Daily Brief Australia: Insignia Financial, Rio Tinto Ltd, Iron Ore and more

In today’s briefing:

Insignia Financial (IFL AU): CC Capital Wades In With A $4.30/Share NBIO
Selected European HoldCos and DLC: 2024 Report
Iron Ore Tracker (6-Jan-2025): What Does the New Year Hold in Store For Iron Ore

Insignia Financial (IFL AU): CC Capital Wades In With A $4.30/Share NBIO

Last month, wealth manager Insignia Financial (IFL AU) announced – and subsequently rejected – a A$4.00/share non-binding and indicative proposal from PE outfit Bain Capital.
The question was whether Bain returned to the well, in a space where Regal (RPL AU) recently binned its Platinum (PTM AU) tie-in; and Perpetual (PPT AU)‘s carve-out has hit a snag.
Roughly two weeks after that Bain rejection, US-based asset investment manager CC Capital Partners has now tabled a A$4.30/share, in cash, non-binding Offer. That’s probably enough for Insignia to engage.

Discounts to NAV of covered holdcos mainly tightened during 2024. Discounts to NAV: C.F.Alba, 11.8% (vs. 50.8% as of Y/E 2023); GBL, 40.9% (vs. 37.4%); Heineken Holding, 15.8% (vs. 16.7%);
Industrivärden C, 5.5% (vs. 5.5%); Investor B, 4.5% (vs. 12.8%); Porsche Automobile Holding, 32.2% (vs. 36.6%). Rio DLC spread tightened to 23% (vs. 24.2%).
What seems interesting (unchanged views): Porsche SE vs. listed assets and the Rio DLC (long RIO LN/short RIO AU).

We expect iron ore to remain rangebound between 90 and 110 USD/ton in FY25, which is in line with the band it has maintained over the past six months.
Iron ore players like Vale (VALE US) and Fortescue Metals (FMG AU) can maintain high single-digit dividend yields at USD 100/ton. We see short-term opportunities in these names.
For small-cap specialists, check out our research on Fenix Resources (FEX AU): Positive Developments At Iron Ridge And Other Catalysts. The company (trailing 5x PE) is poised to triple its production.

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