In today’s briefing:
- Mayne Pharma (MYX AU): Twists and Turns as Cosette Chases a Get-Out-Of-Jail-Free Card
- Virgin Australia IPO – Not Terribly Exciting, After Significant Items Adjustment
- Spartan Resources (SPR AU): Scheme Vote on 11 July
- Spartan Resources (SPR AU): 11th July Vote On Ramelius’ Offer
Mayne Pharma (MYX AU): Twists and Turns as Cosette Chases a Get-Out-Of-Jail-Free Card
- Mayne Pharma (MYX AU) disclosed that Cosette served a scheme termination notice. Mayne maintains that a material adverse clause was not breached and considers the termination notice invalid.
- The Cosette MAC breach claims likely hinge on establishing that forecasts provided during due diligence are materially lower than the unaudited management accounts. Precedents do not favour Mayne.
- While the last close price (A$4.48) is below the undisturbed price (HK$5.41), there remains downside. My estimated deal break valuation range is A$3.26-A$4.00.
Virgin Australia IPO – Not Terribly Exciting, After Significant Items Adjustment
- Bain Capital is looking to raise around US$440m via selling some of its stake in Virgin Australia Holdings (VAH AU).
- Virgin Australia is the second largest airline group operating in the Australian aviation market, with an average 32% domestic RPT capacity market share in CY24.
- In this note, we look at the company’s past performance and provide our thoughts on valuations.
Spartan Resources (SPR AU): Scheme Vote on 11 July
- The Spartan Resources (SPR AU) IE considers Ramelius Resources (RMS AU)’s offer (A$0.25 cash per share + 0.6957 RMS shares per SPR share) fair and reasonable.
- The offer is conditional on SPR shareholder approval. The vote remains low-risk and is aided by irrevocables (16.87% of outstanding shares).
- This is a done deal. At the last close and for a 31 July payment, the gross/annualised spread is 0.8%/5.0%.
Spartan Resources (SPR AU): 11th July Vote On Ramelius’ Offer
- On the 17th March, Spartan (SPR AU) agreed to merge with Ramelius (RMS AU). The cash/scrip merger combined operations around the Mount Magnet and Dalgaranga region in Western Australia.
- The implied price of A$1.78/share was a 27.5% premium to 30-day VWAP. The deal arrived after Spartan was outbid for Karora (KRR CN), and Spartan rebuffed Westgold (WGX AU)‘s approach.
- The Scheme Booklet is now out, with a Scheme Meeting on the 11th July, and expected implementation on or before the 31st July. The IE (BDO) says “fair & reasonable“.
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