was seeking to add an additional 5% (19.6mn shares).
• On the 12th May, Helloworld Ltd (HLO AU) emerged with a 5.015% stake. The same day, BGH said it had 10.76%. BGH followed with a A$0.80/share NBIO.
• BGH wants a controlling stake in Webjet (WJL AU), and potentially maintaining the listing; suggesting an off-market Offer, with say, a 50% acceptance hurdle being one possibility. 

• Back on the 21st Feb 2025, Mayne Pharma (MYX AU), a leader in dermatology and women’s health, entered into a Scheme with US-based pharmaceutical outfit, Cosette Pharmaceuticals, at A$7.40/share. 
• The transaction is progressing – the HSR Act condition was satisfied last week. A Scheme Booklet should be issued shortly, with an expected vote mid-June and late-June/early-July implementation. 
• Shares declined 3.1% yesterday over concerns a MAC could be triggered on the back of the Trump’s executive order on pharma. The impact is likely mixed, but leans neutral.

• On Monday, President Trump signed an executive order requiring drugmakers to start offering US patients the lowest price for a drug in a peer country (the Most Favoured Nation price).
• Mayne Pharma (MYX AU) is exposed as US accounts for 84% of revenue. I estimate that the average price reduction should be <16% so that the MAC is not triggered.  
• However, the MAC is not triggered if it arises “from any change in any law, regulation or rule of a Government Agency”, which should capture the Trump order.

• Webjet Group (WJL AU) disclosed a non-binding offer from BGH to acquire a controlling interest at A$0.80 per share, a 10.1% discount to the last close.
• BGH was also disclosed as the mystery buyer of the 5% stake on 8 May. BGH currently represents 10.76% of outstanding shares. 
• The offer will likely be structured as a takeover offer with a 50.1% minimum acceptance condition. It is unattractive, and the Board should negotiate better terms. 

• ReadCloud Limited (ASX:RCL) services the education and training sectors through the provision of digital learning content, proprietary interactive technology, and support for students and educators.
• The company released a trading update and its 4C quarterly activities report for the March quarter (Q2 FY25 – September year-end).
• The update contained numerous positive developments indicating continued momentum in FY25 and de-risks the financial performance for the balance of the year.

• In Betr’s “Superior Offer” For PointsBet (PBH AU) Is Questionable, I surmised, on balance, PointsBet Holdings (PBH AU) would afford Betr Entertainment (BBT AU) due diligence. That is now confirmed.
• PointsBet initial focus will be on Betr’s scrip as it comprises 43% of the funding mix.
• Separately, Mixi Inc (2121 JP)‘s Scheme Booklet was dispatched on the 8th May, with a shareholder vote on the 12th June. Mixi has matching rights under its SID.

• Jan-Mar 2025 shipments for Australian miners RIO AU, BHP AU, and FMG AU  were sluggish, registering -9.3%,-4.3%, and 0.4% YoY, respectively, due to inclement weather.
• Vale (VALE US) shipments were comparatively better, up 3.6% YoY to 66.1 mn tons. The big four kept their annual production guidance intact. 
• Positive news came from Vales China clients, as blast furnace utilization passed 90%, and some mills are now making cash profits of 200 RMB/ton. 

As promised, on 5 May, Barton announced the results of its optimised scoping study on its Tunkillia project in South Australia. Relative to its initial scoping study (July 2024), capex was down 8.0%, while unit oxide and sulphide processing costs were 24.4% and 18.0% lower, respectively, as more realistic ore hardnesses were considered for grinding purposes. The life of the operation has been extended from 7.7 to 10 years, with the result that the amount of payable gold produced has increased by 13.1%. In conjunction with a 42.9% increase in the gold price to A$5,000/oz (c US$3,333/oz), these changes (among others) resulted in an increase in pre-tax project NPV7.5 of 176.6% to A$1,416m and an 33.2 percentage point increase in the internal rate of return to 73.2% (A$781m and 48.3% at A$4,000/oz Au, respectively). Using the same inputs, our financial model generates an NPV7.5 within 6% of Barton’s, from which we estimate a post-tax project NPV7.5 of A$895.9m, or A$4.09/share.