Australia

• Sg Fleet (SGF AU) has entered a scheme implementation deed with Pacific Equity Partners (PEP) at A$3.50 per share, a 31.1% premium to the undisturbed price. 
• The key conditions are shareholder and regulatory approvals (FIRB, OIO and UK FCA). Super Group (SPG SJ), the largest shareholder with a 53.58% stake, will support the offer. 
• The offer is attractive compared to peer multiples and represents an all-time high. At the last close and for a March 2025-end payment, the gross/annualised spread is 2.3%/7.6%.

• De Grey acquiring Northern Star for $5 billion
• Northern Star issuing new shares to De Grey shareholders
• Transformational deal with potential for future spin-offs and M&A opportunities

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• RaaS Research Group conducted an interview with Airtasker CEO Tim Fung and CFO Mahendra Tharmarajah following the recent media deals announcement.

• RaaS has published an update report on online marketplace Airtasker (ASX:ART) following its recent announcement of three additional media deals in the UK and US.
• Additional deals in the US have been announced with Sinclair Media ($9.2m) and Mercurius Media ($9.2m), together with an extension of the Chanel 4 deal in the UK ($7.8m).
• This brings the total of recent media deals to $51.6m which is likely to supercharge international growth in the medium term.

• RaaS has published an update report on NT-focused gas explorer/producer Empire Energy Group (ASX:EEG) following the recent announcement that it had executed binding commitment letters for a $65m finance package, in three separate facilities.
• This is the critical piece of the capital funding requirement to support the Carpentaria Pilot Project to first gas as we see it.
• Importantly we suggest the securing of the package can be interpreted as a third-party vote of confidence in the commercial potential of the Beetaloo gas play.

• China Investment Corp owns 7.84% of Goodman Group (GMG AU) and is looking to sell 50.4m shares (2.64% of shares out) at a price range of A$37.55-37.6/share, a tiny discount.
• Goodman Group (GMG AU) has run away from its peers over the last couple of years and there could be a move lower in the stock following the placement.
• There will be limited passive buying in the short-term coinciding with the placement. There will be some more passive buying in February.

• CIC is looking to raise around US$1.2bn, via selling around 2.6% of its stake in Goodman Group (GMG AU) , via a block trade.
• Goodman’s shares have performed exceptionally well over the past year, driven by its pivot towards data centers.
• In this note, we will talk about the placement and run the deal through our ECM framework.

• DigiCo REIT (DIGICO AU) is looking to raise around US$1.3bn in its Australian IPO.
• DigiCo REIT (DREIT) aims to be a diversified owner, operator and developer of data centres, with a global portfolio and broad investment mandate across stabilised, value-add and development opportunities
• We have looked at the company’s past performance in our previous notes. In this note, we will talk about the IPO valuations.

• Back on the 15th August, lithium play Latin Resources (LRS AU) entered into a Scheme with Pilbara Minerals (PLS AU). PLS offered 0.07 new PLS shares for every LRS share.
• The Scheme Booklet was slightly delayed to reflect Pilbara’s recently adjusted FY25 guidance – nothing deal/project related.
• The Scheme Booklet is now out, with a Scheme Meeting to be held on the 16th Jan. Expected implementation on the 4th Feb. The IE (BDO) says fair & reasonable.

• On 29 November, the Latin Resources (LRS AU) IE considered Pilbara Minerals (PLS AU)’s all-scrip offer fair and reasonable. The offer is 0.07 PLS share per LRS share. 
• The key conditions are LRS shareholder and Brazilian regulatory approvals. No disinterested shareholder holds the 25% blocking stake, and low retail ownership lowers the headcount test risk.
• An attractive offer and the lack of a competing bidder suggest a done deal. At the last close, for the 4 February payment, the gross/annualised spread was 2.9%/18.8%.

• Back on the 25 November, SG Fleet (SGF AU) (SGF), an Aussie provider of fleet leasing services, announced a A$3.50/share non-binding/indicative proposal from Sydney PE outfit Pacific Equity Partners (PEP).
• The initial due diligence period was extended one week to the 6th December. That short timeframe suggested a firm Offer was imminent. Both parties have now entered into a SID. 
• Terms remains the same as the NBIO. SGF’s largest shareholder, Super Group (SPG SJ) (53.58%), is supportive. Implementation is expected in the 1Q25. 

• RaaS has published a flash comment on advanced materials manufacturing group Amaero International (ASX:3DA) following the company’s announcement yesterday that it has signed a three-year supply agreement for US melt and forged titanium bar with The Perryman Company, a US-based privately owned, fully-integrated manufacturer of titanium products.
• For the term of the contract, Amaero says Perryman will be its preferred and primary supplier of high-quality, reliable and scalable US melt and forged titanium alloy bar feedstock for the atomisation of premium spherical powder.
• The contract guarantees that Amaero will have sufficient titanium bars to meet anticipated contractual demand for Ti64 powder in an environment of heightening tariff wars between the US and China, limited sources of supply for critical metals and ongoing demand from the US defence, aerospace and space components sector for full lot traceability of feedstock.

• De Grey Mining (DEG AU) entered a binding scheme with Northern Star Resources (NST AU) at 0.119 NST shares per DEG share, implying A$2.08, a 37.1% premium to the undisturbed price. 
• The scheme is conditional on DEG shareholder approval. Gold Road Resources (GOR AU), the largest shareholder, potentially holds a blocking stake and has not provided an irrevocable. 
• The offer is susceptible to a competing offer as it is all-scrip and unremarkable vs peer multiples. Barrick Gold (GOLD US) and Agnico Eagle Mines (AEM US) are potential suitors.

• The review period for the December rebalance ended on 29 November. There could be one deletion, plus there will be capping changes.
• Waypoint REIT (WPR AU) is the lowest ranked current index constituent and is very close to the deletion threshold.
• We estimate the one deletion and capping changes could result in one-way turnover of 3.6% resulting in a one-way trade of A$23m.

• Hello, Welcome to the third edition of the Mikro Kap Wathclist, a series in which I go deeper into unique opportunities from my watchlist that, IMO, are worth monitoring closely.
• This way, you can act decisively when the moment comes, rather than spending weeks on initial research.
• These kinds of stocks would probably be a part of my portfolio if I were older, more diversified, or both.

• Telix Pharmaceuticals (TLX AU) initiated Phase 3 ZIRCON-CP trial of PET imaging candidate TLX250-CDx for clear cell renal cell carcinoma and dosed first patient in a cancer hospital in China.
• Telix is focused on expanding the near-term opportunity in precision medicine diagnostics with three new products planned for launch in 2025.
• CMS will unbundle and pay separately for specialized diagnostic radiopharmaceuticals for Medicare patients with per-day costs exceeding $630. The new payment decision is in favor of Telix.

• Core business driving increasing recurring revenue profile: Strong growth history with recent successful conversion to recurring revenue – now 50%+ of the business’ revenue – provides more visible earnings certainty.
• Recent history of solid growth is set to continue in core operating segments, while commercialising water treatment technology is option for potential upside in the stock.
• Cash generative, profitable, and capital-light business model: Energy (boilers) and Baltec (exhaust systems) in particular provide cash generative and profitable support for the business to prosecute building out its suite of environmental engineered solutions.

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Recce Pharmaceuticals has made several strides in advancing its topical gel formulation (R327G) of lead anti-infective therapeutic drug candidate RECCE® 327 (R327) as a topical treatment for acute bacterial skin and skin structure infections (ABSSSI) and diabetic foot infections (DFIs). The company received Human Research Ethics Committee (HREC) approval to start a registrational Phase III DFI study in Indonesia, which, if successful, could lead to a commercial launch in South-East Asia in CY26. With the near-term focus on advancing the ABSSSI and DFI indications providing a clearer path to future revenues, we have pushed back our timing expectations for the IV R327 formulation, resulting in an updated risk-adjusted net present value (rNPV) of A$593.6m (or A$2.60/share), versus A$688.5m (or A$3.07/share share) previously.

• De Grey Mining (DEG AU), which boasts one of Australia’s largest undeveloped gold projects, has announced a merger, by way of  Scheme, with Northern Star Resources (NST AU).
• Northern Star is offering 0.119 new shares for every De Grey share, and will hold ~80.1% of the combined entity, with De Grey shareholders the remaining ~19.9%. 
• Terms back out an implied price of A$2.08/share, or a ~37% premium to last close. This Offer  has the unanimous backing of both boards. 

• Northern Star Resources (NST AU) has agreed to acquire De Grey Mining (DEG AU) by way of a Scheme of Arrangement in an all-stock deal.
• De Grey Mining (DEG AU) shareholders will receive 0.119 Northern Star Resources (NST AU) shares for each De Grey share held. That implies a 37.1% premium to the last close.
• There will be passive buying in Northern Star Resources (NST AU) at the time of merger completion, though there could be selling from some existing De Grey Mining (DEG) shareholders.

• Clarity Pharmaceuticals Ltd (CU6 AU) announced that two participants have been dosed with 64Cu-SAR-bisPSMA and imaged days after the commencement of the Co-PSMA Investigator-Initiated Trial (IIT).
• SARTATE completes final assessment in Phase II diagnostic trial for neuroendocrine tumours. SAR-Bombesin began trial for castrate resistant prostate cancer.
• Clarity’s copper platform, strong prostate pipeline, and therapeutic and diagnostic efficacy data represent an attractive opportunity to grow a significant radiopharmaceutical franchise in oncology and other indications.

AFT Pharmaceuticals reported H125 revenues of NZ$86.7m, a 3.7% y-o-y increase, albeit lower than expected due to one-off factors such as inventory rationalisation by certain international customers and a prolonged doctors’ strike in South Korea (combined sales of NZ$10m vs NZ$18.2m in H124). These factors, along with continued R&D and marketing efforts, weighed on profits, with AFT reporting an operating loss of NZ$1.8m in H125 (profit of NZ$3.3m in H124). The strong domestic Australia and New Zealand (ANZ) market performance provided a positive offset, with 17.4% y-o-y revenue growth to NZ$76.7m and improved operating profitability. Management expects a recovery in H2 but has lowered full-year operating profit guidance to NZ$15–20m (from NZ$22–25m previously) to reflect the H1 impact. The longer-term target is to achieve NZ$300m in sales by end-FY27, driven by expansion efforts. Factoring in the new FY25 guidance, we have lowered our valuation to NZ$697.4m or NZ$6.65/share (from NZ$725.5m or NZ$6.92/share).

• Avjennings Ltd (AVJ AU) disclosed a non-binding indicative proposal from AVID at A$0.67 per share, a 103.0% premium to the undisturbed price. 
• The proposal is subject to due diligence (till 31 January 2025), entry into a scheme implementation deed, and shareholder and regulatory approvals (FIRB and OIO).
• The largest shareholder supports the offer, which represents a 20-year high. AVID has completed initial due diligence, lending confidence that a binding proposal will materialise.

• On the 28th November, AVJennings Ltd (AVJ AU), a widely recognised home builder in Australia/New Zealand, entered into a deed granting the AVID consortium exclusive confirmatory due diligence.
• AVID, comprising Proprium Capital Partners and AVID Property Group, have pitched an NBIO (by way of a Scheme) of A$0.67/share, in cash, a punchy 103% premium to last close. 
• Apart from entering a SIA after DD (expected end-Jan completion), the Offer requires FIRB and OIO to sign off. AVJ’s board, controlled by Singapore’s SC Global (54.5% shareholder) is supportive.

• Two intervals in the Steinalm formation (1452.5 m-1463.5 m and 1474.5 m-1480 m MD) were tested at a stable rate (natural flow) of 240-290 bbl/d of drilling mud, likely contaminated formation water and some oil traces.
• Gas was initially observed at surface.
• While the achieved flow rate highlights the high permeability of the natural fractures, the absence of hydrocarbons is disappointing and surprising given the results of the logs, the inflow of gas while drilling, the analysis of the retrieved cores (with indication of hydrocarbons) and the fact that down hole oil samples were recovered from this interval.

• RaaS Research Group conducted an interview with ReadCloud’s CEO Andrew Skelton and CFO Luke Murphy post the company’s FY24 results.
• This is a full transcript.

• DigiCo REIT (DIGICO AU) is looking to raise nearly A$2bn in its IPO by selling 399.1m shares at A$5/share. Stock is expected to list on the ASX on 12 December.
• HMC Capital (HMC AU) will own 18.2% of DigiCo REIT (DIGICO AU) after the IPO while IPO investors will own 72.5% of the company.
• Subject to DigiCo REIT being an eligible stapled security, we expect the stock to be included in global and local indices between March and June mopping up 11.7% of float.

• Project quickly shut down by company, but still moving forward
• Concerns about Chinese buying in Australia
• Waiting on cost release for project, anticipating higher costs due to increase in uranium price

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• RaaS has published an update on vertically-integrated aviation designer and manufacturer Structural Monitoring Systems (ASX:SMN) following the company’s recent guidance for FY25 and $7.2m capital raise.
• FY25 revenue guidance is for $30m-$34m (RaaS was $35.5m), +14% at the midpoint on FY24, and for EBITDA of between $7.6m and $9.1m (RaaS forecast was $8.6m), +300% on the midpoint on FY24.
• A capital raise of up to $7.2m at $0.52/share is being used to fund new product R&D (60%), working capital (20%) and CVM certification (20%).

• RaaS Research has published an update on edtech group ReadCloud (ASX:RCL) following its FY24 result in which it grew revenue by 15% and in line with our forecasts and positive underlying EBITDA of $0.4m, a $1.1m turnaround and ahead of our forecast for $0.1m.
• The company has delivered on all stated FY24 targets, providing a platform for sustained profitable growth over the coming periods.
• Management has pointed to 15% compound organic revenue growth out to FY26 to be complemented by further operating leverage and positive cash generation.

• Sg Fleet (SGF AU) confirmed it received a non-binding indicative proposal from Pacific Equity Partners at A$3.50 per share, a 31.1% premium to the undisturbed price. 
• In consultation with Bluefin Investments, the largest shareholder, PEP has been granted exclusive due diligence access, which ends on November 29.
• The offer is attractive compared to peer multiples and represents an all-time high. The talks are in the final stages, as due diligence ends at the end of the week.

• SG Fleet (SGF AU), an Aussie provider of fleet leasing services, has announced a A$3.50/share non-binding and indicative proposal from Sydney PE outfit Pacific Equity Partners (PEP). 
• SGF’s board, in consultation with South Africa’s Super Group (SPG SJ), its largest shareholder, has granted PEP exclusive due diligence. 
• A$3.50/Share is a 31% premium to undisturbed. The exclusivity period expires on the 29th November 2024. That short timeframe suggests a firm Offer is imminent. 

• With 4 days left to review cutoff, there is 1 close add and 3 potential deletions for the MV Australia Equal Weight Index at the December rebalance.
• Even if there are no constituent changes, capping changes will lead to one-way turnover of 4.6% and a round-trip trade of A$243m.
• The final list of inclusions/exclusions will depend on price movements till Friday and whether the index provider makes any significant changes to the free float of stocks in the universe.

• Iron ore prices were rangebound and maintained at over 100 USD/ton. In the last four years, they have been in a 95-130 USD/ton range. 
• China TSF (Total Social Financing) disappointed the street with 1.4 trillion RMB (-24% YoY), compared to the street estimates of >1.5 trillion RMB.
• We believe that more significant lending numbers would catalyze the iron ore price, but till then, iron prices will remain stagnant at the 100 USD/ton level.