Australia

• I tally 48 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
• Six new deals this week: Amcor (AMC AU)takes out Berry Global (BERY US);Sayona (SYA AU)and Piedmont (PLL AU) merge; and Integrated Design & Engineering  (9161 JP)‘s TOB. 
• Key updates/news took place on: Arcadium Lithium (LTM AU), Pacific Smiles (PSQ AU), Hotel Property Investments (HPI AU), HKBN (1310 HK), Xingda International (1899 HK), and Malaysia Airports Holdings (MAHB MK).

Sayona Mining is a lithium producer and explorer with projects in Canada, Western Australia and soon in the US and Ghana. A proposed merger of equals with Piedmont Lithium will create a c A$1bn mid-tier lithium player with streamlined asset ownership and significant growth optionality. Sayona and Piedmont’s Canadian and US projects comprise one of the largest advanced hard rock lithium resources in North America and are strategically positioned to supply the region’s growing lithium demand. Following the proposed equity raises, the company will be well capitalised to execute on its growth plans. As a producer, Sayona should also benefit strongly from inevitable recovery in lithium prices, with additional upside coming from the potential downstream expansion.

• Cuscal (1229Z AU) raised around A$337m (US$218m) in its Australia IPO.
• Cuscal is an authorized deposit-taking institution (ADI) in Australia that primarily provides financial infrastructure and payment services in Australia.
• We have looked at the company’s performance and valuation in our past notes. In this note, we talk about the trading dynamics.

• The Arcadium Lithium (ALTM US) scheme meeting relating to Rio Tinto Ltd (RIO AU)’s US$5.85 offer is on 23 December. The transaction is expected to close in mid-2025.
• The high current 12.3% spread reflects risk related to regulatory and shareholder approvals. The numerous required regulatory approvals pose a risk to completion and/or timing.  
• Despite depressed lithium prices, the offer remains unattractive on several fronts. Blackwattle, which opposes the offer, could rally others to force a bump. Rio conceding to a bump is uncertain. 

• Back on the 9th October, Rio Tinto Ltd (RIO AU) reached an agreement to buy Arcadium Lithium (LTM AU/ALTM US) for US$5.85/share (~A$8.70/share), a ~90% premium to undisturbed.
• The proxy statement is now out, with a Scheme Meeting scheduled for 23 December. The transaction is expected to close in mid-2025. The long stop is the 9th October 2025.
• Trading wide-ish at a gross spread of 11.9%, reflecting the timing to secure regulatory approvals – notably from China – as opposed the Offer Price being viewed as opportunistic.

• RaaS Research has published a flash comment on advanced materials manufacturing group Amaero International (ASX:3DA) following comments from ADDMAN Group President and CEO Joe Calmese at an Additive and Advanced Manufacturing Symposium held earlier this week.
• Mr. Calmese publicly called out the importance of ADDMAN Group’s partnership with Amaero in strengthening US supply chains for advanced alloys.
• Mr. Calmese highlighted that their collaboration addressed critical gaps in the supply chain by reshoring scalable production of C103 and other specialty alloy powders and that this was important for ensuring the availability of critical materials for national security applications including hypersonic and defence application.

• RaaS Research Group has published an update report on NT-focused gas explorer/producer Empire Energy Group (ASX:EEG) following the recent announcements that it has secured regulatory approvals for its Environmental Management Plan and Carpentaria-5H has spudded with drilling.
• With the commencement of drilling, our confidence in the timing to first gas production is rising.
• The company is targeting a drill-stimulate-test (IP30) result by around end Q1 CY25 which should maintain the timeline to first gas in H2 2025.

• RaaS interviewed Empire Energy Group’s Managing Director Alex Underwood post the announcements that the NT Government had approved the company’s Environmental Management Plan and that drilling had commenced at Carpentaria-5H.
• This is a full transcript.

• With the review period nearly complete, there could be one change for the S&P/ASX 50 Index and one change for the S&P/ASX 200 (AS51 INDEX) in December.
• Both deletes are also deletions from a global index next week and there could be short-term buying/covering opportunities on a drop in the stock price.
• There has been a buildup of cumulative excess volume in all stocks over the last few months. There has been no increase in positioning in CAR Group (CAR AU) recently.

• North American hard-rock lithium plays Piedmont Lithium (PLL AU) and Sayona Mining (SYA AU) are to combine in all-stock merger with a ~50%/50% ownership split on a fully diluted basis.
• Sayona will be the ultimate/surviving parent, via issuing 5.27 Sayona ordinary shares for each Piedmont share. Various equity raisings will also take place, before and after the merger.
• EGMs for both Sayona and Piedmont shareholders are expected to be held in 1H25, with expected completion also in the 1H25. 

• DigiCo REIT (DIGICO AU) aims to raise over US$1bn 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
• In this note, we talk about the not-so-positive aspects of the deal.

• In this insight, we take a look at our final expectations for index changes for ASX200, 100, 50, and 20 in the run-up to the December 2024 index rebal event.
• We do not see any index changes for ASX 20 and ASX 100.
• We expect one change for ASX 50 and one change for ASX 200.

• DigiCo REIT (DIGICO AU) aims to raise over US$1bn 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
• In this note, we talk about the positive aspects of the deal.

• Cuscal (1229Z AU) is looking to raise A$337m (US$218m) in its Australia IPO.
• Cuscal is an authorized deposit-taking institution (ADI) in Australia that primarily provides financial infrastructure and payment services in Australia.
• In this note, we look at the updates since our last look-through and share our thoughts on valuation.

• RaaS has published an update report on 3D spatial data solutions group Pointerra (ASX:3DP) following its Q1 FY25 results in which it reported a 50.4% increase in cash receipts to $3.08m, the highest recorded since Q3 FY23.
• Operating cash flow for the quarter was positive $0.31m, a $0.801m turnaround on the previous corresponding period (pcp) and $0.494m uplift on Q4 FY24.
• Pointerra ended the quarter with $2.994m in cash.

• Minres board admitted to not disclosing related party transactions two years ago, a strike against the board
• Bald Hill operations will go into care and maintenance, impacting 300 employees with some redeployment efforts
• Decision to shut down due to cost-saving measures, with potential for quick restart if market conditions improve

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• Neuren Pharmaceuticals (NEU AU) announced a share buy-back program worth up to A$50M (~3M shares, representing 2.4% of total shares on issue). The 12-month buyback will commence on December 2.
• As of September 30, 2024, Neuren has a cash balance of A$210M and the company’s R&D expenses for 1H24 were A$18M. Interest income more than covers Neuren’s corporate expenses.
• The buyback announcement follows Neuren’s recent entitlement of one-off income from the sale of partner’s Priority Review Voucher and Daybue’s record high sales in 3Q24.  

• RaaS is initiating coverage of engineering, asset management, and infrastructure and training services group Verbrec (ASX:VBC) with a DCF-based valuation of $0.40/share, representing potential capital upside of 196% on the current share price.
• FY24 was a turnaround year for Verbrec under new management with a clear strategy of carving out costs, improving operating and risk management disciplines, selling under-performing businesses and finalising legacy projects.
• The business is now recapitalised, profitable, cash generative and, in our opinion, poised for further growth with a favourable macro environment in both VBC’s traditional engineering projects and particularly its areas of sustainable focus, led by the energy transition that is underway in Australia.

• Paladin Energy faces water supply disruptions from NAM Water in Namibia, leading to a drop in guidance for Langer Heinrich uranium mine.
• The company has adjusted its FY25 uranium production guidance from 4-4.2 million pounds to 3-3.6 million pounds.
• Despite the challenges, Paladin Energy remains confident in meeting customer delivery obligations and has flexibility in contracts to manage the situation.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• The Auswide Bank (ABA AU) IE has considered Mystate Ltd (MYS AU)’s all-scrip merger offer in the best interests of the Auswide shareholders. However, the opinion comes with caveats.  
• The offer is conditional on Auswide shareholder and regulatory approvals (ACCC, Treasury). The scheme meeting is on 2 December.
• Vote risk is low due to the lack of substantial shareholders and the disinterested retail base. At the last close and for 18 December payment, the gross/annualised spread was 1.6%/10.3%.  

• SGX IO Futures fell for the second consecutive week, closing USD 4.15/ton lower at USD 101.70/ton on 18/Oct, with a trading range of USD 9.75/ton.
• Short-Term moving averages signaled a bearish reversal, with a downward 9-day moving average and failure to break above key pivot points.
• Heavy selling pressure and expanded China stimulus measures disappointed market expectations, signaling continued bearish trends with a potential test of USD 97.5/ton support.

• Fenix Resources (FEX AU) is a small-cap iron ore miner/logistics provider with massive upside based on an increasing sales profile from 1.3 to 4 million tons over FY25/26. 
• The company is also positioning itself as a logistics provider with the potential to transport 10 million tons of material through the Geraldton Port with its infrastructure in place. 
• Trading at 5.4x FY25e PE with a 1.8 EV-EBITDA, >38% of the market cap in cash, this is a stock worth exploring.