In today’s briefing:
- Carlyle To Take KFC Japan (9873) Private at ¥6,500/Share – Big Win For All, a Model Transaction
- L’Occitane (973 HK): Who Owns What, And When
- JAPAN ACTIVISM: Murakami-Related Buyers Go from 5% to 20% of Mitsui Matsushima (1518) In 5 Days. Hmm
- Block Deal Sales of 200 Billion Won Worth of Ecopro Materials by BRV Capital
- KFC Holdings Japan (9873 JP): Carlyle Finger Lickin’ Tender Offer at JPY6,500
- Yuanta/P-Shares Taiwan Div+ ETF Rebalance Preview: 13% One-Way Turnover & US$2.27bn Trade
- Star Entertainment (SGR AU): Hard Rock Rolls The Dice
- FnGuide Top10 Index Rebalance Preview: Two Changes Possible in June
- Hansol Holdings Announces a Tender Offer of 18.53% Stake in Hansol Logistics
- EP Group/IDS (Royal Mail): Politically Sensitive
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Carlyle To Take KFC Japan (9873) Private at ¥6,500/Share – Big Win For All, a Model Transaction
- Carlyle has a deal to buy Kfc Holdings Japan (9873 JP). ¥6,500/share is a 78% premium to undisturbed as a professional holder sells in an auction to the highest bidder.
- That’s a great format for achieving a great price. And we got one. This should get done easily.
- Importantly, the Bidco is named Crispy KK. It is 100% owned by Juicy KK. Juicy KK itself is 100% owned by Crispy Holdings L.P. Someone had some fun.
L’Occitane (973 HK): Who Owns What, And When
- A fortnight ago, I sought access to L’Occitane (973 HK)‘s lesser-known shareholder register, a byproduct of investigative disclosure reports under Chapter 571, s329 of the Securities and Futures Ordinance.
- This is the same register I discussed in Giordano (709 HK): A Closer Look At The Shareholder Register Ahead Of The SGM; and one also used by proxy solicitors.
- The register confirms what has been long rumoured about a certain shareholder activist. It is also informative for what isn’t present.
JAPAN ACTIVISM: Murakami-Related Buyers Go from 5% to 20% of Mitsui Matsushima (1518) In 5 Days. Hmm
- Mitsui Matsushima (1518 JP) was a coal company starting over 100yrs ago. A bunch of years ago it started a solar energy business and then started M&A to diversify.
- Coal closed last year and since, MMH has become an investment holdco for “basic businesses” (drinking straws, conveyor system chains, document shredders, weighing machines, crystal measuring devices, mask blanks, etc).
- Murakami Group accumulated 4.98% in five weeks, then the next 14.9% in five days. Pump & Dump like Pacific Metals? Activism like JAFCO? Or something else more interesting?
Block Deal Sales of 200 Billion Won Worth of Ecopro Materials by BRV Capital
- After the market close on 20 May, it was reported that Blue Run Ventures (BRV) sold 204.1 billion won (US$150 million) worth of EcoPro Materials in a block deal sale.
- The block deal sale price was 93,000 won, a 9.7% discount to the closing price on 20 May (103,000 won).
- This block deal sale at a big discount is likely to raise overhang concerns about further block deal sales by BRV Capital in the coming years.
KFC Holdings Japan (9873 JP): Carlyle Finger Lickin’ Tender Offer at JPY6,500
- Kfc Holdings Japan (9873 JP) has recommended a tender offer from Carlyle Group / (CG US) at JPY6,500 per share, a 20.4% premium to the last close.
- The transaction is a two-step acquisition through a cash tender offer and subsequent squeeze-out. The lower limit of the tender offer is set at a 31.54% ownership ratio.
- Due to the Mitsubishi Corp (8058 JP) irrevocable, the minimum acceptance condition requires a 48.6% minority acceptance rate. The acceptance condition is achievable as the offer is a knockout bid.
Yuanta/P-Shares Taiwan Div+ ETF Rebalance Preview: 13% One-Way Turnover & US$2.27bn Trade
- Using data from the close on 17 May, there could be 5 changes to the Yuanta/P-Shares Taiwan Dividend Plus ETF in June.
- There will also be capping and funding flows that will lead to a one-way turnover of 12.6% and a one-way trade of US$1.13bn.
- Shorts have increased on the potential adds and potential deletes and covering will lead to rally in some stocks while providing support in others at rebalance implementation.
Star Entertainment (SGR AU): Hard Rock Rolls The Dice
- Troubled casino operator Star Entertainment (SGR AU) announced it had “received inbound interest” from several parties, including “Hard Rock Hotels & Resorts … a local partner of Hard Rock”.
- Star is in the doghouse, again, as the regulator conducts (another) review amid concerns Star did not do enough to remedy the problems identified in the first review.
- Facing “serious and systemic non-compliance” with anti-money laundering laws, Star faces the distinct possibility of losing is casino licence in Sydney; and potentially the one in Queensland.
FnGuide Top10 Index Rebalance Preview: Two Changes Possible in June
- The Mirae Asset Tiger Top 10 ETF (292150 KS) tracks the FnGuide Top 10 Index and has an AUM of around US$1.2bn.
- We currently forecast two potential changes at the next rebalance in June – one change is high probability while one could change depending on price moves over the next week.
- The trade has performed well historically with positive performance till implementation followed by reversion post implementation.
Hansol Holdings Announces a Tender Offer of 18.53% Stake in Hansol Logistics
- After the market close on 20 May, Hansol Holdings announced that it is pursuing a tender offer for an additional 18.53% stake in its affiliate Hansol Logistics.
- The tender offer price is 3,000 won, which is 22% higher than the close price on 20 May. The tender offer period is from 21 May to 10 June.
- We have a positive view of this tender offer. Hansol Logistics trades at EV/EBITDA of 1.8x, P/E of 3.7x, and P/B of 0.6x based on 2023 figures.
EP Group/IDS (Royal Mail): Politically Sensitive
- The UK Chancellor stated that any bid for International Distributions Services (IDS LN) (Royal Mail owner) would be thoroughly evaluated for national security considerations to prevent any risks to essential infrastructure.
- The Board is “minded to accept” the improved 370p takeover proposal (4.8x EV/Fwd NTM EBITDA) from Czech billionaire Daniel Kretinsky’s EP Group, should a formal bid is made.
- The improved proposal seems fair. GLS is profitable, while Royal Mail aims break-even by March2025e. Concerns about potential developments post-offer pose a potential political issue. Gross spread is 13.5%.