In today’s briefing:
- Blackstone Does a BIG Deal for Infocom (4348) – Minorities Get ¥6,060/Share
- [JAPAN ACTIVISM] – Murakami Group Goes Activisting on Exedy (7278) – Room To Run
- Pref-Centred Dividend Plays with Expanded ISA Tax Benefits in Value-Up Context
- L’Occitane (973 HK): No, PLP Is Not Getting A Back-End Bump
- KOSDAQ150 Adhoc Index Rebalance: Eco&Dream to Replace Paradise Co
- Infocom (4348 JP): Blackstone’s Long-Awaited JPY6,060 Tender Offer
- LS Materials: A Sharp Increase in Short Selling Post Block Deal Sale
- KDDI and Lawson: Loyalty Points Just the Start
- Quiddity SET 50 Jun 24 Rebal: 4 Changes Confirmed; LONGs up 5.2% Vs SHORTs in a Month
- JSE June ’24 Rebalance: Top Buys (Banks!) And Sells (NPN, PRX)
Blackstone Does a BIG Deal for Infocom (4348) – Minorities Get ¥6,060/Share
- 15 weeks ago, a specialised media outlet suggested Teijin Ltd (3401 JP) was in process to sell its stake in Infocom Corp (4348 JP).
- I caught up later, after the stock had run up significantly, but writing bullishly here and here. Since then, the stock is up another 33-35%.
- Today we finally got the announced deal. Blackstone will buy the stock at a valuation of ¥280bn, paying ¥6,060/share for the minority stake, and buying back Teijin’s stake at ¥4,340/share.
[JAPAN ACTIVISM] – Murakami Group Goes Activisting on Exedy (7278) – Room To Run
- Late May, Aisin (7259 JP) announced a sell-down of its 34% stake in Exedy Corp (7278 JP) – a big non-dilutive offering, pricing 11% below undisturbed. Exedy announced a buyback.
- Announced on the 27th of May, shares fell sharply the next day, it priced on the 3rd, and offering shares traded on the 10th. Then the price started climbing back.
- My first and second pieces argued that buyback accretion, index impact, and change in register shape all meant it was a buy. Activist Murakami agreed, now he has 6.5%.
Pref-Centred Dividend Plays with Expanded ISA Tax Benefits in Value-Up Context
- Local stock market focuses on ISA tax benefits expansion; political push for higher tax-exempt limits seen as pivotal event.
- Investors expect dividend stocks to outperform due to ISA tax advantages: tax exemptions within limits and lower 9.9% taxation on excess amounts, boosting ISA-based equity investments.
- ETF influence declining; ISA tax benefits may boost dividend plays, heightening interest in preferred stocks tied to efforts to redeem them, impacting equity costs.
L’Occitane (973 HK): No, PLP Is Not Getting A Back-End Bump
- In a long-awaited development, L’Occitane (973 HK) announced during the lunchbreak yesterday, a scrip alternative. Plus Pleasant Lake Partners (PLP) (3.25%) will accept the Offer (either in cash or scrip).
- This was positive news. And the market reacted accordingly, up ~1.0% in the afternoon session.
- One quirk in the doc was the perception those electing the scrip alternative may get a higher % in the unlisted Offeror. A back-end bump for PLP? (Hint: No).
KOSDAQ150 Adhoc Index Rebalance: Eco&Dream to Replace Paradise Co
- Paradise Co Ltd (034230 KS) will move from the KOSDAQ Market to the KOSPI Market from the open of trading on 24 June.
- E&D Co Ltd (101360 KS) will be added to the KOSDAQ 150 Index (KOSDQ150 INDEX) at the close on 21 June to replace Paradise Co Ltd (034230 KS).
- Paradise Co Ltd (034230 KS) belongs to the Consumer Discretionary sector and there is a possibility of inclusion to the Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) in December.
Infocom (4348 JP): Blackstone’s Long-Awaited JPY6,060 Tender Offer
- Following months of press speculation, Infocom Corp (4348 JP) announced a Blackstone (BX US) tender offer at JPY6,060 per share, a 177.3% premium to the undisturbed price.
- After the share consolidation, Infocom will repurchase Teijin Ltd (3401 JP)’s stake at a share repurchase price of JPY4,231. The process is expected to be completed in early October.
- The offer is a knockout bid helped by auction. This is a done deal with payment commencing from 7 August. At the last close, the gross spread was 0.5%.
LS Materials: A Sharp Increase in Short Selling Post Block Deal Sale
- On 14 June, KeiStone Partners sold 2.51 million shares (3.7% of outstanding shares) of LS Materials at the block deal sales price of 26,350 won per share.
- In the next several weeks/months, there will likely be increased concerns about additional selling of LS Materials by KeiStone Partners.
- Due to recent block deal sale, higher short selling volume, and concerns about additional selling by Keistone Partners, LS Materials shares could face further weakness in the next 6-12 months.
KDDI and Lawson: Loyalty Points Just the Start
- KDDI will complete its acquisition of a 50% share in Lawson this month and the chain will then delist.
- KDDI is promising a rapid introduction of services and fresh ideas to leverage its new retail arm.
- It will begin by unifying premium loyalty point membership under the Ponta brand and offer new services that it hopes will help boost share. What out LY.
Quiddity SET 50 Jun 24 Rebal: 4 Changes Confirmed; LONGs up 5.2% Vs SHORTs in a Month
- The June 2024 index changes for Thailand’s SET 50 index were announced after market close yesterday (17th June 2024).
- Initially we expected only three changes but after the index methodology was revised in May 2024, we revised our expectations and we had 4 expected ADDs/DELs.
- All 4 expected ADDs/DELs turned out to correct. In this insight, we take a look at our estimation of expected flows and potential trade ideas based on the flow dynamics.
JSE June ’24 Rebalance: Top Buys (Banks!) And Sells (NPN, PRX)
- On Friday, JSE indices will be rebalanced in the closing auction.
- There will be no constituent changes to the Top 40, FINI, FINDI, INDI or RESI indices (ALSI gets reviewed in March and September).
- The upcoming rebalance will be the first review since the vanilla and SWIX indices were merged in March
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