In today’s briefing:
- Cosmo Energy (5021) Vs Murakami – It’s On!
- Japan Excellent (8987). It WAS Most Excellent. That’s Now Done.
- Tianneng (819 HK): EV Battery Play Seeks Swiss Listing
- Esso Thailand: Bangchak Corp’s Takeunder
- Selected European Holdcos and DLC: New Year‘23 Report
- EQD | FXI (FXI US): – Could Chinese Equities Lead the Way Higher? Use Options for Delta-Follow Up
Cosmo Energy (5021) Vs Murakami – It’s On!
- In March 2022, longtime Cosmo Energy Holdings (5021 JP) holder Mubadala sold the last 15.7% of Cosmo Energy in a block sale after having sold 5% 8 months earlier.
- A month later it was revealed noted Japanese activist Murakami-san had bought 5.1%. A week later it was 8.3%. Then he bought more. Cosmo announced a buyback in May 2022.
- By November Murakami-san had 19.8%. But behind the scenes there had been discussions and those are now coming to light. Cosmo has announced possible defence measures.
Japan Excellent (8987). It WAS Most Excellent. That’s Now Done.
- 4.5 months ago I wrote about a possible “Sustained Flow Event” on Japan Excellent (8987 JP). Since then, the stock has outperformed every other Office REIT. It’s up since then.
- Outperformance within Office REITs has been a minimum of 3.5%, and a maximum of ~20.8% vs the biggest peer, with an average and median outperformance of 11.7% and 13.4% respectively.
- This idiosyncratic story has come to an end. It may be a temporary end, but I don’t see the next catalyst.
Tianneng (819 HK): EV Battery Play Seeks Swiss Listing
- In January 2021, Tianneng Power (819 HK)‘s (TPI) battery unit Tianneng Battery (688819 CH) (TBG) was listed on China’s Star Market, as discussed in Tianneng: Star Market Battery Spin-Off Priced.
- TBG is now proposing the issuance of GDRs, accounting for 10% of existing shares out, to be listed on the SIX Swiss Exchange.
- A circular has been issued and TPI shareholders go to the vote on the 31 January. TPI currently holds 86.53% in TBG worth >300% of its market cap.
Esso Thailand: Bangchak Corp’s Takeunder
- Refiner/retailer Bangchak Corporation (BCP TB)‘s board has approved the purchase of a 65.99% stake in Esso Thailand (ESSO TB) from Exxon Mobil (XOM US).
- The purchase price is subject to a price adjustment mechanism and will only be known upon completion of the SPA. The indicative Offer Price is THB 8.84, 20% below undisturbed.
- Once completed – tentatively anticipated in the 3Q23 – a mandatory tender offer will be triggered for the remaining 34.01% of shares out in Esso.
Selected European Holdcos and DLC: New Year‘23 Report
- Discounts to NAV of covered holdcos have generally widened since mid-December.
- Discounts to NAV (11 January): C.F.Alba, 48.9%; GBL, 36.3%; Heineken Holding, 19.5%; Industrivärden C, 14.3%; Investor B, 15.9%; Porsche Automobile Holding, 45%. The spread of Rio Tinto DLC tightened to 10.8%.
- Spreads tend to widen in bear markets but short-term recoveries provide opportunities on tightening discounts. Recommended trades are: GBL, Porsche Automobile Holding, Rio Tinto (DLC), CF Alba (long position).
EQD | FXI (FXI US): – Could Chinese Equities Lead the Way Higher? Use Options for Delta-Follow Up
- On 30th November we proposed a restructure of a bullish FXI US trade
- Since then FXI US has rallied 12% and implied vols have decreased significantly
- We evaluate the call ladder that we highlighted and consider what to do next
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