Tuesday 06 October 2015 by FIIG Research Company updates

Company updates – Dicker Data, G8 Education, Integrated Packaging Group, PMP Finance and Wyuna Water

Further news this week on G8 with the Australian Government Takeovers Panel making a “declaration of unacceptable circumstances” in relation to its takeover bid for Affinity; a ratings upgrade for Wyuna Water; and we have uploaded factsheets for Dicker Data, Integrated Packaging Group and PMP Finance

Takeovers Panel: G8 Education bid for Affinity 'unacceptable'

By Will Arnold

The Australian Government Takeovers Panel released a statement to the media on 6 October, available for download here. The mergers and acquisitions authority has made a "declaration of unacceptable circumstances" in relation to G8 Education's takeover bid for Affinity. 

The Panel has advised the matter is still being investigated and listed a series of unacceptable circumstances in the bid process:

  • There are family links between Ms Jennifer Hutson, the chairperson of G8, and the owner of JB Super
  • There are, or have been, structural links, common investments and common dealings between Ms Jennifer Hutson and each of the parties identified [West Bridge, JB Super, Taxonomy]
  • There were unusual funding arrangements and unusual use of common intermediaries, and;
  • The acceptances of the scrip bid by JB Super and Taxonomy occurred in uncommercial circumstances.

It is possible that ASIC could be involved given the potential market manipulation and contravention of corporate law outlined by the Takeovers Panel - however the Commission has not made any comment.

Wyuna Water’s credit rating has been upgrade to A2

By Alen Golubovic

On 2 October, Moody’s upgraded Wyuna Water’s (Wyuna) credit rating from A3 to A2 with a stable outlook. The Moody’s research release states:

The rating upgrade reflects the considerable increase in revenue and earnings for Wyuna over the medium term following the extension of the Water Filtration Agreement with Sydney Water…which has since been extended by another 15 years to end in 2036…effect[ive] from 1 October 2015.

In May we published Comparing the relative value of indexed annuity bonds which included the possibility of the credit rating. Please see the excerpt below:

Wyuna Water is a special purpose company which has entered into an agreement with the Sydney Water Corporation to design, build, and operate two water filtration plants in Illawarra and Woronora in Sydney for 25 years until 2021. The payment obligations from the Sydney Water Corporation are guaranteed by the NSW state government. We understand the contract is likely to be extended a further 15 years until 2036 which would be a credit positive. There could be a potential rating upgrade for Wyuna rating when the contract extension is finalised and if there is evidence of an improved financial profile for the remaining term of the extended PPP contract. With the potential for a credit rating upgrade, we consider the Wyuna Water 2021 as good relative value for a shorter duration IAB.

*Wyuna Water’s bonds are available to wholesale clients only. 

New factsheets available

Issuer      Factsheet link
Dicker Data AUD senior unsecured bond fixed rate 7.3% 29-September-2019 Factsheet
Integrated Packaging Group

AUD senior unsecured bond floating rate 3M BBSW+4.40% 26-March-2020 Factsheet

PMP Finance AUD senior unsecured bond floating rate 3M BBSW+4.40% 26-March-2020 Factsheet

For more information, please contact your FIIG representative.

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