Panta Capital

Cadbury plc: The Hershey angle

January 18, 2010
We have looked at Cadbury plc, the UK confectionery company, which is currently being targeted by Kraft Foods. Given Kraft's 19 January 2010 deadline to revise its bid, and Hershey's 23 January 2010 deadline to make a competing offer, we have analyzed the trading opportunities for Cadbury and Hershey with respect to timing, upside/downside and dynamics.

For further discussion and conclusion, please access the Panta Client Section

REpower Systems AG: Suzlon at Play?

January 5, 2010
We have looked at REpower Systems AG, the German wind power company, which is currently 91% owned by Suzlon Energy, the Indian wind power company. We have analyzed the trading opportunities around this situation with respect to timing, upside/downside and dynamics.

For further discussion and conclusion, please access the Panta Client Section


Cimpor SG: Strategic Portugal based cement company in play

January 4, 2010
We have looked at Cimpor SG, the Portugal based cement maker, which received a €5.75 per share cash offer on 18-Dec-09 from CSN, the Brazilian steelmaker and iron smelter.

For further discussion and conclusion on the situation, please access the Panta Client Section. 

IMS Health Inc: Data mining restriction excluded from Healthcare Bill

December 21, 2009
As reported by Reuters on 20-Dec-09, the amendments to the US healthcare bill will exclude the clause that caused IMS shareholders headache over the last couple of weeks and saw the share price dip below the USD 19 level on 11-Dec-09:  
"A closely watched proposal that took aim at the use of doctors' prescribing habits for marketing purposes was excluded."
This should reduce any uncertainty stemming from the healthcare bill jitters surrounding the IMS take-over and reduce the IMS spread to the $22 cash take over price. We remain buyers under the $21 level, assuming completion in Feb-10.

IMS Health Inc: Oversold on the Senate Data Mining Restriction Proposal News

December 14, 2009
We have looked at the IMS Health situation, whose share price dropped more than 18% on Friday 11-Dec-09 before recovering to an end of day price drop of 6%. The price dynamics were attributed to the amendment proposal to the Senate healthcare reform bill from 2 US senators, which effectively would limit the ability of drug companies like IMS Health to capture and use physician prescribing data.  We believe that at the current $20 share price, the share is still oversold, and remain confident that the the deal at $22 will eventually go through in 1Q10.

For further comments on the situation, please access the Panta Client Section.


Shanks Group plc: Short-term short opportunity

December 8, 2009
We have analyzed the Shanks Group plc pre-deal situation. Shanks stated on 07-Dec-09 that it had received a highly preliminary and unsolicited approach from a private equity group regarding a potential cash offer of 135p per Shanks share. We have looked at the upside/downside dynamics for the current 130p share price. Given that the PE firm might have difficulties both to have access to high leverage and to generate attractive IRRs for such a transaction, we believe that there is a risk of no materialization of such a 150p bid (the only level which would be successful in obtaining board and shareholder approval). We believe that a short around the 130p level is an attractive risk-adjusted short duration trade, with limited downside and 20%+ upside in case no (succesful) bid materializes. 

For full analysis (including full LBO analysis), please access the Panta Client Section.


Minerva plc: Attractive upside/downside in London property company bid

November 23, 2009

We have analyzed the Minerva plc situation, which on 17-Nov-09 received an unsolicited 50p or £84.5m cash offer from Kifin Limited, Minerva's 29.9% shareholder. Given the developments for Minerva in the last 12 months, we believe the offer is highly opportunistic . We have looked at the bid history, the upside and possible drawdown for the Minerva investment case, and believe Minerva's current share price represents a buying opportunity for this smaller capitalized company, which might be off the radar for most special situation investors. For full analysis of the situation, please access the Panta Client Section


Hochtief AG: Clear catalysts now to realize value in the Hochtief ex-Leighton holdings stub trade

November 18, 2009
Since Reuters today reported that Hochtief is tomorrow sending out the prospectus for the listing of its concessions infrastructure unit, with investor roadshows set to begin on Friday, we revisited the case of the Hochtief ex-Leighton Holdings strub trade, which is highly undervalued with the very clear catalyst in play now to realize the value mismatch.  For full analysis of the situation, please access the Panta Client Section.

Tandberg ASA: Is the revised NOK170 offer a done deal now?

November 18, 2009
Panta Capital analyzed the revised Tandberg offer situation, and looked whether or not Tandberg's current NOK 162 price actually represents a buying opportunity or not. For full comment, please access Panta Client Section.

IMS Health Inc: Participate in first major LBO deal since 2008

November 12, 2009
On 05-Nov-09 IMS Health Inc, the US healthcare information company, announced it had signed an agreement to be acquired by TPG Capital and the Canada Pension Plan Investment Board for USD 22 cash a share. The agreement was unanimously approved by the IMS Board, and comes after IMS announced on 20-Oct-09 it was exploring a variety of strategic alternatives for the company. The transaction has fully committed financing, consisting of a combination of equity and (principal loan and mezzanine) debt financing provided by Goldman Sachs. Completion of the deal is subject to IMS shareholder approval, regulatory approvals and customary closing conditions and is expected to close by the end of the first quarter of 2010.

Although the Merger Agreement document has not been published yet, we believe there is a very high chance of deal closure of this first large LBO deal since 2008:

* Shareholder approval: Given that after its strategic review, IMS has concluded that a sale is the best option, shareholders will be inclined to tender their shares in the offer: the offer represents premiums of firstly 50% over the $14.67 closing share price on 16-Oct-09, the last trading day prior to the public speculation that IMS was considering its strategic alternatives and secondly 31% over the $16.81 closing share price on 04-Nov-09, the last trading day before the definitive offer was tabled. Ariel Investments, IMS' largest shareholder with 7.1% of IMS shares, has already been quoted that they would back the buyout.
* Regulatory approval: Given the financial nature of the bidders, who have negligible presence in the medical & pharmaceutical intelligence market where IMS is active, we believe the regulatory approvals are pure formalities for this deal to close.

We believe the current $21 price or 4.7% spread is currently driven by firstly the fact that the merger agreement has not been filed yet and secondly that investors remain sceptical of the PE nature of the bidders (with reference to high profile PE acquisitive bids blowing up in 2008). However we believe that as a first major PE/LBO transaction in a while, the bidders are committed to the closing of this deal and that all conditions should be fulfilled. 

Given the short duration of the deal to close, we would be buyers at/under the $21 level to realize the 4.7% net spread (annualized 14% return assuming Mar-10 closing).


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