Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

HK Type 4 license through Ballingal Investment Advisors Ltd. 

I'm a highly experienced sell-side analyst with in excess of 22 years of covering Asia Pacific equities, the past 19 years immersed in event strategies encompassing M&A risk arbitrage, directional long/short, stub trades and restructuring.  

My background also includes accountancy (liquidation/bankruptcy/receivership) earlier in my career and as a chief financial officer of a global commodity company based in the US and Mexico.

Pan-Asia Catalysts/Events

An Elders/AIRR Merger Re-Focuses ACCC on Ruralco/Nutrien

Nutrien's Move On Ruralco Makes Agronomic Sense

Quiddity Advisors

Event-Driven

On the 27 February, <a href="https://www.smartkarma.com/entities/4285" target="_blank" data-smartkarma-citation="entities:4285:1">Ruralco Holdings (RHL AU)</a> <a href="https://www.asx.com.au/asxpdf/20190227/pdf/4430v0cv3wwr8q.pdf" target="_blank">announced</a> it had entered into a Scheme Implementation Deed in which <a href="https://www.smartkarma.com/entities/27261" target="_blank" data-smartkarma-citation="entities:27261:1">Nutrien Ltd (NTR CN)</a> had agreed to take Ruralco private at $4.40/share - a 44% premium to last close and the one-month VWAP. The Offer valued Ruralco at A$469mn and an enterprise value of A$615mn. An interim dividend of A$0.10 (the ex-date was the <a href="https://www.asx.com.au/asxpdf/20190514/pdf/44525xkkk5czv3.pdf" target="_blank">30 May</a>) was to be added.
The scheme booklet was dispatched on the <a href="https://www.asx.com.au/asxpdf/20190605/pdf/445mzktsmwqmh2.pdf" target="_blank">5 June</a> (the IE gave a fair &amp; reasonable opinion), and in addition to requiring shareholder approval at a Scheme Meeting on the 17 July, the deal was contingent on the ACCC either approving the transaction on or around the 13 June; or releasing a Statement of Issues (SOI).
Yesterday, the SOI, raising preliminary competition concerns, was <a href="https://www.accc.gov.au/system/files/public-registers/documents/Landmark%20Ruralco%20-%20SOI%20-%2013%20June%202019.pdf" target="_blank">announced</a>.
As expected, the ACCC is assessing the impact on prices, product range and services subsequent to the loss of Ruralco, a major national retail competitor. In addition, it is looking into the reduction of competitors at the wholesale level from the proposed acquisition, and whether the remaining players provide sufficient competition.
The key issue centers on merchandising and the dilution of competition from this transaction. The ACCC had fewer concerns over the amalgamated impact on the agency businesses. 
Ruralco continues to engage with the ACCC and notes the SOI is not a "final decision" and is confident the issues raised can be addressed satisfactorily.
ACCC's final decision will be made on the 15 August and submissions are required to be submitted by the 27 June. The Scheme Meeting is expected to be delayed.
Shares closed down 3.15% to $4.15 yesterday and currently trade at $4.17, to give a gross spread to terms of 5.5% with an annualised spread of ~21% - assuming a revised late September completion - roughly similar to where the annualised spread was prior to the SOI (and with a then-expected implementation date of 6 August).

On the 27 February, Ruralco Holdings (RHL AU) announced it had entered into a Scheme Implementation Deed in which Nutrien Ltd (NTR CN) had agreed to take Ruralco private at $4.40/share - a 44% premium to last close and the one-month VWAP. The Offer valued Ruralco at A$469mn and an enterprise value of A$615mn. An interim dividend of A$0.10 (the ex-date was the 30 May) was to be added.
The scheme booklet was dispatched on the 5 June (the IE gave a fair &amp; reasonable opinion), and in addition to requiring shareholder approval at a Scheme Meeting on the 17 July, the deal was contingent on the ACCC either approving the transaction on or around the 13 June; or releasing a Statement of Issues (SOI).
Yesterday, the SOI, raising preliminary competition concerns, was announced.
As expected, the ACCC is assessing the impact on prices, product range and services subsequent to the loss of Ruralco, a major national retail competitor. In addition, it is looking into the reduction of competitors at the wholesale level from the proposed acquisition, and whether the remaining players provide sufficient competition.
The key issue centers on merchandising and the dilution of competition from this transaction. The ACCC had fewer concerns over the amalgamated impact on the agency businesses. 
Ruralco continues to engage with the ACCC and notes the SOI is not a "final decision" and is confident the issues raised can be addressed satisfactorily.
ACCC's final decision will be made on the 15 August and submissions are required to be submitted by the 27 June. The Scheme Meeting is expected to be delayed.
Shares closed down 3.15% to $4.15 yesterday and currently trade at $4.17, to give a gross spread to terms of 5.5% with an annualised spread of ~21% - assuming a revised late September completion - roughly similar to where the annualised spread was prior to the SOI (and with a then-expected implementation date of 6 August).

ACCC Raises Concerns With Ruralco/Nutrien