In today’s briefing:
- Allkem/Livent Merger Vote Tomorrow: Will Vote Get Past?
- Link Admin (LNK AU): Mitsubishi UFJ’s Bittersweet Scheme
- LG Display: Announces a Rights Offering Capital Raise of 1.36 Trillion Won
- Link Admin (LNK AU): MUFG’s Underwhelming Binding Offer
- Adbri (ABC AU): CRH and Barro’s Non-Binding A$3.20 Offer
- Pacific Smiles (PSQ AU) Frowns On Genesis’ Offer
- Comprehensive List: 359 Companies on KOSPI & KOSDAQ Deferring Yearend Dividend Record Dates
- EQD | NIFTY WEEKLY Pullback: Where to Re-Enter LONG?
- Taihan Electric Wire: Rights Offering of 50% of Outstanding Shares
Allkem/Livent Merger Vote Tomorrow: Will Vote Get Past?
- The vote is tomorrow. It is slightly contested. Shareholder proxies have recommended approving. Some others say Allkem is going too cheap.
- It probably should get done because of scale benefits, and if it breaks, it might be good for Allkem, which is “good risk arb risk”
- But the trade here is some combination of lithium rebound and index event, with index impact details here.
Link Admin (LNK AU): Mitsubishi UFJ’s Bittersweet Scheme
- Link Administration (LNK AU), the largest provider of services in Australia’s superannuation administration industry, has entered into a Scheme with Mitsubishi UFJ Financial Group.
- MUFJ is offering long-suffering Link shareholders A$2.10/share (in cash) plus a A$0.16/share dividend (25% franked), or a 32.9% premium, all-in, to the undisturbed price. It has not been declared final.
- The Offer has the board’s backing. A Scheme Meeting is expected to be held in May with possible completion in June 2024.
LG Display: Announces a Rights Offering Capital Raise of 1.36 Trillion Won
- LG Display announced today that it will conduct a rights offering capital raise worth 1.36 trillion won.
- The rights offering capital raise involves 142 million shares, which represent 39.7% of its existing outstanding shares.
- We believe this rights offering will have a negative impact on LG Display’s share price as it will significantly dilute existing shareholders.
Link Admin (LNK AU): MUFG’s Underwhelming Binding Offer
- Link Administration (LNK AU) has entered a SID with Mitsubishi UFJ Financial (MUFG) (8306 JP) at A$2.26 (A$2.10 scheme consideration + A$0.16 dividend), a 32.9% premium to the undisturbed price.
- The presence of several substantial shareholders, lack of irrevocables, a light offer, recent derisking of the business and a long-dated offer pose a challenge for the scheme to get up.
- MUFG’s offer could spark a rival offer, but Link’s long-suffering shareholders have endured a history of failed bids. At the last close, the risk/reward is unfavourable.
Adbri (ABC AU): CRH and Barro’s Non-Binding A$3.20 Offer
- Adbri (ABC AU) has disclosed a non-binding proposal from CRH (CRH LN) and Barro at A$3.20 per share, a 41.0% premium to the undisturbed price of A$2.27 (13 December).
- The offer is the best and final offer. The Board has granted an exclusive due diligence period, which ends on 28 February 2024.
- The Board intends to recommend a binding proposal. The offer requires FIRB approval (ACCC approval is not mentioned). The offer is attractive vs. peer multiples and historical ranges.
Pacific Smiles (PSQ AU) Frowns On Genesis’ Offer
- Pacific Smiles (PSQ AU), an operator of dental centers, has announced – and immediately rejected – a non-binding proposal from Genesis Capital Manager.
- Genesis, holder of 18.75% of shares out, has offered A$1.40/share, by way of a Scheme. That’s a less-than-inspiring 17.1% premium to last close.
- PSQ calls the Offer “opportunistically timed”. That has merit, after the share price recently touched a multi-year low. Separately, PSQ is seeking a new CEO after Mckenzie resigned in August.
Comprehensive List: 359 Companies on KOSPI & KOSDAQ Deferring Yearend Dividend Record Dates
- The data is crucial for year-end dividend arbitrage. We can strategically target Single-stock futures’ spread basis widening due to information timeliness disparities, focusing on companies with high dividend yields.
- Furthermore, it offers valuable insights into assessing the December-March spread levels, potentially leading to a rollover distortion in KOSPI 200 futures’ calendar spread trading.
- Postponed yearend dividend record dates to March may clash with first-quarter dividends, offering a new trading opportunity. this unique situation could significantly impact spot and futures prices.
EQD | NIFTY WEEKLY Pullback: Where to Re-Enter LONG?
- 7 weeks up in a row and very overbought, the NIFTY Index could pullback from its highs this week and/or the next.
- A pullback to the 21008-20542 support area could be an occasion to enter LONG, profitable if the index rebounds from there and continues to rally into January.
- The potential pullback appears to be a short-lived retracement down, based on MRM pattern readings.
Taihan Electric Wire: Rights Offering of 50% of Outstanding Shares
- Last week, Taihan Electric Wire announced a rights offering of 50% of its outstanding shares. The company is expected to raise 526 billion won.
- Taihan Electric Wire is expected to use the rights offering proceeds to mostly expand its submarine cable production.
- With the share price falling 21% since the announcement of the rights offering last week, Taihan Electric Wire looks more attractive.
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