European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>On 18 April, a White House official said that any review of the deal between <a href="https://www.smartkarma.com/entities/nippon-steel-corporation" target="_blank" data-smartkarma-citation="entities:961:1" rel="noopener">Nippon Steel Corporation (5401 JP)</a> and <a href="https://www.smartkarma.com/entities/united-states-steel-corp" target="_blank" data-smartkarma-citation="entities:202:1" rel="noopener">United States Steel (X US)</a> by CFIUS will continue as scheduled.</li>
<li>X shares trade at ~5.2x on NTM IBES-consensus EBITDA given priced-in deal risk vs. implied 7x at the time of the winning NSC's bid, and look attractive relative to comparables.</li>
<li>There remains a possibility that Nippon could finalize the takeover after the U.S. presidential election, presenting potential upside.</li>
</ul>


On 18 April, a White House official said that any review of the deal between Nippon Steel Corporation (5401 JP) and United States Steel (X US) by CFIUS will continue as scheduled.
X shares trade at ~5.2x on NTM IBES-consensus EBITDA given priced-in deal risk vs. implied 7x at the time of the winning NSC's bid, and look attractive relative to comparables.
There remains a possibility that Nippon could finalize the takeover after the U.S. presidential election, presenting potential upside.


Nippon Steel/United States Steel Corp: Valuation

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>Stay long <a href="https://www.smartkarma.com/entities/benefit-one-inc" target="_blank" data-smartkarma-citation="entities:14502:1" rel="noopener">Benefit One (2412 JP)</a>. Dai-Ichi Life can pay more, if pushed on pricing. May not be huge, but it could be a few percent or even 10%. </li>
<li>
<a href="https://www.smartkarma.com/entities/hankook-company-co-ltd" target="_blank" data-smartkarma-citation="entities:19369:1" rel="noopener">Hankook &amp; Company (000240 KS)</a>'s family feud goes public. The public tender looks set to fail. Coal in stockings all-round.</li>
<li>If you had any <a href="https://www.smartkarma.com/entities/toyo-construction-co-ltd" target="_blank" data-smartkarma-citation="entities:1176:1" rel="noopener">Toyo Construction (1890 JP)</a> left over from the rally up to ¥1,300+, get out. There may be a better opportunity later, but not here.</li>
</ul>


Stay long Benefit One (2412 JP). Dai-Ichi Life can pay more, if pushed on pricing. May not be huge, but it could be a few percent or even 10%. 

Hankook &amp; Company (000240 KS)'s family feud goes public. The public tender looks set to fail. Coal in stockings all-round.
If you had any Toyo Construction (1890 JP) left over from the rally up to ¥1,300+, get out. There may be a better opportunity later, but not here.


Last Week in Event SPACE: Benefit One, Hankook, Toyo Construction, Hanwha, Tsuruha, Livent/Allkem

<ul>
<li>
<a href="https://www.smartkarma.com/entities/nippon-steel-corporation" target="_blank" data-smartkarma-citation="entities:961:1" rel="noopener">Nippon Steel Corporation (5401 JP)</a> and <a href="https://www.smartkarma.com/entities/united-states-steel-corp" target="_blank" data-smartkarma-citation="entities:202:1" rel="noopener">United States Steel (X US)</a> have agreed an all-cash $55.00/share offer, 142% premium to where X traded before Cliff's approach, a very generous 7x EV/24e EBITDA.</li>
<li>A determined buyer seeks market share in the lucrative US market, with no meaningful synergies expected and willingness to keep all US Steel jobs and (greener) growth projects.</li>
<li>Although unions and some lawmakers are voicing concerns, CFIUS shouldn't pose a big hurdle. Spread is 12.04%/17.93% (gross/annualised, assuming late settlement by end of Q3 2024). Long.
</li>
</ul>



Nippon Steel Corporation (5401 JP) and United States Steel (X US) have agreed an all-cash $55.00/share offer, 142% premium to where X traded before Cliff's approach, a very generous 7x EV/24e EBITDA.
A determined buyer seeks market share in the lucrative US market, with no meaningful synergies expected and willingness to keep all US Steel jobs and (greener) growth projects.
Although unions and some lawmakers are voicing concerns, CFIUS shouldn't pose a big hurdle. Spread is 12.04%/17.93% (gross/annualised, assuming late settlement by end of Q3 2024). Long.



Nippon Steel/United States Steel Corp: Knock-Out Offer

Japan Specialist

Mark Chadwick

Thematic (Sector/Industry)

<ul>
<li>
Overseas: SPX +0.5%, M&amp;A action drives market higher. Fed talks down interest rate cuts.</li>
<li>
Today: NKY Futs -0.1% v cash. JPY 142.9; Japan’s FSA wants to overhaul tender offer rules; Mit Elec to step up cross-share unwind</li>
<li>
Japan: Nippon Steel's $15bn acquisition of U.S. Steel is a bold move; it secures a top-three global position &amp; substantial share in the EV e-steel market.</li>
</ul>



Overseas: SPX +0.5%, M&amp;A action drives market higher. Fed talks down interest rate cuts.

Today: NKY Futs -0.1% v cash. JPY 142.9; Japan’s FSA wants to overhaul tender offer rules; Mit Elec to step up cross-share unwind

Japan: Nippon Steel's $15bn acquisition of U.S. Steel is a bold move; it secures a top-three global position &amp; substantial share in the EV e-steel market.


Ohayo Japan | Nippon Steel Forges Ahead with Deal for U.S. Steel

Quantitative Researcher, MRM Research

Nico Rosti

Quantitative Researcher

MRM Research

Quantitative Research

<ul>
<li>The <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">Nikkei 225 INDEX</a> is getting WEEKLY OVERBOUGHT after just +1 week up. Rallying further during the next 2-3 weeks may be hard, it could stall or fall.</li>
<li>If the index rallies further this week, it could fall the following week. Alternatively it could stall this week and rally the following week/s, but OVERBOUGHT status won't go away.</li>
<li>34256 is the Q3 resistance target on CC=+3, this should be a hard barrier to breach. An earlier barrier is Q3 resistance on the Gen.Pattern Boxplot = 33835.</li>
</ul>


The Nikkei 225 INDEX is getting WEEKLY OVERBOUGHT after just +1 week up. Rallying further during the next 2-3 weeks may be hard, it could stall or fall.
If the index rallies further this week, it could fall the following week. Alternatively it could stall this week and rally the following week/s, but OVERBOUGHT status won't go away.
34256 is the Q3 resistance target on CC=+3, this should be a hard barrier to breach. An earlier barrier is Q3 resistance on the Gen.Pattern Boxplot = 33835.


EQD | Nikkei 225 (NKY) Enters WEEKLY OVERBOUGHT Resistance Area

Japan

Nippon Steel Corp is an integrated steel maker. The Company produces various types of steel products used for industrial machinery & equipment and exports them worldwide.  Nippon Steel provides plant construction and urban development and also develops new businesses such as chemicals, ceramics, electronic equipment and information & communication systems.

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Nippon Steel Corporation (5401 JP)

Nippon Steel/United States Steel Corp: Valuation

White House official confirms CFIUS review of Nippon Steel's deal with US Steel will proceed as planned, X shares trade attractively with...

Jesus Rodriguez Aguilar

Last Week in Event SPACE: Benefit One, Hankook, Toyo Construction, Hanwha, Tsuruha, Livent/Allkem

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Nippon Steel/United States Steel Corp: Knock-Out Offer

This is a very appealing special situation: a motivated buyer, with its cards on the table, financing set aside, support from target and...

Jesus Rodriguez Aguilar

Ohayo Japan | Nippon Steel Forges Ahead with Deal for U.S. Steel

M&A activity boosts market, Fed tones down expectations for interest rate cuts. Japan's Nippon Steel to acquire U.S. Steel for $15bn

Mark Chadwick

EQD | Nikkei 225 (NKY) Enters WEEKLY OVERBOUGHT Resistance Area

The Nikkei 225 Index is WEEKLY OVERBOUGHT after its 1-week up rally (CC=+1), additional gains in the next 2-3 weeks will be hampered down by...

Nico Rosti

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Nippon Steel/United States Steel Corp: Valuation

​White House official confirms CFIUS review of Nippon Steel's deal with US Steel will proceed as planned, X shares trade attractively with...

Jesus Rodriguez Aguilar

Last Week in Event SPACE: Benefit One, Hankook, Toyo Construction, Hanwha, Tsuruha, Livent/Allkem

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Nippon Steel/United States Steel Corp: Knock-Out Offer

This is a very appealing special situation: a motivated buyer, with its cards on the table, financing set aside, support from target and...

Jesus Rodriguez Aguilar

Ohayo Japan | Nippon Steel Forges Ahead with Deal for U.S. Steel

​M&A activity boosts market, Fed tones down expectations for interest rate cuts. Japan's Nippon Steel to acquire U.S. Steel for $15bn

Mark Chadwick

EQD | Nikkei 225 (NKY) Enters WEEKLY OVERBOUGHT Resistance Area

​The Nikkei 225 Index is WEEKLY OVERBOUGHT after its 1-week up rally (CC=+1), additional gains in the next 2-3 weeks will be hampered down by...

Nico Rosti

White House official confirms CFIUS review of Nippon Steel's deal with US Steel will proceed as planned, X shares trade attractively with...

M&A activity boosts market, Fed tones down expectations for interest rate cuts. Japan's Nippon Steel to acquire U.S. Steel for $15bn

The Nikkei 225 Index is WEEKLY OVERBOUGHT after its 1-week up rally (CC=+1), additional gains in the next 2-3 weeks will be hampered down by...