Seems like the uncertainties in Europe has cause deals to dry up in Asia.
The most recent ones that was announced was the upgraded deal on Spotless Group in Australia and also another new bidder entering the fray for Hastings Diversified Funds.
The outlook continues to look bleak with Greece going into re-election and the question on whether Greece comply with previous agreements on austerity plans to enable it to acquire the funds from the bailouts agreed.
In recent week, stock indices have typically been going south. Do not expect it to recover anytime soon. However with the events in Greece, we might soon see an end to this financial-crisis-saga.
I would take a cautious view of M&A deals now. Particularly looking at stronger-balance sheet acquirers and checking diligently over any "exit clauses" + prescribed occurrences for MAC clauses
Wednesday, May 16, 2012
Coalworks takeover by Whitehaven
Whitehaven is making an off-market takeover bid of $1.00 for Coalwork shares.
No minimum required % of shares to b accepted. They already have 17.3%
Conditional upon the "strategic advisory" arrangement between Coalworks and Noble can be terminateed without any termination fees.
Coalworks did a a placement at $0.78 in April 2012 to Noble. (Noble now has 9%)
Is there a potential bidding war here? I am not sure but definitely worth a buy as I think there is limited downside.
(The post above was written on 7th May 2012 - Coalworks was trading at $0.99 then)
No minimum required % of shares to b accepted. They already have 17.3%
Conditional upon the "strategic advisory" arrangement between Coalworks and Noble can be terminateed without any termination fees.
Coalworks did a a placement at $0.78 in April 2012 to Noble. (Noble now has 9%)
Is there a potential bidding war here? I am not sure but definitely worth a buy as I think there is limited downside.
(The post above was written on 7th May 2012 - Coalworks was trading at $0.99 then)
Wednesday, April 18, 2012
Castlemaine Goldfields takeover by LionGold Corp of Singapore
LionGold Corp has offered to takeover Castlemaine Goldfields via an all scrip (share) takeover.
It is offering 2 LionGold Corp shares for every 9 Castlemaine shares.
Besides that, LionGold Corp has entered into a Subscription Agreement to subscribe for 11.4% of the enlarged number of shares after the subscription.
Usually I feel that once a party enters into a Subscription Agreement which is not subjected to any precedent conditions, it is more likely that the takeover will happen, as the acquirer has some skin in the game, thus more committed to the cause.
If we price up the deal using Merger Arbitrage Manager,
(there are some limitations as this is a cross border takeover and MA Manager has yet to implement the capability of including FX rates in the deals.. this shall be taken into account for the development of a new version of MA Manager)
It is assumed in this case the FX rates for SGD:AUD is 0.772. The deal should take roughly 3 months to pay out date.
There is a 11% spread to be earned. Usually in a cross-border deal, there is more premium in it unless it is a very big deal where Merger Arb traders around the world would jump on it.
Very possibly though it might be hard to get borrow in the LionGold Corp stock in Singapore, which might explain the massive premium.
The deal is conditional upon 50.1% acceptance, which is a reasonable and not high level. This is not a scheme of implementation thus does not require shareholders to vote.
Adding to portfolio.
It is offering 2 LionGold Corp shares for every 9 Castlemaine shares.
Besides that, LionGold Corp has entered into a Subscription Agreement to subscribe for 11.4% of the enlarged number of shares after the subscription.
Usually I feel that once a party enters into a Subscription Agreement which is not subjected to any precedent conditions, it is more likely that the takeover will happen, as the acquirer has some skin in the game, thus more committed to the cause.
If we price up the deal using Merger Arbitrage Manager,
(there are some limitations as this is a cross border takeover and MA Manager has yet to implement the capability of including FX rates in the deals.. this shall be taken into account for the development of a new version of MA Manager)
It is assumed in this case the FX rates for SGD:AUD is 0.772. The deal should take roughly 3 months to pay out date.
There is a 11% spread to be earned. Usually in a cross-border deal, there is more premium in it unless it is a very big deal where Merger Arb traders around the world would jump on it.
Very possibly though it might be hard to get borrow in the LionGold Corp stock in Singapore, which might explain the massive premium.
The deal is conditional upon 50.1% acceptance, which is a reasonable and not high level. This is not a scheme of implementation thus does not require shareholders to vote.
Adding to portfolio.
Argentina expropriates YPF from Repsol
In an unrelated matter, it is amazing that Argentina has taken the course of expropriating YPF from Repsol. Given that it could have done a takeover via the equity market at fair market value (or excercise certain rights given the government still holds the "golden shares"). Expropriating assets leaves such a negative sentiment that I believe would turn investors away from Argentina. Probably this will benefit Brazil, Mexico and other Latin America countries.
I guess there must be a correlation between rising commodity prices and risk of expropriation. Argentina has been a net importer of oil and has been a huge strain on their fiscal numbers and YPF has been showing declining numbers in production despite political pressures to increase investments to increase production.
One must wonder if Argentina is going to default if it does not appropriate assets. I do not have the numbers at hand but to take such drastic measures, one can either be trying to assert/show their "leftist/reformist" ways or seriously cash-strapped.
I guess there must be a correlation between rising commodity prices and risk of expropriation. Argentina has been a net importer of oil and has been a huge strain on their fiscal numbers and YPF has been showing declining numbers in production despite political pressures to increase investments to increase production.
One must wonder if Argentina is going to default if it does not appropriate assets. I do not have the numbers at hand but to take such drastic measures, one can either be trying to assert/show their "leftist/reformist" ways or seriously cash-strapped.
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