In today’s briefing:
- Nifty IT Index Rebalance: Oracle Financial Services Takes a Beating but Replaces L&T Tech
- Mayne Pharma (MYX AU): Cosette Pharma’s Binding Offer at A$7.40
- Last Week in Event SPACE: Shinko Electric, REA Group, Macromill, CNBM, Prosus/Tencent
- Domain Holdings (DHG AU): CoStar Raids the Register and Launches a NBIO at A$4.20
- SG Fleet (SGF AU): Scheme Vote on 8 April
- (Mostly) Asia-Pac M&A: Domain Holdings, Mayne Pharma, Tam Jai, PEC Ltd, Canvest, Fuji Soft, Proto
Nifty IT Index Rebalance: Oracle Financial Services Takes a Beating but Replaces L&T Tech
- In line with our forecast, Oracle Financial Services (OFSS IN) replaces L&T Technology Services Limited (LTTS IN) in the Nifty IT Index (NSEIT INDEX) at the March rebalance.
- L&T Technology Services (LTTS IN) is also being excluded from the F&O segment at the close on 27 March. Open interest is ~900k shares and there will be unwinding.
- Passive trackers will need to trade between 0.5-0.6x ADV in the stocks. Impact increases to 1-2 days of delivery volume.
Mayne Pharma (MYX AU): Cosette Pharma’s Binding Offer at A$7.40
- Mayne Pharma (MYX AU) entered a scheme implementation deed with Cosette Pharma at A$7.40 per share, a 36.8% premium to the undisturbed price.
- The offer is conditional on shareholder and FIRB approval. The vote is low-risk as the two largest shareholders are supportive.
- The offer is reasonable but not a knockout bid. At the last close and for an end-of-May payment, the gross/annualised spread was 2.8%/11.0%.
Last Week in Event SPACE: Shinko Electric, REA Group, Macromill, CNBM, Prosus/Tencent
- Shinko Electric Industries (6967 JP). Done. Finally. Look at whether you could borrow shares just before the close of the tender and short tender and buy back post ex-date
- REA Group Ltd (REA AU) rolls over as Costar Group (CSGP US) bets big on key rival Domain Domain Holdings Australia (DHG AU).
- Macromill (3978 JP)‘s tender extended. Still not a done deal. Look to buy shares at terms with the goal of NOT tendering and owning the back end.
Domain Holdings (DHG AU): CoStar Raids the Register and Launches a NBIO at A$4.20
- Domain Holdings Australia (DHG AU) announced a non-binding proposal from Costar Group (CSGP US) at A$4.20, a 34.6% premium to the undisturbed price of A$3.12 (20 February).
- The bid follows CoStar’s acquisition of a 16.9% stake in Domain on 20 February. Nine Entertainment Co Holdings (NEC AU)‘s support is crucial for its success.
- While attractive to precedent transaction multiples, the offer is light compared to peer multiples. Nine is evaluating the offer and will likely push for improved terms.
SG Fleet (SGF AU): Scheme Vote on 8 April
- The Sg Fleet (SGF AU) IE considers Pacific Equity Partners’ A$3.50 offer fair and reasonable.
- The key conditions are shareholder (Super Group (SPG SJ) and SG Fleet) and regulatory (FIRB, OIO and FCA) approval.
- The offer is attractive compared to peer multiples and represents an all-time high. At the last close and for a 30 April payment, the gross/annualised spread is 1.5%/8.5%.
(Mostly) Asia-Pac M&A: Domain Holdings, Mayne Pharma, Tam Jai, PEC Ltd, Canvest, Fuji Soft, Proto
- I tally 58 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma.
- Four new deals discussed this week: Domain Holdings Australia (DHG AU), Mayne Pharma (MYX AU), Tam Jai International (2217 HK), and PEC Ltd. (PEC SP).
- Key updates/news took place on: Canvest Environmental Protection Group (1381 HK),Fuji Soft Inc (9749 JP), and Proto Corp (4298 JP).
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