Trading Places: Twiggy likes his Vegemite THICC, and Fenix gets a new most-substantial holder

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  • Twiggy a happy little Vegemite as he ups his stake in Bega Cheese
  • Entrepreneur Craig Mitchell becomes substantial shareholder in Fenix Resources after it buys other half of his company
  • UBS sells out of Link Administration days before it agrees to takeover from Canadian company Dye & Durham

Trading Places is Stockhead’s semi-regular, pretty damn fascinating recap of the latest red flag buying and selling of ASX small and mid-cap shares. It is here that the rubber really hits the road for fund managers, stakeholders, distant (and not-so-distant) relatives and other famous or infamous investors.

Specifically, Trading Places tracks substantial shareholder movements – namely when a trade in a company’s stock crosses or falls below the 5% threshold.

Substantial shareholders are usually directors, individual investors, institutional investors… or their distant (and not-so-distant) relatives, which they will refer to as listed related bodies corporate or something similar. You can see in detail these listed bodies on the company’s ASX announcement.

Shareholders are required by basic human decency (and the law) to publicly declare via the exchange when their personal stake goes below or above 5%, and from there, every movement in their holdings while owning above 5%.

The becoming and ceasing to be substantial shareholders are the ones we think are worth noting, where a trade takes an investor over the 5% threshold or has them drop back below.

Here’s the form to get you started, if reading this makes you twitchy.
 

Market overview

As July comes to an end the markets have been treading water. While the S&P ASX 200 has fallen more than 10% in the year to date and is officially in correction mode, it is modestly up 1.58% in the past month.

But it doesn’t seem to take much to spook investors this year, with the ASX following the lead of international markets. Inflation, rising interest rates, ongoing Covid-19 waves and geopolitical events continue to have an impact.

Aussie inflation is set to hit a 32-year high when the ABS releases its latest Consumer Price Index (CPI) data today.

Whether to capitalise on low prices, stem further losses or move to stocks forecast to better ride out the volatility storm, there have been some large buys and sells on the ASX across sectors in the past fortnight.
 

Buyers

Code Company Market Cap Date of change Holder Stake
BGA Bega Cheese $1.05B 20/7/2022 Tattarang AgriFood Investments Pty Ltd, Forrest & Forrest Pty Ltd and John Andrew Henry Forrest AF Increase from 10% to 11.50%
WEB Webjet $1.91B 20/7/2022 State Street Corporation and subsidiaries named 5%
BBN Baby Bunting Group $627.19M 22/7/2022 Commonwealth Bank of Australia and its related bodies corporate 5%
EHE Estia Health $498.09M 20/7/2022 Copia Investment Partners 5.24%
FNX Fenix Resources $148.54M 22/7/2022 Craig Douglas Mitchell 5.91%
MP1 Megaport $1.34B 21/7/2022 State Street Corporation and subsidiaries named 5.29%
LYC Lynas Rare Earths $7.72B 20/7/2022 Challenger Limited and its entities listed 5.01%
STA Strandline Resources $477.47M 14/7/2022 Regal Funds Management Pty Ltd 5.17%
NUH Nuheara $30.58M 14/7/2022 Realtek Semiconductor Corporation 11.85%

WA mining magnate Andrew Forrest’s companies continued to lift their stake in Vegemite owner Bega Cheese (ASX:BGA).

Ponying up for around an extra 4.55 million shares in Bega, the companies, including Tattarang AgriFood Investments, now hold an 11.50% stake in Bega.

Bega has seen its share price fall ~12% in the past month and ~38% year to date to $3.65 with the effects of flooding on the east coast, rising farm-gate milk gate prices, and transport costs.

In our last Trading Places article we reported that fund manager Perpetual had sold out its stake in Bega.

Mid West junior Fenix Resources (ASX:FEX) has a new substantial shareholder after it completed a deal to buy the other 50% of the Fenix-Newhaul joint venture from WA entrepreneur Craig Mitchell on July 22.

Upon completion of the deal Mitchell has become a substantial holder with a 5.91% stake and will join the board as a non-executive director on September 1.

According to an ASX release on June 21, Mitchell is expected to become Fenix’s largest shareholder.
 

Sells

Code Company Market Cap Date of change Holder
LNK Link Administration Holdings $2.27B 15/7/2022 UBS Group AG and its related bodies corporate
LER Leaf Resources $27.60M 20/7/2022 Kenneth Richards
EML EML Payments $346.87M 14/7/2022 State Street Corporation and subsidiaries named
OZL OZ Minerals $5.76B 15/7/2022 Ausbil Investment Management
WEB Webjet $1.91B 19/7/2022 L1 Capital Pty Ltd
EGG Enero Group 263.75M 22/7/2022 UBS Group AG and its related bodies corporate
MZZ Matador Mining $27.19M 20/7/2022 CI Investments Inc as manager of nvestment funds listed
BOE Boss Energy $708.68M 22/7/2022 First Sentier Investors Holdings & related bodies corporate
VSL Vulcan Steel $1.14B 22/7/2022 Regal Funds Management Pty Ltd and its associates

UBS has sold out of Link Administration (ASX:LNK) just days before the company announced it had agreed to Canadian cloud software company Dye & Durham’s increased takeover offer.

Dye & Durham increased its takeover offer from $4.57 to $4.81/share for Link, which while lower than the original base scheme consideration of $5.50/share, is higher than its recently revised offers of $4.30 and $4.57 per share.

In addition, Link shareholders remain entitled to receive net consideration of up to 13 cents/share from the sale of the Banking and Credit management (BCM) business.

Leaf Resources (ASX:LER) chairman Ken Richards ceased to be a shareholder in the company on July 20. Richards retired as managing director of Leaf Richards in 2019 after nine years.

According to its website Leaf’s technologies enable replacement of petroleum-based chemicals and it has developed a world-first environmentally friendly and scalable process for extracting clean and natural pine chemicals.

The company’s share price has dropped more than 34% in the past five days to 2.1 cents.

 

Disclosure: The author held shares in Link Administration (ASX:LNK) at the time of writing this article.

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