In today’s briefing:
- Event Driven: Vedanta Ltd: A Story of Wealth Creation Through Demerger
- Play the Timing Sweet Spot Between KOSPI 200 Rebal and Short Selling Coming Back into Play
- Sigma Healthcare (SIG AU): Shareholders Approve Merger; Passives Could Start Buying in Two Weeks
- Dropsuite (DSE AU): NinjaOne’s Binding Offer a Done Deal
Event Driven: Vedanta Ltd: A Story of Wealth Creation Through Demerger
- Vedanta Ltd (VEDL IN) plans a multi-segment demerger to unlock value by separating its aluminum, zinc, oil and gas, steel, and other core operations into standalone entities.
- This restructuring aims to eliminate conglomerate discount, foster specialized leadership, and attract fresh capital, potentially enhancing overall valuations and fueling long-term growth across diversified segments.
- Despite governance concerns and cyclical commodity risks, pure-play listings could catalyze re-ratings, offering heightened returns but requiring vigilance on execution and corporate transparency.
Play the Timing Sweet Spot Between KOSPI 200 Rebal and Short Selling Coming Back into Play
- Short selling returns March 31, after 85% of the KOSPI 200’s rebalancing. Stocks set for removal will be prime short targets.
- Stocks removed have solid liquidity, tight passive impact gaps between them, and with short selling restarting March 31, we could see intensified volume in the short basket.
- With rebalance ahead, price action may start early. Market exposure means aggressive moves could happen before the end of March, so consider building futures positions before short selling resumes.
Sigma Healthcare (SIG AU): Shareholders Approve Merger; Passives Could Start Buying in Two Weeks
- Sigma Healthcare (SIG AU) and Chemist Warehouse (CWG) shareholders have approved the merger with 99.86% and 100% of the votes cast in favour.
- The Second Court Hearing is on 3 February and the merger will be implemented on 12 February, which is when the passive buying could commence.
- Sigma Healthcare has continued to trade higher on a record margin and sales expansion for CWG and expected passive buying that could top A$3bn over the next few months.
Dropsuite (DSE AU): NinjaOne’s Binding Offer a Done Deal
- On 28 January, Dropsuite Ltd (DSE AU) entered a scheme implementation deed with NinjaOne at A$5.90 per share, a 34.1% premium to the undisturbed price of A$4.40 per share.
- The offer is conditional on shareholder and FIRB approval. The vote is low-risk as the largest shareholder has provided an irrevocable.
- The offer is attractive and represents an all-time high. At the last close, for a 20 May payment, the gross/annualised spread was 3.0%/10.3%.
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