In today’s briefing:
- MV Global Junior Gold Miners Index Rebalance: Stocks at Their Highs
- Santos (STO AU): XRG Consortium’s Big Offer; Index Impact
- MV Australia Equal Weight Index Rebalance: MinRes, Pilbara Deleted as Trade Nears A$300m
- Paladin Energy (ASX: PDN) – Ramp-Up Progressing Amid Strong Uranium Tailwinds & Optionality
- Santos Ltd (STO AU): FIRB Approval For XRG’s Tilt Will Be No Pushover
MV Global Junior Gold Miners Index Rebalance: Stocks at Their Highs
- There are no constituent changes for the VanEck Vectors Junior Gold Miners ETF (GDXJ US) in June but there are plenty of float and capping changes.
- Estimated one-way turnover is 4.1% resulting in a round-trip trade of US$528m. There are 5 stocks with over 1x ADV to trade from passive trackers.
- The sell flows in Evolution Mining (EVN AU) will partially offset the buying from the passive S&P/ASX 50 Index trackers.
Santos (STO AU): XRG Consortium’s Big Offer; Index Impact
- A consortium comprising ADNOC and Carlyle have offered US$5.76/share (A$8.8807/share) to take Santos Ltd (STO AU) private. That values Santos equity at A$28.8bn and an Enterprise Value of A$36bn.
- With the offer price at a premium of 28%-44% to last and VWAPs, and the Board supporting the offer, this looks like a done deal.
- Santos Ltd (STO AU) is a member of all the major S&P/ASX indices and there will be ad hoc inclusions to the indices at the time of the delisting.
MV Australia Equal Weight Index Rebalance: MinRes, Pilbara Deleted as Trade Nears A$300m
- Mineral Resources (MIN AU) and Pilbara Minerals (PLS AU) will be deleted from the VanEck Vectors Australian Equal Weight ETF (MVW AU) after the close on 20 June.
- The two deletions, capping and float changes result in a one-way turnover of 5.03% at the rebalance. That leads to a round-trip trade of A$294m.
- Pilbara Minerals (PLS AU) is also a deletion from the S&P/ASX 50 Index at the same time and there will be more passive selling from those trackers.
Paladin Energy (ASX: PDN) – Ramp-Up Progressing Amid Strong Uranium Tailwinds & Optionality
- Paladin reported a Q3 FY25 net loss of US$38M, impacted by non-cash impairments and ramp-up costs, though production at Langer Heinrich hit post-restart highs.
- Management targets steady-state output of ~6 Mlb by FY27, with uranium demand set to outpace supply driven by new reactor builds and SMR adoption.
- At core EV/EBITDA of ~2.8x on US$70/lb uranium, valuations appear undemanding relative to long-life assets and sector-leading leverage to uranium prices.
Santos Ltd (STO AU): FIRB Approval For XRG’s Tilt Will Be No Pushover
- Aussie O&G producer Santos Ltd (STO AU) has announced a non-binding Scheme from XRG, which comprises Abu Dhabi’s National Oil Company, Abu Dhabi Development Holding Company, and Carlyle
- The consortium is offering US$5.76 (A$8.89)/share, a 28% premium to last close. Initial Offers were pitched at US$5.04/share, followed by US$5.42/share.
- Confirmatory due diligence has been afforded. A firm bid would require a multitude of reg approvals in Australia, PNG, and the US.
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