Ben Bailey

@toy59496 @99Proble @trade4a_livin I’ll give Luke the heads up he’s going to have to move desks!

@BaileyHLAM @99Proble @trade4a_livin Like I said, smartest guys in the room, although I'm catching up... You may need to make more room in the office.

$IFL dipping a bit today. $4.80 binding bid and 6 weeks to close. 4% yield to close from low 460s today. Do you see any real deal risk left in this one @toy59496 I would think the upcoming scheme vote would be a mere formality at this point.

@99Proble @trade4a_livin @toy59496 You scared me that our office was bugged 😂 not one we own currently

@BaileyHLAM @trade4a_livin @toy59496 🤣 i said i had no idea. And I still have no idea.

@99Proble @trade4a_livin @toy59496 How do you know we're not in there today?

@trade4a_livin @toy59496 There’d a few holders who’ve just ticked over 12 months since this deal was first flagged and are happy to leave with their discounted gains. Doesn’t explain why harvestlane aren’t in there today tho

@kingfishcap Yeah, the adjustment mechanism means no need to hedge in advance of the exchange ratio being finalised late next month. Implied value will fluctuate from the 9.68c thereafter.

Leave some borrow for me! But I was actually thinking of having it unhedged. The consideration is fixed in terms of the target right? Because since we'd have to long target short bidder, there's possibility that the bidders sp goes up albeit while targets' sp closes some of the arb. But that may result in cancelling out the returns because of the hedge. Bidders sp is very volatile as well as industry too so definitely a possibility.

Solely focusing on ASX small to nano caps this upcoming year. What I'm seeing here is ridiculously good. Just this past week: Co's announcing they will retire 30% of MC - off market - at higher price (sh who don't take up offer get 30% more equity to a 7x P/E biz for free), directors buying 19.9% (~$12mil) @ 15% premiums to last close, likely 40% returns in 4 months via capital returns only (but there's like $3k available on the ask rn, I got filled very slowly), a 50% return cross exchange merger arb (with fully hedgeable exposure) that should be trading at maybe 10% if that. Crazy land but makes me confident I will hit my goal of 30% irr on invested capital in 2026, though I think majority could too with small $.

@fabreres download.asic.gov.au/media/ydql4opa… RG 9.352 - 9.364 This is for a takeover bid, however the scheme booklet is the equivalent disclosure document in SoA and similarly regulated as such. Leans in to Mayne's Panel application for the 602 breach

“Seeking” is evidently “seeming”, sorry; but I still don’t know what that claims means.

$MYX.AX: KWM has issued two separate updates assessing the FIRB / stale vote issue: kwm.com/content/dam/kw… /1

$MYX.AX : Takeover Panel / NBIO Salisbury Plant To explain what went on today... The Takeover Panel has various powers under s657D of the Corporations Act to make various orders if it determines there has been "unacceptable circumstances" Those powers do include extending the termination date of the SID past the 20 Nov, directing that MYX be allowed to engage with the FIRB, or any other direction to the relevant parties that it thinks is appropriate. However it cannot force the FIRB or Treasurer to approve the deal. This is a very interesting development because it has the potential to result in various directions being made to Cosette given it is not acting in good faith in attempting to extract itself from its bargain. The other development is the offer to purchase the Salisbury plant by IDT Australia. IDT is the obvious Australian purchaser given it also has TGA and FDA approval and also formulates and packages drugs. In fact in some ways it's capacity is broader than Mayne. It is extremely unlikely that this is the only NBIO that Mayne has received. However, Mayne is unable to comment on the matter because they are bound by the SID not to engage other suitors. And that's why only third parties can communicate to the media about any offer made to Mayne. The purpose of the NBIO(s) is to reassure the Treasurer that there are other suitable purchasers for the Salisbury factory should Cosette dispose of the factory. Cosette claims it will shut it down which is obvious fantasy given that is a profitable venture. The end game is not to get FIRB approval with conditions but just to get FIRB approval. A FIRB refusal would be catastrophic for the Salisbury factory because it will be forevermore impaired by a national security and implied employment obligation which will dramatically reduce its value to Cosette, Mayne, and any other acquirer. If this occurs Cossette will have got away with exiting their agreement, depriving shareholders of $250m, obtaining a vast array of confidential information from a competitor, and then leaving the primary Australian asset of that competitor as seriously impaired. By impaired I mean no rational investor will put more money into the Salisbury factory given the limited ability in the future to convert it to capital gain given the FIRB conditions. What would occur is that it would be divested into its own entity to decay and the rest of the company put into a separate entity so that it is inoculated from these national security and employment conditions. Rational investors would put their money into other ventures that are not impaired by these conditions. It would be a breakup and sale of Mayne at a reduced value and a gradual destruction of the asset which is exactly the opposite of what the government proposes. It is important to recognise that Mayne does not currently have any of these obligations and the intention of the government to impose them effectively is a grab from shareholders of $250m in value, instead of the nationalising the facility at their own cost if they believe it's so important. The strategy above allows the government to have a face-saving solution and that solution is to recognise that there are Australian-based parties who can purchase the factory if Cosette claims it will shut it down, along with a takeover panel application to give sufficient time for this to play out and be directly communicated to the Treasurer. And so the double punch... s657D www5.austlii.edu.au/au/legis/cth/c…

"Australia’s true national interest lies in transparency, consistency, and restraint. Governments serve the economy best not by intervening in boardrooms but by setting clear, stable rules and keeping to them." MYX.AX thewest.com.au/opinion/peter-…

$MYX.AX very very strange development...5 days ago the final decision was being pushed out to Dec...now FIRB saying they are ready to rule by Nov7, or maybe Nov14...a date seemingly designed to meet the long stop date for the bid... announcements.asx.com.au/asxpdf/2025110… Call me dumb but once more into the breach boys, picked up a few this PM, think this one has a pulse 🤪🤪

The standard you walk past is the standard you accept. This decision, unchallenged, would have consequences for all Australian investors. $MYX.AX

@briankirsty Of course it's nonsense $MYX.AX foreigninvestment.gov.au/sites/foreigni…

@BaileyHLAM gather you saw this which seems nonsense.

@toy59496 Good to hear Robin, appreciate it. We're undoubtedly not the only ones working to get to the right outcome here.

@BaileyHLAM Quite a few of us are working in the background to see what we can do Ben. The fat lady hasn't sung yet...

Preserving the integrity of our capital markets and legal systems is undoubtedly of great national interest.

@toy59496 @briankirsty We have and it's not just us either afr.com/companies/heal…

@briankirsty Yes they should

Good news for the Aussie M&A market! $MYX.AX

Fresh off the press

@fmcbill Forever a classic

tonight's events give reason to repost this amazing opinion piece back in the day: afr.com/chanticleer/li…

Breaking: The $36.4 billion takeover bid for Santos has fallen through after Abu Dhabi's XRG walked away from the deal ebx.sh/iDUgeY

@toy59496 @TRAVmoneyofmine @HarvestLaneAM Again, thanks for the kind words Robin Wrt the size/capacity issue, we will close the fund off to new investment before returns are impacted, and are on track to do so in the next year or two (I hope!). Any new strategy or market will likely be a new product Happy M&A hunting!

Thank you for contributing Ben. I've watched all the Harvest Lane videos and read your newsletters and it is almost inevitable that you will get a significant fraction of my personal worth when I'm older and greyer. I appreciate that you do not want to disclose proprietary information on targeting M&A candidates, and nor should you. However I suspect your proprietary solution is much more useful in detecting special situations as hard M&A candidates are announced to the market so by definition can be found with effort, whereas special situations have to be identified. My question in detecting M&A opportunities is really about reducing effort compared to a brute search of ASX announcements. So it is about time rather than technology. Further, I think the value add for Harvest Lane is not necessarily in identifying opportunities but rather determining the viability of the opportunity and subsequent risk management. I also like the transparency of the business in that you directly communicate performance including when it turns against you. I think the business has a lot of respect in the community including mine. There is also that little problem that your strategy has a yield that will asymptotically decrease with increased FUM.... In other words there is a size effect so eventually you will be cannibalized by your own success. Having said that you could probably broaden your search strategy outside of Oceania but there is a very different corporate law framework in other countries. But back to the original question... I am sure there are plenty of proprietary systems to identify M&A candidates although I'm not familiar with most of them, and perhaps other people can suggest some that they use. I put a couple below for people's interest but do not warrant any of them. This is a proprietary system that I have never used: intellizence.com/product/merger… Market screener is not too bad: marketscreener.com/news/companies… This site can show you US possibilities but usually in retrospect: stockanalysis.com/actions/acquis… All suggestions welcome.

Merger Arbitrage: how to detect candidates?? I thought it might be useful to discuss various strategies to detect hard acquisition targets useful in merger arbitrage. "Hard" acquisition targets are differentiated from "soft" acquisition targets by virtue of having a binding announcement which reduces the uncertainty of closure. Detecting the large acquisitions is straightforward because it will be announced in the major papers like the AFR. However these acquisitions generally have smaller yields because the investment banks tend to be involved with leverage which gives minimum yield for the smaller investor. So generally our interest is in smaller companies that will have higher yields and are of no interest to the larger institutions because it won't move the needle for them. The question then becomes how to detect them. We have discussed the AFR street talk. A second method is searching ASX announcements for keywords like "binding", "scheme" or "acquisition". A third method is looking at smartkarma which has a Monday arbitrage announcement. Having followed this process for some time now I estimate I pick up 85% of small company acquisitions. However some definitely slip through primarily because the announcement does not necessarily disclose these keywords. Two recent examples are $PEK and $XAM: the announcement of these two companies did not use my keywords, was not reported in the AFR, and did not come up on Smartkarma Monday arbitrage. The $XAM announcement had "Recommended A$0.08 per share cash offer" as the title (see below) which did not come up on my filters and simply adding keywords will likely bring up too many irrelevant announcements. The failure of my search criteria was particularly unfortunate for $PEK which had an exceptional yield with the recent uplift in acquisition price. $XAM had a much lower yield but the observant watcher would have noticed a put arrangement that was almost certainly was leading into some sort of competitive acquisition (a soft target). Both of these situations would have been of high interest to the retail investor as they are outside the scope of the institutions (eg MFUG) with the possible exception of Harvest Lane. So the question for people is how do they go about detecting arbitrage opportunities? How do YOU find companies that have a binding arrangement to be acquired? All comments welcome.

@TRAVmoneyofmine @toy59496 @HarvestLaneAM Cheers Trav. We’ve spent over a decade developing a tech stack for this strategy at significant cost. A fourth alternative to Robin’s suggested methods is to just avoid all the hassle and let us do it for you…

@toy59496 2/2 @HarvestLaneAM are the local goats here and their shot selection gets better with time, something the tourists (like me) can't replicate. I also doubt international competitors will be as good as HLAM locally - small cap deal arb, shot selection is everything cc @BaileyHLAM