– Telecity (TCY LN) / Equinix (EQIX US): Telecity confirmed last Friday that Equinix has received Phase I clearance from the European Commission for its proposed acquisition of TelecityGroup. The Scheme Document will be posted before the end of November 2015: TelecityGroup now expects completion of the acquisition by Equinix in the early part of the previously indicated H1 2016 period. As flagged by us before, this EC Phase 1 clearance represented last and only hurdle for January 2016 closing – with scheme docs to come within next 2 weeks, we expect Telecity EGM/Court Meeting to be held just before or after Christmas period, with deal closing in first 30 days of January 2016 – continue to set up above GBp 25 for quasi risk-free 2% return for 2 months (0.0336 EQIX + GBp 572.5 – TCY, with GBp 4 dividend loss on EQIX’ $1.69 ex 07-Dec-15).
– Syngenta (SYNN VX): Very muted analyst and investor response after last Friday’s news reports that Chemchina was making a move on Syngenta. We continue to believe that market underestimates the right, opportunistic timing for strategic and long-term value Syngenta offers to the Chinese or other suitors. Would continue to have (small) initial position at current levels.
– BG Group (BG/ LN): Couple of marginal news items ahead of the expected (conditional) clearance by Australian ACCC on Thursday 19 November:
i) Telegraph reported that Qatar Investment Authority has offloaded shares in Shell and BG worth nearly £1bn in recent weeks, raising fresh questions over whether the oilgiants’ proposed mega-merger has the support of major shareholders. Feels largely irrelevant and editorial article more than week after Qatar notified its stake sales as sale mostly a portfolio monetising/ rationalisation exercise by Qatar .
ii) Sydney Morning Herald reported that BG, CNOOC and Tokyo Gas are to invest A$1.7b in Queensland Gas Fields. This shows that BG has not deviated from investment required to support the QCLNG project, even as it is set to be acquired by Royal Dutch Shell and as returns from the venture are squeezed by low commodity prices. Irrelevant for deal closing/probability, merely supports BG’s standalone value and investment potential partners see in Queensland.