In today’s briefing:
- Rio Tinto (RIO AU/LN): Shareholders To Vote On Merits Of Unification
- Rio Tinto (RIO AU/RIO LN): Unification Index Flows
- Is Homeplus Debacle a Key Negative Tipping Point for MBK?
- BP’s Strategy Reset Stumbles as Dividend Cut, Oil & Gas Output Target Disappoints
- Initiation – Moresco (5018 JP)
- Annual Tire Company Results Show Pace Of Change
- Zephyr Energy Plc (AIM: ZPHR): Key Paradox well test results expected in April
- Valeura Energy (TSX: VLE): Investor visit: adding depth and breadth
Rio Tinto (RIO AU/LN): Shareholders To Vote On Merits Of Unification
- Palliser Capital, which reportedly holds ~$300mn in Rio Tinto Ltd (RIO AU/LN) shares across its dual-head structure, has campaigned for near-on a year to unify the primary listing in Australia.
- Palliser’s reasonings (and others) to unify make sense, such as access to stock-based mergers and eliminating franking wastage. A recent independent assessment from Grant Thornton is also supportive of unification.
- Shareholders will vote on the resolution on 3rd April for UK-listed shares and 1st May for Australian-listed shares. The UK line holds the key to the vote outcome.
Rio Tinto (RIO AU/RIO LN): Unification Index Flows
- At the upcoming AGM, Rio Tinto Ltd and Rio Tinto PLC shareholders will vote on the company commencing a review on the benefits vs costs of Unification.
- Palliser Capital has been pushing for Unification while the Rio Tinto Board has recommended that shareholders vote against Resolution 21/24 citing tax costs among other reasons.
- If the Unification completes, S&P/ASX trackers will need to buy Rio Tinto Ltd (RIO AU) while UKX Index (UKX INDEX) trackers will sell Rio Tinto PLC (RIO LN). Net positive.
Is Homeplus Debacle a Key Negative Tipping Point for MBK?
- In this insight, we discuss how the Homeplus debacle is causing a major negative sentiment on MBK Partners from both the Korean government and the media.
- This negative sentiment has grown so much that it could have a legitimate negative impact in the upcoming proxy vote for the control of Korea Zinc.
- The Korean government has targeted MBK for tax probe. Plus, a coalition of securities firms is expected to file a lawsuit against Homeplus and MBK.
BP’s Strategy Reset Stumbles as Dividend Cut, Oil & Gas Output Target Disappoints
- BP will increase oil and gas spending to USD 10 billion annually through 2027, comprising 66%-70% of total capex, while slashing renewable energy investments by over USD 5 billion.
- BP reduced its quarterly buybacks to USD 0.75–1 billion from USD 1.75 billion and lowered annual capex to USD 13–15 billion through 2027.
- Elliott Investment Management is reportedly dissatisfied with BP’s strategy reset, criticizing it for lacking urgency and ambition, potentially prompting further strategic adjustments from the company.
Initiation – Moresco (5018 JP)
- MORESCO Corporation (hereinafter referred to as “MORESCO” or “the Company”) is a R&D-oriented company that has developed products boasting market-leading shares in Japan, such as fire-resistant hydraulic fluid for the steel and automotive industries and liquid paraffin used as ingredients in cosmetics, with the aim of achieving domestic production of special lubricants.
- In recent years, the Company has successfully brought to market water soluble die casting lubricants and environmentally friendly hot melt adhesives.
- In addition, it has also gained a leading global share in synthetic lubricants such as high temperature greases and hard disk surface lubricants.
Annual Tire Company Results Show Pace Of Change
- The tire majors losing volume
- Smaller tire makers gaining prominence
- Most tire majors saw flat or drop in profits
Zephyr Energy Plc (AIM: ZPHR): Key Paradox well test results expected in April
- • FY24 sales volumes averaged 1,149 boe/d including 139 bbl/d of NGL.
- The NGL sales were higher than we were anticipating (~100 bbl/d) but FY24 production of 1,052 boe/d was impacted by downtime experienced in the Williston Basin in 4Q24 due to extreme weather in the area.
- 4Q24 net production was 829 boe/d (plus NGL that we estimate at 90-100 bbl/d).
Valeura Energy (TSX: VLE): Investor visit: adding depth and breadth
- • Valeura hosted an investor trip to its operations in Thailand earlier this month.
- The visit underscored three key aspects: (1) the extensive experience of the management team, (2) the strong relationships with Thai authorities, and (3) the substantial breadth of its assets, offering more potential than previously anticipated.
- • Greg Kulawski, Valeura’s COO, brings extensive experience to the company’s shallow water operations in Thailand.
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