– Ten Cate (KTC NA): Gilde announces that about 60.55% of Ten Cate’s outstanding shares were tendered – Gilde now has 3 days to announce whether the offer will be extended or terminated (according to Dutch take over law, bidder can only extend an offer period once by minimum 2 and maximum 10 weeks). The acceptance level is touch lower than we had anticipated. Given that Gilde didn’t immediately decide to pull and walk away from the deal (although that could be interpreted as both telling and procedural) and fact that there is limited downside for them to merely extend, deal is not completely dead yet (also witnessed by very muted stock response this morning), and could still get salvaged by limited bump.
– TNT Express (TNTE NA): TNT’s bidder Fedex reported impressive 2Q earnings last night, where Fedex commented that the TNT deal was on track, and it was going through the last required approvals (with main outstanding ones being China MOFCOM and Brazil CADE) and hopes to be closing the deal somewhere in 1H16. After EC didn’t oppose to the deal 2 months ago (by not issuing a Statement of Objections), rest of the regulatory process to get the deal across finish line is in our opinion just a time consuming, box ticking exercise – although Brazil and China will continue to attract some headlines, any issues should be marginal in context of the wider deal rationale (as focus of deal is Europe) given a) in Brazil, the state-owned postal company Correios, is the most dominant force (with other players only marginal anticompetitive potential), and b) in China, most of focus most likely will be on the China-Europe postal routes. Solid arbitrage situation with only uncertainty regarding closing timing – would have around EUR 7.70 or about 3.8% spread – with targeted deal closing Mar-16.
– Tessenderlo Chemie (TESB BB): Local Benelux sell-side commentary confirm and agree with our thesis that yesterday’s ‘merger’ between Tessenderlo Chemie and Picanol is highly flawed, as there are virtually no quantifiable synergies, it will move Tessenderlo back to a holding company structure (with 4 divisions), and that price paid for Picanol’s industrial activities is too high for a cyclical, earnings declining business. Tessenderlo minority shareholders should vote down this deal at next year’s EGM where 75% of present voting shares are required to approve this deal. Given that Luc Tack who is behind this deal and who has already about 30%, opposition has to be at least 20-25% of outstanding Tessenderlo stock to vote this deal down (assuming 80% vote turnout, if more than 20% of outstanding Tessenderlo stock votes against, deal will be off).