In today’s briefing:
- AAG Energy (2686 HK): Curiouser and Curiouser
- MVIS Global Rare Earth/Strategic Metals Index Rebalance Preview: Identifying Potential Changes
- FXI Rebalance Preview: Three Potential Changes in June
- Hailan Holdings (2278 HK): Voluntary Conditional Offer with a Skinny Premium
- Quiddity Leaderboard ASX Jun 23: Two ASX 200 Changes Likely, Including Ventia Surprise
- Will Woori Financial Group Acquire Samsung Securities?
- Aeon Will Own Japan’s Two Largest Supermarket Groups with Inageya Purchase
- Sweetened Offer and Bain Interloping
- Global Health (Medanta) Lockup – Good Name but Seems Fairly Valued
AAG Energy (2686 HK): Curiouser and Curiouser
- AAG Energy Holdings (2686 HK) is one of those periodic (and rare) takeover situations that will likely be remembered for what went wrong rather than what went right.
- A low-balled Offer (proxy advisors agree); perfunctory IFA analysis; a large, and silent, shareholder; and the postponement of the Scheme vote due to voting instructions not being “duly processed”.
- A new Court Meeting has been confirmed for the 2 June. And now we have some odd CCASS movements which raise further questions.
MVIS Global Rare Earth/Strategic Metals Index Rebalance Preview: Identifying Potential Changes
- The review period for the June rebalance ends on 31 May. Announcement of the changes will be made on 9 June with implementation at the close on 16 June.
- There could be 4 or 5 A-share additions due to their inclusion in Northbound Stock Connect. That in turn expands the universe and could result in up to 3 deletions.
- If all changes go through as expected, estimated one-way turnover at the rebalance will be 15.1% resulting in a one-way trade of US$99m.
FXI Rebalance Preview: Three Potential Changes in June
- As of 8 May, we see three potential changes to the iShares China Large-Cap (FXI) (FXI US) at the June rebalance. This is mainly driven by the inclusions.
- There is over 1 day of ADV to trade on all stocks with the largest impact on BeiGene Ltd (6160 HK) at nearly 4 days of ADV.
- Short interest has been increasing on the potential adds as they have run up a lot in the last few months.
Hailan Holdings (2278 HK): Voluntary Conditional Offer with a Skinny Premium
- Hailan Holdings (2278 HK) disclosed a voluntary conditional offer from its controlling shareholder at HK$3.36 per share, a 5.0% premium to the undisturbed price.
- The offer is conditional on a 90% minimum acceptance condition which requires a minority acceptance rate of 60.0%. The offeror/concert parties own 75.0% of shares.
- The offeror aims to exercise compulsory acquisition rights (requires 90% minority acceptance rate) which suggests a bump is possible. The offer price has not been declared final.
Quiddity Leaderboard ASX Jun 23: Two ASX 200 Changes Likely, Including Ventia Surprise
- In this insight, we take a look at the potential index changes for ASX 200, 100, 50, and 20 in the run up to the June 2023 Rebalance.
- Ventia (VNT AU) has appeared as a “surprise” potential addition to the ASX 200 index in June 2023 after recent block sales by top shareholders.
- Including Ventia, we currently expect two ADDs and two DELs for the ASX 200 index in June 2023.
Will Woori Financial Group Acquire Samsung Securities?
- The new head of Woori Financial Group (316140 KS) Chairman Lim Jong-Ryong recently revealed his willingness to acquire a major/mid-scale securities company.
- Among these potential acquisition candidates, Samsung Securities is considered to be the most likely securities companies that could be purchased by Woori Financial Group.
- In the long term (next 2-3 years), there is a good probability that Woori Financial Group could acquire Samsung Securities, which is not a core business of the Samsung Group.
Aeon Will Own Japan’s Two Largest Supermarket Groups with Inageya Purchase
- Last year saw the consolidation of several supermarket chains in Shikoku and Chugoku by Aeon, creating Japan’s largest supermarket group.
- Now, Aeon has now announced that it will expand its existing stake in Inageya, rolling the company into USMH and creating another, even larger food operation and Japan’s biggest yet.
- Aeon is looking for dominance in Tokyo and may seek more acquisitions but rivals are unlikely to give it a free hand nor say no to acquisitions of their own.
Sweetened Offer and Bain Interloping
- Bain has a 10.01% stake (likely acquired <€32/share) and could play nasty: its stake is enough to block a squeeze-out, and if it launches a €34/share offer, it will be hostile.
- Meanwhile, Silver Lake (5% recently acquired+25.1% from the foundation) has sweetened to €32/share (19.4x EV/Fwd EBIT, well above 11.1x last-10y average). The Board could change sides (as recently with Caverion).
- The shares trade 3.5% above Silver Lake’s, but at a discount of 2.5% to Bain’s possible offer. The market believes Bain will bid. I raise my TP to €32.
Global Health (Medanta) Lockup – Good Name but Seems Fairly Valued
- Global Health (Medanta) (MEDANTA IN) raised around US$268m in its India IPO. The stock was listed on 16th Nov 2022, its six-month lockup will expire on 11th May 2023.
- Global Health (GH) is a hospital network that operates under the Medanta brand. The firm currently has five hospitals in operation and one more planned for development.
- In this note, we will talk about the lock-up dynamics and updates since our last note.
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