Strong First Day of Trading for SmallCap Aussie Split
Today marked the first day of regular trading for Graincorp Ltd (GNC AU) and its Spinoff United Malt Group Ltd (UMG AU) after trading on a when-issued basis since March 26. We believe this separation paves the way to higher valuations for either company as they seek being taken over by larger players, though until that comes through they will continue to operate as leaders in their respective industries. Read on for more details on the value created on their first regular day of trading.Previous Takeover Bid & Friendly Activist Drive GNC to Separate Malts Segment
UMG Avoids Commodity Classification Once Separated from GNC's Operations
Both Entities are Potential Takeover Targets / Separation Simplifies Process
First Day of Regular Trading April 2, 2020 / +12% Return Vs. ASX Index's -2%
UMG AU Trading Toward Bull Case Target Price / UMG AU is a Current Spinoff Model Portfolio Holding
GrainCorp is a food ingredients and agribusiness company. Co. focuses its activities on three main grains (wheat, barley and canola). Co.'s reporting segments are: Storage and Logistics, which include grain receivals, transport, testing, storage of grains and other bulk commodities; Marketing, which markets grain and agricultural products and operates grain pools; Malt, which produces malt products, provides brewing inputs and other malting services, sells farm inputs, and exports malt; and Oils, which includes the processing and crushing of oilseeds. Co. also has a 60.0% joint venture interest in Allied Mills Australia Pty Ltd, a supplier of milled edible flour for human consumption.
The Edge Group - Global Fundamental Catalyst Investing. The Edge provides investors with access to hidden corporate value from Global Special Situations using a pioneering approach to investments. Founded in 2005 by fund management and investment banking professionals to provide high quality, private equity-level research on Global Corporate Divestitures for the benefit of fundamental event-driven, growth and value-oriented investors in this difficult to track, but proven investment space.
The Edge will look to screen and analyze include Spinoffs; Reverse Morris Trusts; Squeeze Outs; Privatizations; Demutualization; Deep Discounted; Rights Issues; Rights Offering; Restructuring; Insider Purchases / Buying Change of Management / CEO Change; Deteriorating fundamentals; Post-Bankruptcy; Reorganization; Tender Offer; M&A Deals; Secondary Offering; Share Swap; Thrift Conversions; Share Buybacks; Activist; Mergers. All analyzed from a fundamental point of view.
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