In today’s briefing:
- Boss Maki Goes Hard on Base (4477) – Interesting Situation
- Idemitsu (5019) – Buyback Announced, Executed, To Be Executed Again; Pressure & Timing
- Quiddity Leaderboard ChiNext & ChiNext 50 Jun25: US$1.4bn Total One-Way Flows; Basket Trade Idea
- Dropsuite (DSE AU): Topline Selling Is A Buying Opportunity
- ENN Energy (2688 HK): Third Party Offer?
- Dalton Investments Going Activist on Kolmar Holdings and NAV Valuation
- Rio Tinto Dual-Listed Company (DLC) Unification Analysis
- Central Banks Hold Steady Amid Global Economic Uncertainty
- Lifeway Foods Faces Potential Sale to Danone Amidst Board Overhaul and Family Feud Resolution by June 2025
Boss Maki Goes Hard on Base (4477) – Interesting Situation
- Melco Holdings (6676 JP) chairman Hiroyuki MAKI bought up a 14% stake in BASE Inc (4477 JP) in just under two weeks. It was done quite transparently. He announced daily.
- He wants to get to 30% in a Tender Offer. The method, approach, lack of transparency, and similarity to previous situations where he invested has the company wary.
- This looks like a Poison Pill case in the offing. It WAS a cheap stock. It is not expensive now. But it is not clear what the endgame is here.
Idemitsu (5019) – Buyback Announced, Executed, To Be Executed Again; Pressure & Timing
- In February, Idemitsu Kosan (5019 JP) announced a new buyback to start when the then-existing one had not yet been completed. This is a pattern the last few years.
- On Tuesday, Idemitsu announced the method. Shareholder structure means there is pressure here, and its major peer sees buyback pressure drop imminently.
- Be aware of tilts and timing, and what might come in May.
Quiddity Leaderboard ChiNext & ChiNext 50 Jun25: US$1.4bn Total One-Way Flows; Basket Trade Idea
- The ChiNext index represents the performance of the 100 largest and most liquid A-share stocks listed on the ChiNext Market of the Shenzhen Stock Exchange.
- The ChiNext 50 index is a subset of the ChiNext index and it consists of the top 50 names in the ChiNext index with the highest daily average turnover.
- We see 9 changes for the ChiNext index and 5 changes for the ChiNext 50 index in the next index rebal event in June 2025.
Dropsuite (DSE AU): Topline Selling Is A Buying Opportunity
- Back on the 28th January, Dropsuite Ltd (DSE AU), a backup, recovery and protection software company, entered into a Scheme Implementation Deed with Texas-based IT automation outfit NinjaOne.
- NinjaOne’s A$5.90/share Offer was a 34.1% premium to last close. The Offer has the backing of Dropsuite’s largest shareholder, Topline Capital (31%). Board & management hold a further 9%.
- Done & dusted no? Then Topline sold down to 19.7% on the 28th Jan, then 10.5% on the 28th Feb. The Takeover Panel now orders Topline to stop selling.
ENN Energy (2688 HK): Third Party Offer?
- ENN Energy (2688 HK), a major clean energy distributor based in China, is currently suspended pursuant to the Takeovers Code
- The largest shareholder is ENN Group (34.28% of shares out), an entity controlled by founder Wang Yusuo and his wife, Zhao Baoju.
- ENN Energy is a US$8.5bn market cap company. It’s possible ENN Group make an Offer. But more likely, I’d expect an Offer from a (larger) third party.
Dalton Investments Going Activist on Kolmar Holdings and NAV Valuation
- In this insight, we discuss Dalton Investments which recently started to go activist on Kolmar Korea Holdings (024720 KS) and NAV valuation of this company.
- Our base case valuation of Kolmar Holdings is NAV of 475 billion won or NAV per share of 13,836 won, representing a 46% upside from current levels.
- Dalton Investments is likely to pressure Kolmar Holdings to increase share buyback and cancellations.
Rio Tinto Dual-Listed Company (DLC) Unification Analysis
- Unification could unlock $27-32B in value, driven by cost synergies, franking credit release, and index upweighting, enhancing Rio Tinto’s market positioning and shareholder returns.
- $2.88B in franking credits are lost annually due to the DLC structure; unification enables full utilization via higher franked dividends and strategic off-market buybacks.
- Increased ASX200 and FTSE100 weighting post-unification could drive $5-7B in passive fund inflows, improving liquidity, stock valuation, and institutional investor appeal.
Central Banks Hold Steady Amid Global Economic Uncertainty
- Central banks globally are making rate decisions, with the Fed holding steady while Sweden, Switzerland, Taiwan, and the UK announce their decisions today.
- Mexico and Canada are central banks to watch, with Fitch forecasting both economies to enter recession in 2025 due to their high US trade exposure.
- The US’s global reciprocal tariffs, set to be revealed on April 2, have significant implications for the global economy, with the potential to influence central bank policies worldwide.
Lifeway Foods Faces Potential Sale to Danone Amidst Board Overhaul and Family Feud Resolution by June 2025
- Danone offered to buy Lifeway at $25/share in September 2024, raised to $27/share in November 2024.
- Lifeway’s board rejected Danone’s offers, claiming $27/share undervalues the company; CEO Julie Smolyansky increased her compensation.
- Edward and Ludmila Smolyansky, with Danone, control 50% of Lifeway, aiming to replace the board and negotiate a sale.
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