In today’s briefing:
- Uniti Group (UWL): New Bidder in the Fray?
- Kadokawa – 12m Unit Sales and the Prospect of Live Service
- JD.com Tencent Distribution – Updates on the Now US$15bn Overhang and the Prosus Angle
- WISE Tour Leisure (TIGER ETF) Rebalancing Preview
- Ruchi Soya Placement – Almost Akin to a Relisting
- Ferretti IPO: Things Have Gotten Worse Since Previous Attempt to List in Milan
- A Merger Between Lotte Confectionery and Lotte Food: An Alpha Generating Event
Uniti Group (UWL): New Bidder in the Fray?
- A week ago, HRL Morrison made a non-binding, preliminary and highly conditional offer for Uniti Group Ltd (UWL AU) at A$4.5/share in cash, subject to due diligence and other conditions.
- Uniti Group Ltd (UWL AU) traded up 10.7% today to A$4.67/share on high volumes and trading was halted an hour before market close.
- News reports indicate that Macquarie Asset Management and PSP Investments are likely to make an offer at A$5/share. Expect an announcement in the next 24 hours.
Kadokawa – 12m Unit Sales and the Prospect of Live Service
- As widely expected From Software’s Elden Ring title has proved a smash success selling 12m units within its first 17 days.
- That puts the game in rare territory and establishes the Kadokawa subsidiary as one of the premier global developers.
- There is also some potential for live services here which could add to the appeal for Sony.
JD.com Tencent Distribution – Updates on the Now US$15bn Overhang and the Prosus Angle
- On 23rd Dec 2021, Tencent declared a special interim dividend in the form of a distribution in specie of 457.326m Class A ordinary shares of JD.com.
- While Tencent went ex-div on 20th Jan 2022, the actual settlement of the distribution is expected to happen on or about 25th Mar 2022.
- In this note, we talk about the updates since our last note and have a closer look at Prosus and its possible motivation/intention with its JD.com stake.
WISE Tour Leisure (TIGER ETF) Rebalancing Preview
- WISE Tour is another fast-growing theme index in Korea with an AUM of ₩0.23T. The next rebalancing will be on April 15. So, the rebalancing trading is on April 14.
- Although the flow size of this ETF rebalancing is not substantial, it seems clear that the flow/price (direction) correlation is at a level we should pay attention to.
- Those expected to receive a meaningful flow impact at this point are: (LONG) Hana Tour, GKL, & Yong Pyong Resort / (SHORT) Hanjin KAL, Ananti, & SK Rent A Car
Ruchi Soya Placement – Almost Akin to a Relisting
- Ruchi Soya Industries (RSI IN) is looking to raise up to US$560m via a follow-on public offer.
- The deal is almost akin to a relisting, as the free float was just at 1% prior to this deal.
- Given the tight float, instead of discussing its track record , we will discuss the timeline of events leading up to the deal, past performance and undertake a peer comparison/valuation.
Ferretti IPO: Things Have Gotten Worse Since Previous Attempt to List in Milan
- The Italian luxury yacht maker, Ferretti SpA (FER IM) , has filed for an IPO on the Hong Kong Stock Exchange and plans to raise net proceeds of around US$272m.
- The company previously filed for an IPO in Milan in 2019 targeting a market value of around EUR1.8bn (US$1.2bn), which was scrapped claiming a “weak market”.
- Ferretti’s revenues suffered with COVID-19 and ongoing issues such as the Ukraine-Russia war and China-US trade tensions would only put further pressure on the company.
A Merger Between Lotte Confectionery and Lotte Food: An Alpha Generating Event
- On 23 March, it was announced that Lotte Confectionery (280360 KS) (market cap of 744 billion won) will merge with Lotte Food (002270 KS) (market cap of 395 billion won).
- We believe this merger will have a positive impact on the shares of Lotte Confectionery and Lotte Food.
- Lotte Confectionery and Lotte Food are not currently included in the KOSPI200. There will be a growing likelihood that the combined entity could be included in the KOSPI200 index.
Before it’s here, it’s on Smartkarma
