In today’s briefing:
- Benefit One (2412): M3 Extends For a Full Month
- JIC Consortium Possibly In Line to Win Shinko At “¥800bn”, Which Makes You Go 🤔…
- Shinko Electric (6967 JP): JIC’s Pre-Conditional Tender Offer at JPY5,920
- CPMC (906 HK): SASAC Usurper?
- CPMC Holdings (906 HK): Possible Scenarios as ORG Mulls a Competing Offer
- Hollysys Gives Ascendent Capital The Nod. Agnostic Shareholders Will Approve
- HSTECH Index Rebalance Preview: Tongcheng Travel (780 HK) Could Replace GDS (9698 HK)
- Identifying KOSPI Size Migration Candidates & Assessing Proactive Setup Feasibility
- MarketVector Vietnam Local Index Rebalance: One Add & Other Changes
- The Week Ahead: US Inflation, Fed, Quarterly Rebalancing
Benefit One (2412): M3 Extends For a Full Month
- Today after the close, Benefit One Inc (2412 JP) amended its Tender Offer Target Opinion Statement to note that Dai Ichi Life had made a proposal to acquire 100%.
- To allow the Board time to evaluate this proposal, the Company requested a Tender extension. Bidder M3 Inc (2413 JP) was obliged to extend 10 days. They extended 20 days.
- This tells us a bunch of things. It is worth thinking about what happened to get here.
JIC Consortium Possibly In Line to Win Shinko At “¥800bn”, Which Makes You Go 🤔…
- A Nikkei article today suggested that Fujitsu had granted preferential negotiating rights to buy Shinko Electric Industries (6967 JP) to a JIC-led consortium (including DNP and Mitsui Chem) for ~¥800bn.
- This happened late in the afternoon session. Shares spiked 5+%, then were halted. A gray market ensued.
- A Bloomberg article provided more info, and the same info nuanced slightly differently. The wording in yet other articles was interesting enough that it is worth discussing.
Shinko Electric (6967 JP): JIC’s Pre-Conditional Tender Offer at JPY5,920
- After months of speculation, Shinko Electric Industries (6967 JP) has recommended the JIC alliance’s preconditional tender offer of JPY5,920 per share, an 18.9% premium to the undisturbed price (31 May).
- The pre-condition relates to regulatory approvals in Japan, China, Korea, and possibly Vietnam. The offeror may waive the pre-condition. The offer is long-dated and expected to start in August 2024.
- The minimum acceptance condition requires a 33.3% minority acceptance rate. Despite the low 7.1% premium to the last close, the offer resulted from a competing bidding process.
CPMC (906 HK): SASAC Usurper?
- In what I viewed as one of the cleaner deals, CPMC Holdings (906 HK) announced a pre-conditional Offer from SASAC and the National Council for Social Security Fund of China.
- A decent premium to undisturbed, a low tendering threshold, and a large shareholder giving an irrevocable – this looked done.
- Now ORG Development Limited/ORG Technology Co., Ltd. A (002701 CH), holding 24.4% of shares out, is mulling a competing conditional general cash Offer. One of these Offers will get up.
CPMC Holdings (906 HK): Possible Scenarios as ORG Mulls a Competing Offer
- CPMC Holdings (906 HK) disclosed that ORG Technology Co., Ltd. A (002701 CH), the second-largest shareholder, is considering a competing voluntary conditional general cash offer.
- It is rare to bid against an SOE bidder. ORG likely has implicit SOE support to launch a competing offer due to the need for Chinese regulatory approvals.
- The possible scenarios suggest Mr Zhang Wei is the winning bid’s kingmaker. Mr Wei sold down 260K shares at HK$6.35 on 8 December, indicating a willingness to exit.
Hollysys Gives Ascendent Capital The Nod. Agnostic Shareholders Will Approve
- Hollysys Automation Technologies (HOLI US)‘s board persistent stonewalling was effectively terminated after the its court injunction was dismissed last month. An SGM will now take place sometime next month.
- A firm merger agreement was expected this month, and Hollysys announced yesterday Ascendent Capital has emerged as the preferred suitor with a (revised) US$26.50/share Offer.
- This looks to be (finally) all stitched up. Trading wide-ish to terms. Get involved.
HSTECH Index Rebalance Preview: Tongcheng Travel (780 HK) Could Replace GDS (9698 HK)
- Tongcheng Travel Holdings (780 HK) is expected to replace GDS Holdings (9698 HK) in the Hang Seng TECH Index (HSTECH INDEX) at the March review.
- Constituent changes and capping changes will result in a one-way turnover of 2.32% and that will result in a round-trip trade of US$628m.
- Short interest on Tongcheng Travel Holdings (780 HK) is near its lows while there has been some recent short covering in GDS Holdings (9698 HK).
Identifying KOSPI Size Migration Candidates & Assessing Proactive Setup Feasibility
- EcoPro Materials and Doosan Robotics, recent IPOs, join the Large category. Their inclusion signals at least two Large stocks, CS Wind Corp and BGF Retail, shifting to Mid.
- There’s a chance three Mid-stocks will transition to Large: Ssangyong Cement, Hyundai Electric, and LOTTE Corp. Conversely, LS Corp, Hotel Shilla, and Kepco E&C will move from Large to Mid.
- With ample time left in the screening period, cautious monitoring is essential. Still, Large→Mid candidates, with a notable gap from the ₩2.95T cutoff, warrant a focus on proactive setups.
MarketVector Vietnam Local Index Rebalance: One Add & Other Changes
- CEO Group JSC (CEO VN) will be added to the MarketVector Vietnam Local Index at the close on 15 December.
- Estimated one-way turnover is 5.24% and that results in a one-way trade of US$30m. There are a couple of stocks with more than 1x ADV to buy from passives.
- The largest passive inflows will be in Vingroup Jsc (VIC VN), Vietnam Dairy Products JSC (VNM VN), CEO Group JSC (CEO VN) and Vinhomes (VHM VN).
The Week Ahead: US Inflation, Fed, Quarterly Rebalancing
- JSE indices get rebalanced in the closing auction on Thursday.
- No constituent changes will be made to the ALSI, Top 40, Top 40 SWIX, FINI, FINDI or INDI. HAR will enter the RESI and AMS will fall out.
- Largest buys: BTI, MNP, BHG, APN.
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