Daily Brief Energy/Materials: Strike Energy, Rio Tinto PLC, Metals Acquisition , Hawkins Inc, Seadrill , Revoil , Lake Victoria Gold , Hellenic Petroleum Sa and more

• Shareholders have approved Costa Group Holdings (CGC AU)‘s acquisition by Paine Schwartz Partners and the stock is expected to stop trading after the close on 8 February.
• Costa Group Holdings (CGC AU) will be replaced by Strike Energy (STX AU) in the S&P/ASX 200 (AS51 INDEX) at the close on 8 February.
• There will be positioning in Strike Energy (STX AU) but we do not expect it to be excessively large and there could be some outperformance over the next week.

• The discounts to NAV of covered holdcos have mainly tightened during January. Discounts to NAV: C.F.Alba, 47.5% (vs. 49.1%); GBL, 37.1% (vs. 36.6%); Heineken Holding, 16.6% (vs. 16.7%); 
• Industrivärden C, 3.8% (vs. 5.4%); Investor B, 7.9% (vs. 13.5%); Porsche Automobile Holding, 42% (vs. 37.1%). The spread of Rio DLC widened to 25.2% (vs. 24.2%).
• What seems interesting: in holding trades, GBL/vs. listed assets, Porsche SE/vs. listed assets and the Rio DLC: long RIO LN/short RIO AU.

• Metals Acquisition (MTAL US) is looking to raise up to A$300m (US$197m) through its ASX secondary listing.  
• The proceeds will be used to repay Glencore’s deferred consideration facility for the MTAL’s acquisition of its CSA copper mine, amongst other uses.
• In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

• Hawkins (HWKN) reported fiscal third quarter (December) results benefiting from higher mix of water treatment sales as the industrial segment dealt with its seasonal soft period
• HWKN has grown its water treatment segment through acquisitions including several made towards the beginning of the December segment
• Water treatment sales were approximately $9 million less than expected due to the timing of acquisitions closing and their sales contribution during a seasonally soft quarter for the segment

• The contract environment is proving advantageous for Seadrill (SDRL) with the Company announcing two more contracts
• We estimate one of the contracts has a day rate of $500,000 and should result in other bidding activity to reach and eventually exceed this level in 2024
• The day rates SDRL has announced for the latest contracts, along with the two contracts in December 2023, demonstrate there is demand to pay the higher day rates 

• Revenue decreased by 12.3% in 9M 2023 standing at EUR 602.22M (vs 686.46M in 9M 2022), resulting from a combined drop in the fuel prices and volume sold.
• Cost of revenue decreased by a similar rate resulting in only a slight reduction of Gross Profit by 2.7%
• However, EBITDA decreased by 11.1% to EUR 9.08M (vs 10.22M in 9M 2022), EBT fell by 57.6% at 2.23M (vs 5.28M in 9M 2022), and Net Income by 57% at 1.79M (vs EUR 4.16M in 9M 2022).

• LVG’s strategic partnerships & recent acquisitions have set the Company up for a transformational 2024.
• The Company has substantial upside through its partnership with Barrick Gold as well as other exploration potential.
• Lake Victoria Gold (LVG:TSXV) is a Canadian exploration and development company focused on the growth and consolidation of the Lake Victoria Goldfield in Tanzania.

Hellenic Republic Asset Development Fund (HRADF) and Paneuropean Oil & Industrial Holdings (POIH) have announced that they have sold 33.6m shares in HELLENiQ ENERGY, representing 11% of the existing ordinary shares. These were sold via an international private placement at a price of €7.00 per share. Although this is a third-party transaction, this will benefit the liquidity of HELLENiQ ENERGY’s shares.