Key Updates in Catalyst Driven Investing – 10 Dec 2018

  1. Graincorp Ltd (GNC.AX) is weighing up the $2.4billion takeover offer from an Australian investment syndicate which equates to $10.42/share. The offer is contingent upon some complex financing arrangements coming through, with insurer Allianz taking on the agricultural risk to underpin the capital structure. We currently own a position in the company from $7.50/share. We will be releasing an article on this shortly.
  2. Altria (MO) is currently in early talks to acquire Canadian Cannabis Company Cronos (CRON). No details of a potential price have emerged.
  3. Bunge Ltd (BG) is preparing to replace it’s CEO as the company faces pressure from activist investors.
  4. Elliott Management has taken a position in Bayer AG shares, but has not commented on what it intends to do with the stake at this point. They have been trying to get an appointment with the Company CEO but have not been able to do so.

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Merger Arbitrage Candidates

Target Ticker Parity Spread Deal Terms
United States
Oclaro OCLR $9.54 $1.28 $5.60 Cash + 0.0636 LITE shares
Stewart STC $46.62 $5.56 50% Cash + 50% FNF Stock (1.2850 FNF stock exchange ratio)
Nxstage Medical NXTM $30.00 $1.14 Cash
IDT Inc IDTI $49 $1.04 Cash
China Customer Relations Centers Inc CCRC $16 $2.89 Cash
United Kingdom
Shire PLC SHP.L £49.00 £3.65 £21.75 Cash + £27.26 Takeda Shares
Australia
Fairfax Media FXJ.AX $0.939 $0.279 Cash + Nine Stock
Healthscope Ltd HSO.AX $2.36 $0.14 Cash
Greencross Ltd GXL.AX $5.55 $0.20 Cash
Graincorp Ltd GNC.AX $10.42 $1.25 Cash