In today’s briefing:
- Alcoa (AA US) Makes an Offer for Alumina (AWC AU)
- CSR (CSR AU): Saint-Gobain’s Binding Proposal at A$9.00
- Alumina (AWC AU): Alcoa’s All-Scrip Non-Binding Proposal Seems Opportunistic
- CSR (CSR AU): Saint Gobain Firms $9/Share Bid
- Adbri (ABC AU): CRH/Barro’s Firm Offer
- Valero Energy Corporation: Can The Turnaround In Refinery Operations & The Focus On Renewables Be A Game Changer? – Major Drivers
- Core portal proving resilient, RentPay building scale
- Rent.com.au Ltd – Core Portal Proving Resilient, RentPay Building Scale
- TPL: Cashing in on Production
Alcoa (AA US) Makes an Offer for Alumina (AWC AU)
- Alcoa (AA US) has made a non-binding, indicative and conditional proposal to acquire all shares in Alumina (AWC AU). Shareholders will receive 0.02854 shares of Alcoa for each Alumina share.
- Alcoa (AA US) has entered into an agreement with Allan Gray Australia that gives them the right to acquire 19.9% of Alumina Ltd (AWC AU) at the same swap ratio.
- Alumina Ltd (AWC AU) is a potential delete from the ASX100 Index at the March rebalance and that could provide an entry into the stock.
CSR (CSR AU): Saint-Gobain’s Binding Proposal at A$9.00
- CSR Ltd (CSR AU) has entered a scheme implementation deed with Cie De Saint-Gobain (SGO FP) at A$9.00 per share, a 32.9% premium to the undisturbed price (20 February).
- The offer has a ticking fee of A$0.02 per month (accrued daily) if the scheme’s effective date is delayed beyond 26 June. The offer requires FIRB approval.
- The offer is attractive and represents a 15-year high. At the last close and for a mid-June payment, the gross/annualised spread is 7.4%/28.8%.
Alumina (AWC AU): Alcoa’s All-Scrip Non-Binding Proposal Seems Opportunistic
- Alumina Ltd (AWC AU)‘s non-binding proposal from Alcoa (AA US) is 0.02854 Alcoa shares per Alumina share, implying a value of A$1.15, a 13.1% premium to the undisturbed price.
- Alcoa has been granted a 20-business day exclusivity period. The Board intends to recommend a binding proposal. Allan Gray, the largest shareholder, is supportive.
- While strategically sensible, the offer is not a knockout bid. The headcount test is a risk as retail forums suggest a majority view forming against the offer.
CSR (CSR AU): Saint Gobain Firms $9/Share Bid
- On the 21st Feb, Saint-Gobain (SGO FP) made an indicative Offer to CSR Ltd (CSR AU) shareholders of A$9/share by way of a Scheme, a 34% premium to last close.
- Saint-Gobain and CSR have now entered into a definitive agreement, also at $9/share. The business combination has been unanimously approved by the boards of both companies.
- Conditions include CSR’s shareholder approval and FIRB signing off. No specific mention of ACCC. The transaction is expected to close in the second half of this year.
Adbri (ABC AU): CRH/Barro’s Firm Offer
- Back on the 18 December 2023, construction play Adbri (ABC AU) entered into a process and exclusivity deed with CRH (CRH US) and 42.7%-shareholder Raymond Barro (Chairman).
- Adbri has now entered into a Scheme Implementation Deed with CRH under which CRH will acquire all of the shares in Adbri that the Barro Group does not currently own.
- Conditions include Adbri’s shareholder approval and FIRB signing off. The transaction is expected to close in June of this year.
Valero Energy Corporation: Can The Turnaround In Refinery Operations & The Focus On Renewables Be A Game Changer? – Major Drivers
- Valero Energy Corporation recorded strong financial results for the fourth quarter of 2023 and the highest fourth quarter and full-year adjusted earnings in the company’s history, excluding the results of 2022.
- The refining system achieved a mechanical availability of 97.4%, the highest to date, highlighting the benefits from Valero’s commitment to safe, reliable, and environmentally responsible operations.
- Valero also set a record for sales volume in 2023, capturing around 1 million barrels per day, exemplifying the strength of its branded and wholesale marketing network.
Core portal proving resilient, RentPay building scale
- Rent.com.au Limited (ASX:RNT) is a purpose-led company seeking to empower home renters through its technology platform and a growing number of aligned transactional services.
- The company has reported an 11% increase in H1 FY24 revenue to $1.6m with its transactional platform, RentPay delivering a 137% increase in revenue to $0.22m, driven by a 122% increase in customers and ARPU growth of 18%.
- The search portal reported a positive EBITDA of $0.092m for the half, its best result in two years and up 42% on the previous corresponding period (pcp), while RentPay posted a loss of $1.029m, flat on the pcp, and a 26% improvement on H2 FY23.
Rent.com.au Ltd – Core Portal Proving Resilient, RentPay Building Scale
- Rent.com.au Limited (ASX:RNT) is a purpose-led company seeking to empower home renters through its technology platform and a growing number of aligned transactional services.
- The company has reported an 11% increase in H1 FY24 revenue to $1.6m with its transactional platform, RentPay delivering a 137% increase in revenue to $0.22m, driven by a 122% increase in customers and ARPU growth of 18%.
- The search portal reported a positive EBITDA of $0.092m for the half, its best result in two years and up 42% on the previous corresponding period (pcp), while RentPay posted a loss of $1.029m, flat on the pcp, and a 26% improvement on H2 FY23.
TPL: Cashing in on Production
- TPL benefited from an increase in production rates in the Permian Basin to report better than expected fourth quarter results
- Production has been volatile in recent quarters depending on multiple factors. The steady state of oil above $70 a barrel and improved supply chains has resulted in production rising.
- The boost in earnings has led to TPL building a cash cushion of $725.2 million and creating anxiety for many investors as to what TPL’s management would do next
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