In today’s briefing:
- Giordano’s VGO Lapses
- Shiseido: Drunk Elephant Seems an $845m Write-Off
- Arb Carnage As Giordano’s Offer Also Fails
- Teniralc/Cary Group: Final Offer
- It Is Hoped that the Content of Shareholder Meetings Will Be Enhanced in the Future
Giordano’s VGO Lapses
- The offeror and acceptances reached 46.04%, just short of the 50% minimum acceptance condition. The offeror has decided to let the Giordano International (709 HK) offer lapse.
- The offer fell short of the 50% threshold as the Cheng family mistakenly assumed that shareholders behind Halycon’s stake were friendly shares, which would support the offer.
- The downside will be muted as the shares are trading in line with the 1-year average forward P/E, minorities thought the offer was low, and David Webb is a buyer.
Shiseido: Drunk Elephant Seems an $845m Write-Off
- Shiseido’s acquisition of Drunk Elephant for a valuation of $845m was perceived positively, hoping that Shiseido could use Drunk Elephant’s digital marketing expertise to restructure its North America business.
- Rather than emulating Drunk Elephant like digital marketing to the company’s other brands, Shiseido has been trying to accommodate all its brands including Drunk Elephant into a hybrid marketing strategy.
- This seems to have killed Drunk Elephant’s appeal to its customers. Thus, Shiseido Company (4911 JP) could be facing a massive $845m write-off over the next few years.
Arb Carnage As Giordano’s Offer Also Fails
- Utter carnage in arb-world this week, as Frasers Hospitality Trust (FHT SP) fails, Link Administration (LNK AU) and Ramsay Health (RHC AU) are potentially next, and now Giordano (709 HK).
- 46.04%. That’s the only number that matters, which represents the total shares owned by the Cheng family plus shares tendered.
- The Chengs are restricted from launching another Offer for 12 months. Giordano will be sold off today, however, this is a buy if it retraces to around the undisturbed levels.
Teniralc/Cary Group: Final Offer
- In light of low acceptances and a cold statement from the independent bid committee, Teniralc increased the offer by 7.7% to SEK 70/share (same as IPO, 17.2x EV/EBITDA).
- The increased offer is final, represents a 72% premium and has been unanimously recommended. The acceptance period now runs until 22 September.
- As of 12 September closing share price, gross spread is 4.2%, an interesting level, in my view, considering settlement will take place “on or about 30 September”. Reiterate Long CARY SS.
It Is Hoped that the Content of Shareholder Meetings Will Be Enhanced in the Future
- The inclusion of the requirement to use e-voting platforms in the Corporate Governance Code has led to increasing number of companies using e-voting platforms.
- The number of participating companies has increased from 1,540 in March to 1,737 in August. Of the companies participating in e-voting platform, 92% are listed companies in the prime market.
- It is only to be hoped that in the future, companies will focus on improving communication between shareholders and management at general shareholders’ meetings.
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