In today’s briefing:
- Celltrion Merger: Appraisal Rights & Passive Flows
- Japan H1 Bank Earnings: Interest/Fees Up, Expenses/Credit Costs Down – Opportunity Abounds, Still
- Symbio Backs ABB’s Reduced Terms
- AMFI Stock Reclassification Preview (Dec 2023): HUGE Outperformance as Active and Passive Meet
- Symbio (SYM AU): Aussie Broadband’s Lower Binding Proposal
Celltrion Merger: Appraisal Rights & Passive Flows
- The Appraisal rights exercise period ends on 13 November. If the NPS and other large shareholders exercise their rights in Celltrion Inc (068270 KS), the merger could be in trouble.
- Both stocks are trading close to their exercise price and could be supported due to the companies buying back their shares.
- There will be passive flows from local and global trackers and there does not appear to be pre-positioning. That is likely due to the risk of potential merger cancellation.
Japan H1 Bank Earnings: Interest/Fees Up, Expenses/Credit Costs Down – Opportunity Abounds, Still
- 40% of Banks outside the Top 7 (none of which offered H1 guidance) in the TOPIX Banks Index have now changed H1 guidance or reported H1. 2 reported both up.
- 92% of the others have revised up H1 net income guidance a weighted average of 47%. Net Interest Income, Corporate fees/comms are up, expenses and credit costs are down.
- Big tables with data, reasons for guidance changes, and buyback history of each presented below.
Symbio Backs ABB’s Reduced Terms
- Back on the 22 September, Superloop Ltd (SLC AU) lobbed a best and final cash/scrip NBIO for Symbio Holdings (SYM AU) with an implied price of A$2.85/share.
- Aussie Broadband Pty Ltd (ABB AU) then tabled a cash/scrip Offer, with an implied price of A$3.151/share. Symbio was supportive, if terms were firmed. Superloop’s Offer subsequently lapsed.
- ABB returned with a reduced cash/scrip Offer of A$2.99-$3.04/share. Symbio has unanimously recommended the Offer (at A$3.011/share) and they entered into a Scheme agreement. A partially/fully franked dividend is permitted.
AMFI Stock Reclassification Preview (Dec 2023): HUGE Outperformance as Active and Passive Meet
- We see 8 stocks moving from MidCap to LargeCap, 8 stocks moving from LargeCap to MidCap, 13 stocks from SmallCap to MidCap, and 14 stocks from MidCap to SmallCap.
- Some stocks are expected to be inclusions to global indices later this month while others are potential NIFTY Index and/or Nifty Next 50 Index changes in March.
- On average, the upward migrating stocks have outperformed the downward migrating stocks by close to 100% over the last 8 months. The passive flow can be used as an exit.
Symbio (SYM AU): Aussie Broadband’s Lower Binding Proposal
- Symbio Holdings (SYM AU)‘s binding proposal with Aussie Broadband Pty Ltd (ABB AU) is at A$2.26 cash and 0.192 ABB shares per SYM share, 3.2% lower than its earlier proposal.
- The key condition is shareholder approval. The scheme booklet will be despatched on 22 December, with a scheme meeting in early February 2024.
- While the offer is light compared to long-term historical prices and multiples, there seem to be no signs of dissent from institutional or retail investors.
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