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Note from the MD: Market M&A activity begins to heat up

The ASX 200 surged yesterday off the back of Albemarle’s $5.5 billion bid for Liontown Resources (ASX: LTR), which came in at a 63% premium to their last closing price and brought heat to the whole lithium sector once again. The index closed up 1.04%, as M&A activity is coming to the forefront of the markets minds, investors will be keeping a keen eye on potential targets that almost a year of volatility has created.
The ASX 200 surged yesterday off the back of Albemarle’s $5.5 billion bid for Liontown Resources (ASX: LTR), which came in at a 63% premium to their last closing price and brought heat to the whole lithium sector once again. The index closed up 1.04%, as M&A activity is coming to the forefront of the markets minds, investors will be keeping a keen eye on potential targets that almost a year of volatility has created. United Malt Breweries is considering a $1.5 billion takeover offer, Brookfield has finalised its $18.7 billion acquisition of Origin Energy (which is now subject to FIRB and ACCC approval) and there are talks of a new REIT hitting the boards with the goal of rolling up inefficient self-storage units into a national portfolio. A $300 million placement by National Storage REIT shortly followed, which was apparently easily covered. Apple has launched its own buy now, pay later that they’re calling ‘Apple Pay Later’, which will provide loans between US$50-US$1,000 through their new subsidiary, Apple Financing. The loans will require credit checks and will be reported to relevant credit bureaus, which is a practice many buy now, pay later companies avoid at all costs. Chinese e-commerce giant Alibaba is splitting up its US$220 billion empire entire six different units that will all seek to raise capital and IPO as separate entities. The stock closed up over 14% in New York on the back of the news. First Citizens Bank, which recently celebrated its 125th year anniversary, is more than doubling the size of its balance sheet after it won an auction to take over the collapsed Silicon Valley Bank. It will take on around US$119 billion of assets and all 17 branches of the bank.  The XJO futures are slightly lower this morning down -11 points. The market closed higher yesterday hitting its highest levels in two weeks, with mining and energy stocks leading the advance on firmer commodity prices. The market has seen plenty of volatility recently, however its recent rebound higher has dropped volatility back down to IV Rank of 16.  The XJO has found strong support around the 6,946 level which has been tested multiple times. Yesterday’s move saw the market close above its 200-day moving average (7,003). We would look to see today’s close above this 200-day MA to maintain upwards momentum. If the market does continue to climb higher we expect to see resistance at the 50-day MA (7,296). On Thursday, 30th March at 1pm (AEDT) we will be joined by Vernon Wills, Director of Site Group International Ltd (ASX: SIT) which provides training courses within the resources, construction and industrial sectors, serving the likes of ExxonMobil, Woodside, Saudi Aramco, GE and Shell. Following years of disruption due to Covid and a >95% drop in its share price (February 2020 to March 2023) to a market cap low of $4 million, the Site team now sees itself on track to return to and exceed its pre-Covid revenue of $31 million. Vernon will discuss the market opportunities and pipeline behind this forecast as well as Site’s 38.4% interest in a 30 hectare leasehold in the Philippines. Click here to book your spot or request the replay. Past performance is not a reliable indicator of future performance. Reach Corporate provides Corporate Advisory Services to Site Group International Limited and may receive fees for its services.
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