In today’s briefing:
- Acotec/Boston Scientific: Even Higher Proration
- Toyo Construction (1890 JP): Pot Shots and Warning Shots
- Yashili (1230 HK): Monthly Update Suggests that Pre-Condition Satisfaction in the Final Leg
- CSI REITs Index: An Investable Benchmark Launches Today
- PayTM (One 97 Communications) Announces a BUYBACK – Overhang Vs Feelings Vs Buyback Vs Index
- Alpha Generation Through Share Buybacks in Korea: December 2022
- Adani Enterprise US$2.4bn Raising Early Look – Lots to Think About: Controversies, Debt, Grand Plans
Acotec/Boston Scientific: Even Higher Proration
- Back on the 12 December, Acotec Scientific Holdings (6669 HK) announced a Partial Offer from Boston Scientific (BSX US)
- The Offer Price of $20/share is for up to 65% of shares out. Irrevocables total up to 60.14% of shares out, sufficient to clear the minimum tendering condition.
- My initial read was that the proration was simply 65%. That was wrong. It is higher. Plus there are some interesting quirks to avoid breaching the public float post-Offer.
Toyo Construction (1890 JP): Pot Shots and Warning Shots
- YFO’s press release alleges the Toyo Construction (1890 JP) Board will not recommend the tender as YFO is not a suitable owner rather than the JPY,1000 price being too low.
- The Board responded that YFO violated the NDA by disclosing the reasons for the Board’s disapproval. This damages the understanding between the parties, an essential precondition to recommending the offer.
- The start of the tender has been pushed back to late January 2023. YFO is committed and will not withdraw the offer for any reason that shareholders may consider unreasonable.
Yashili (1230 HK): Monthly Update Suggests that Pre-Condition Satisfaction in the Final Leg
- Yashili International Holdings (1230 HK)‘s latest monthly update suggests that the remaining pre-condition, the 25% Yashili acquisition, is entering the final stages towards being satisfied.
- The wording “in the course of processing the relevant application” suggests that the government authorities will grant the new registration certificate, which should be received shortly.
- The gross spread is 6.2%. The downside is low as both Danone SA (BN FP) and China Mengniu Dairy Co (2319 HK) can waive conditions to satisfy the pre-condition.
CSI REITs Index: An Investable Benchmark Launches Today
- The China Securities Index (CSI) will launch the CSI REITs Index today. The index currently has 14 constituents, and the REITs will be capped at 15% of the index weight.
- We expect another 6 REITs to be added to the index at the March rebalance. And then at least another 3 more in June.
- The launch of the index should result in ETFs and other passive investment products being floated which should further enhance market liquidity and bring long-term benefits to the market.
PayTM (One 97 Communications) Announces a BUYBACK – Overhang Vs Feelings Vs Buyback Vs Index
- PayTM, which IPOed 13 months ago at Rs2150/share and now trades 75% lower “intimated” the possibility of a buyback on the 8th, and shares jumped 7.2% on the 9th.
- The Board approved the INR 8.5bn buyback at max price INR 810/share late last night. The shares fell slightly today. Now we move to a postal ballot.
- The buy-back rules crate interesting parameters and these buy-back terms provide interesting opportunities.
Alpha Generation Through Share Buybacks in Korea: December 2022
- In this insight, we discuss the alpha generation through companies that have been buying back their shares in the Korean stock market in the past two months.
- In addition to these share buybacks, there has also been more recent news flow regarding the share purchases of Samsung Electronics by numerous senior directors.
- In the past month, some of the larger market cap companies including KT&G, Douzone Bizon, and Hyundai Elevator that have been buying back shares have been outperforming KOSPI.
Adani Enterprise US$2.4bn Raising Early Look – Lots to Think About: Controversies, Debt, Grand Plans
- Adani Enterprises (ADE IN) is looking to raise INR200bn (US$2.4bn) via a further public offering. The company has obtained board approval and is now awaiting shareholder approval.
- It is the flagship company of the Adani Group. The group’s listed entities’ stock performance over the past few years has made the founder one of the richest persons globally.
- However, the stock is expensive and has had some issues in the past. In this note, we take an early look at the possible placement and its impact.
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