Index Rebal Trades & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Equity Analyst with 10+ years experience in fundamental and event-driven research.

On Smartkarma, I mainly publish insights on index flow events. This includes predicting regular and intra-review index changes and formulating market-neutral trading strategies based on flow catalysts. I also cover special situations such as mergers & acquisitions, equity offerings, buybacks, and other corporate restructuring events.

Index Rebal Trades & Special Situations

Mainstream (MAI AU): Three-In-A-Row! Bullseye!

Mainstream (MAI AU): More-Than-Double in Less than 2 Months After Apex Bump

Mainstream (MAI AU): Bidding War Continues as SS&C Overbids for the 4th Time

Mainstream (MAI AU): Massive Overbid by SS&C, Now Vistra Has to Respond

Mainstream Group (MAI AU): Go-Shop Provision Makes It Interesting

Quiddity M&A: Australia Foreign Investment Reforms

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

Mainstream Group Holdings Ltd / Event-Driven

<p>On 9th March 2021, Australia-based third party fund administration services provider <a href="https://www.smartkarma.com/entities/mainstream-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:30611:1" rel="noopener">Mainstream Group Holdings Ltd (MAI AU)</a> announced they had signed a Scheme Implementation Deed to be acquired by Hong Kong-headquartered Vistra in an all-cash deal that valued the company at a market cap of ~A$170mn. The Offer Price was A$1.20/share which I felt was light on a growth-adjusted basis as I discussed in <a href="https://www.smartkarma.com/insights/mainstream-group-mai-au-go-shop-provision-makes-it-interesting" target="_blank" data-smartkarma-citation="insights:48962" rel="noopener">Mainstream Group (MAI AU): Go-Shop Provision Makes It Interesting</a>. </p><blockquote><p><strong>THE TRADE:</strong> I would get LONG at or below A$1.23 during the go-shop period. Since the fall to the undisturbed price is not very large and since the Offer Price appears light on a fundamental basis, I would be tempted to play 'Bumpitrage' during the go-shop period. (<a href="https://www.smartkarma.com/insights/mainstream-group-mai-au-go-shop-provision-makes-it-interesting" target="_blank" rel="noopener">written 9th Mar 2021</a>)</p></blockquote><p>Almost a month later, on 12th April 2021, MAI announced that they had received a superior bid from US-based financial technology company <a href="https://www.smartkarma.com/entities/ss-c-technologies-holdings" target="_blank" data-smartkarma-citation="entities:3464:1" rel="noopener">Ss&amp;C Technologies (SSNC US)</a> at an Offer Price of A$2.00/share which was 66.7% higher than Vistra's original bid of A$1.20. I covered this situation in <a href="https://www.smartkarma.com/insights/mainstream-mai-au-massive-overbid-by-ss-c-now-vistra-has-to-respond" target="_blank" data-smartkarma-citation="insights:50366" rel="noopener">Mainstream (MAI AU): Massive Overbid by SS&amp;C, Now Vistra Has to Respond</a> continuing to be Bullish on the situation as I saw this as a "<em>low-cost Bump option</em>". MAI shares were at A$1.975 and I wrote "<em>I would be long at or below the current trading price</em>".</p><p>Today, MAI announced that SS&amp;C has bumped the Offer to A$2.25/share valuing the company at a market cap of ~U$250mn. </p><div><p><em>More below the fold. </em></p></div><hr><div><div><div class="content-remarks"><p>For more information about M&amp;A rules, regulations, and practices in Australia, please refer to <a href="https://www.smartkarma.com/insights/quiddity-australia-m-a-guide-2019" target="_blank" data-smartkarma-citation="insights:30118" rel="noopener">Quiddity Australia M&amp;A Guide 2019</a> and <a href="https://www.smartkarma.com/insights/quiddity-m-a-australia-foreign-investment-reforms" target="_blank" data-smartkarma-citation="insights:40210" rel="noopener">Quiddity M&amp;A: Australia Foreign Investment Reforms</a></p></div></div></div>

On 9th March 2021, Australia-based third party fund administration services provider Mainstream Group Holdings Ltd (MAI AU) announced they had signed a Scheme Implementation Deed to be acquired by Hong Kong-headquartered Vistra in an all-cash deal that valued the company at a market cap of ~A$170mn. The Offer Price was A$1.20/share which I felt was light on a growth-adjusted basis as I discussed in Mainstream Group (MAI AU): Go-Shop Provision Makes It Interesting. THE TRADE: I would get LONG at or below A$1.23 during the go-shop period. Since the fall to the undisturbed price is not very large and since the Offer Price appears light on a fundamental basis, I would be tempted to play 'Bumpitrage' during the go-shop period. (written 9th Mar 2021)Almost a month later, on 12th April 2021, MAI announced that they had received a superior bid from US-based financial technology company Ss&amp;C Technologies (SSNC US) at an Offer Price of A$2.00/share which was 66.7% higher than Vistra's original bid of A$1.20. I covered this situation in Mainstream (MAI AU): Massive Overbid by SS&amp;C, Now Vistra Has to Respond continuing to be Bullish on the situation as I saw this as a "low-cost Bump option". MAI shares were at A$1.975 and I wrote "I would be long at or below the current trading price".Today, MAI announced that SS&amp;C has bumped the Offer to A$2.25/share valuing the company at a market cap of ~U$250mn. More below the fold. For more information about M&amp;A rules, regulations, and practices in Australia, please refer to Quiddity Australia M&amp;A Guide 2019 and Quiddity M&amp;A: Australia Foreign Investment Reforms

Mainstream (MAI AU): More Competition Forces SS&C to Bump