In today’s briefing:
- JIC Launches a NOT-¥1trln Tender Offer for JSR (4185). Welcome? Yes. Overwhelming? Meh.
- [UPDATE] Tax-Loss Selling in Australia – Time To Unwind the Basket
- JSR Corporation (4185 JP): JIC’s Pre-Conditional Tender Offer at JPY4,350
- DDH1 To Merge With Perenti
- DDH1 (DDH AU): Binding Offer from Perenti (PRN AU)
- EDG: First Batch of Drill Results Don’t Disappoint
JIC Launches a NOT-¥1trln Tender Offer for JSR (4185). Welcome? Yes. Overwhelming? Meh.
- Japan Investment Corp (JIC) has launched a Tender Offer on top photoresist maker JSR Corp (4185 JP), at ¥4,350/share.
- That is a decent price, but it is not overwhelming. Furthermore, process for determining (and understanding) “fair” remains inadequate.
- Significant foreign ownership, a high price, Japanese equity excitement, etc, all make this a situation where we likely see a pop (the last bit), a fade, then a re-drift better.
[UPDATE] Tax-Loss Selling in Australia – Time To Unwind the Basket
- In Tax-Loss Selling in Australia – Brief Historical Analysis And A Trade Basket at the start of June I proposed a basket.
- We are getting to the end of June. Time to unwind that short basket. The named ticker was -26%. The 70-name basket underperformed ASX200 by 4.4%.
- One can now go long the basket into end-June as historically it outperforms S&P-ASX200 over two months. If one did not short, one can still go long. Basket below.
JSR Corporation (4185 JP): JIC’s Pre-Conditional Tender Offer at JPY4,350
- JSR Corp (4185 JP) has recommended JIC’s pre-conditional tender offer of JPY4,350 per share, a 34.5% and 10.6% premium to the undisturbed price and last close, respectively.
- The pre-conditions relate to various country approvals. China’s approval should be challenging due to Japan’s recent curbs on Chinese exports of chipmaking equipment.
- The offer is long-dated and opens in late December. The offer price is attractive compared to peer multiples and just a touch below the all-time share price high.
DDH1 To Merge With Perenti
- Specialty mining driller DDH1 (DDH AU) has announced a merger, by way of a Scheme, with Perenti Global (PRN AU).
- Under the proposed terms, DDH1 shareholders will receive for each DDH1 share held $0.1238 cash plus 0.7111 Perenti shares, for an implied value of A$1.01/share, or a 17.4% premium.
- Directors and shareholders with a combined 38% of DDH1 shares have indicated an intention to vote in favour of the transaction. Scheme implementation is expected in early October 2023.
DDH1 (DDH AU): Binding Offer from Perenti (PRN AU)
- DDH1 (DDH AU) has entered a SID with Perenti Global (PRN AU) at A$0.1238 cash plus 0.7111 PRN shares for each DDH share, a 17.4% premium to DDH’s 5-day VWAP.
- The key conditions are shareholder scheme approval and ACCC clearance. Shareholders representing 38.0% of outstanding shares will vote in favour of the scheme.
- The offer is attractive compared to peer multiples, and the net exchange ratio is fair on a 1-year basis. A critical risk is volatility risk around PRN shares.
EDG: First Batch of Drill Results Don’t Disappoint
- 2,100m of the 15,000m 2023 program have been completed to-date.
- This morning, Endurance Gold Corporation (EDG:TSXV) provided an update on the ongoing exploration program at its Reliance Gold Project and assay results for three drill holes completed at the Imperial and Diplomat target areas.
- Eight holes have been completed over 2,100m of the ongoing 15,000m program which commenced in May.
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