In today’s briefing:
- Celltrion Merger: Index Implications
- Celltrion Merger Swap: Conditions & Schedule
- Celltrion (068270 KS) Merger with Celltrion Healthcare (091990 KS)
- Sanei Architecture Planning (3228) Finds Saviour from Mafia-Linked Former Boss and Majority Owner
- Quiddity Leaderboard STAR 50 Dec 23: The Real Deal
- Second Go-Round Tender for T&K TOKA (4636) As Bain Wants It All At ¥1,400/Share
- NIFTY NEXT50 Index Rebalance: Five Changes; Big Impact; Cross Index Flow
- Tesserent’s Shareholders To Vote on 18 Sept As FIRB Mulls Thales Offer
- T&K Toka (4636 JP): Bain’s JPY1,400 Pre-Conditional Tender Offer
- Quiddity Leaderboard CSI 300/500 Dec 23: US$2.5bn One-Way Turnover; Some Changes to Expectations
Celltrion Merger: Index Implications
- Celltrion Inc (068270 KS) and Celltrion Healthcare (091990 KS) will merge later this year. Celltrion Pharm (068760 KS) has been left out for now; it could be merged next year.
- For each share of Celltrion Healthcare (091990 KS) held, shareholders will receive 0.449262 shares of Celltrion Inc (068270 KS).
- There will be implications for the Korea Stock Exchange Kospi Index (KOSPI INDEX) and KOSDAQ 150 Index (KOSDQ150 INDEX) with funding flows and index replacements.
Celltrion Merger Swap: Conditions & Schedule
- The swap prices, ₩148,853 for Celltrion Inc and ₩66,874 for Celltrion Healthcare, specified below are not tentative prices but confirmed prices. So, the merger ratio has been determined as 1:0.4492620.
- The key focus now is the appraisal rights exercise. Both offer attractive spreads. Yet, the ₩1T combined ceiling might seem restricted considering potential dissenting Celltrion Inc shareholders exceeding expectations.
- Nonetheless, considering the strong determination of the company towards this merger, we should consider a strategy of approaching this spread aggressively while keeping the cancellation risk in mind.
Celltrion (068270 KS) Merger with Celltrion Healthcare (091990 KS)
- Celltrion Inc (068270 KS) will merger with Celltrion Healthcare (091990 KS). Celltrion Healthcare shareholders will receive 0.4492620 Celltrion shares per Celltrion Healthcare share.
- The merger requires shareholder (approval by at least two-thirds of the votes of the shareholders present representing at least one-third of the outstanding shares) and Fair Trade Commission approval.
- The merger ratio, based on regulations, is attractive compared to historical VWAP exchange ratios and multiples. At last close prices, Celltrion Healthcare shares are trading broadly at terms.
Sanei Architecture Planning (3228) Finds Saviour from Mafia-Linked Former Boss and Majority Owner
- [cue Tom Hardy gif saying “That’s Bait”]. But yes, this story has a backstory to the Japanese underworld, and while the original sin may have been minor, it’s everything.
- The firm was raided, the CEO resigned, a govt authority “recommended” Sanei get rid of Mr Koike’s influence, banks got antsy, employee morale dropped. Sanei needed a saviour.
- Koike-San asked Open House (3288 JP) to buy his shares. They agreed to take over the company. It’s basically a done deal with a possible twist.
Quiddity Leaderboard STAR 50 Dec 23: The Real Deal
- STAR 50 Index is a tech-focused, blue-chip index in Mainland China which tracks the top 50 largest and most liquid names in the STAR market of the Shanghai Stock Exchange.
- Recently, I discussed the historical price and volume performance of STAR 50 rebalance events in Quiddity Primer for STAR 50 Index Rebalance Events.
- In this insight, we take a look at our expectations for potential ADDs and DELs for the STAR 50 index during the December 2023 Rebalance event.
Second Go-Round Tender for T&K TOKA (4636) As Bain Wants It All At ¥1,400/Share
- In January 2023, NAVF and Michael 1925 LLC – affiliates of Dalton Investments LLC – announced a hostile partial Tender Offer for T&K Toka Co Ltd (4636 JP).
- It failed. They wanted to buy 21.72% at ¥1300 to get to 44% post-Tender. The Company objected. Dalton/etc didn’t get the shares. Shares fell afterward.
- Today, Bain announced a deal to take over the company at ¥1,400/share. T&K TOKA has agreed. It may not be as easy as that. And there is a fulcrum investor.
NIFTY NEXT50 Index Rebalance: Five Changes; Big Impact; Cross Index Flow
- NSE Indices has continued to use the current index methodology to come up with the 5 adds/deletes. The proposed methodology seems to be put on ice for reasons unknown.
- Punjab National Bank, Shriram Transport Finance, Trent, TVS Motor and Zydus Lifesciences will replace ACC, FSN E-Commerce Ventures, HDFC Asset Management, Indus Towers and Page Industries.
- The adds, deletes, capping and funding changes will result in one-way turnover of 13% and in a one-way trade of INR 20.77bn. The impact on the adds/deletes is big.
Tesserent’s Shareholders To Vote on 18 Sept As FIRB Mulls Thales Offer
- Back on the 13 June, cybersecurity firm Tesserent Ltd (TNT AU) announced a Scheme with France’s Thales SA (HO FP). Thales is offering A$0.13/share, a 165% premium to last close.
- The Scheme Doc has been despatched with Tesserent shareholders voting on the 18 September. Tesserent’s board (holding 9.23%) and the IE are supportive. Implementation expected on the 4 October.
- The Offer is also subject to FIRB signing off. New Zealand’s OIO gave the green light on the 18 July.
T&K Toka (4636 JP): Bain’s JPY1,400 Pre-Conditional Tender Offer
- T&K Toka Co Ltd (4636 JP) has recommended Bain’s pre-conditional tender offer of JPY1,400 per share, a 32.0% premium to the undisturbed price.
- The pre-conditions relate to China TOB treatment measures (T&K Toka sell downs its Hangzhou Toka Ink stake to hold less than 30%) and various country approvals (Japan and Serbia).
- The offer will open in early January 2024. The minimum acceptance condition requires a 39.2% minority acceptance rate (50.3% excluding Nippon Active), which is doable due to a reasonable offer.
Quiddity Leaderboard CSI 300/500 Dec 23: US$2.5bn One-Way Turnover; Some Changes to Expectations
- CSI 300 represents the 300 largest stocks by market capitalization and liquidity from the entire universe of Shanghai and Shenzhen Stock Exchanges. CSI 500 represents the next largest 500 names.
- In this insight, we take a look at the potential ADDs/DELs for the CSI 300 and CSI 500 rebalance in December 2023.
- I currently expect 14 ADDs/DELs for CSI 300 and 50 ADDs/DELs for CSI 500.
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