– Syngenta (SYNN VX): Benzinga, a US financial media website, reported that according to a source familiar with the matter Chemchina is said to be considering an all-cash offer for Syngenta that may be announced by Friday and expected to be CHF44bn (which translates in about CHF 475-480 per share), trumping a $42 billion buyout offer ChemChina reportedly made for Syngenta in mid-November. HSBC is one bank working on the deal, the source added. Although we somehow question the quality of this media platform/’one sourced article’, some of the contents of the article has some credibility as it stacks up with the Bloomberg November reports with respect to timing (agreement within weeks), consideration (all cash), price (limited bump required). Would cut half the long position at current CHF 389 levels (that were initiated below CHF 360).
– XChanging plc (XCH LN): After Xchanging yesterday agreed to a recommended GBp 190 cash offer from Computer Sciences Corp (CSC) trumping Capita plc’s GBp 160 offer (with announcement this morning that Capita will not raise its offer, and hence be exiting this competitive process), the third horse in the race, EBIX Inc, confirmed this morning its continued interest in making an offer for Xchanging, Although a) CSC has competitive scale advantage over EBIX (given CSC’s EV of $5bn vs EBIX’ EV of $1bn) and b) CSC’s offer includes shareholder irrevocables from Odey, Artemis, Fidelity and T. Rowe Price in respect of 37.19% of total Xchanging shares that only lapse at a revised offer higher than average GBp 211, this remains a competitive situation between 2 large US companies. Also fact that EBIX has very late PUSU deadline (set at day 53 after publication of CSC’s offer document), there is limited downside (as GBp 190 offer to close reasonably shortly after EBIX’ PUSU deadline). Would have some Xchanging at current GBp 191-192 levels (or marginally through CSC’s 190 cash offer) – downside GBp 187-189; upside: GBp 210+.
– Rexam plc (REX LN): Further positive regulatory news flow with deal having been approved by Brazil’s CADE yesterday, and rumours that deal is now heading for EC approval (after parties have been tweaking the divesture package to please the Commission). Remains attractive situation, and continue to have the spread.
– Wincor Nixdorf (WIN GY)/Diebold (DBD US): Diebold’s IR confirmed to us last night that this week’s German Finance Ministry clarification regarding the withholding of taxes for takeovers of German companies resolves the uncertainty about the tax status of Diebold offer for Wincor Nixdorf AG. IR also remained confident about any US antitrust issues (despite highly concentrated market structure) as ‘according to Retail Banking Research’s 2014 figures on the number of ATM’s in service, the combined company would have a similar US market share to the #2 player (NCR). Nautilus Hyosung has the #1 market share.’ Although we appreciate that Wincor/Diebold deal a long-dated 9 months + deal and we stated to exit the Wincer position at deal announcement (above EUR 48), we would look to revisit the spread given it has been widening to 12%+ levels despite positive clarification on the tax angle risk.