In today’s briefing:
- Estimating Participation Rate for Hyundai HS Tender Offer, Currently at a 5% Spread
- Langham Hospitality Investments (1270 HK): Great Eagle (41 HK)’s Possible Scheme Privatisation
- HSTECH Index Rebalance Preview: Round-Trip Trade of US$1.5bn in June
- Tender Offer of 25% of Hyundai Home Shopping Shares by Hyundai GF Holdings
- ABFRL’s Demerger: A Game-Changer or a Gamble?
- Quiddity Leaderboard for Hang Seng Index Jun 24: Could Country Garden Services Get Deleted?
Estimating Participation Rate for Hyundai HS Tender Offer, Currently at a 5% Spread
- It is somewhat unusual that there is still a spread of over 5%. This likely reflects concerns about the relatively high intensity of allocation risk.
- Retail: 30%, Institutions: 16% of float shares (46%). Retailers may contribute 20%, institutions 10-15%. Total tender rate: 30-35%.
- In that case, it means that roughly 70% of our holdings could be tendered. And at this level, it seems reasonable enough to target the current spread of 5%.
Langham Hospitality Investments (1270 HK): Great Eagle (41 HK)’s Possible Scheme Privatisation
- Langham Hospitality Inv Ss (1270 HK) received a notice from Great Eagle Holdings (41 HK), the largest unitholder, that it intends to present a detailed proposal for scheme privatisation.
- The privatisation interest is unsurprising, as the unit price has declined by 43% over the last twelve months. A tough 2023 did not help the declining sentiment.
- Our methodology for triangulating the potential offer price results in a range of HK$0.63-1.76. Our best guess is an offer of around HK$0.85, a 47% premium to the last close.
HSTECH Index Rebalance Preview: Round-Trip Trade of US$1.5bn in June
- With no stocks in outright inclusion or deletion zone, we do not expect any constituent changes for the Hang Seng TECH Index (HSTECH INDEX) in June.
- Capping changes will result in a one-way turnover of 5.3% leading to a round-trip trade of US$1.51bn.
- Li Auto (2015 HK) is expected to be the largest buy in June following the stock being the largest sell at the March rebalance (also due to capping).
Tender Offer of 25% of Hyundai Home Shopping Shares by Hyundai GF Holdings
- On 3 April, it was reported that Hyundai G.F. Holdings will be conducting a tender offer of 3 million shares of Hyundai Home Shopping (25% of outstanding shares).
- The tender offer price is 64,200 won. The main reason for this tender offer is to meet the regulatory requirement of a holding company by 2025.
- We are positive on the tender offer of a 25% stake in Hyundai Home Shopping by Hyundai G.F. Holdings.
ABFRL’s Demerger: A Game-Changer or a Gamble?
- Aditya Birla Fashion and Retail Ltd (ABFRL IN) on 1st April announced a vertical demerger and separate listing of its matured and asset-light Madura brand portfolio.
- Assessment of demerger: whether it is seriously a value creation opportunity or just a strategic gimmick for merger-demerger in Mega Bull Run.
- Valuation of Aditya Birla Fashion and Retail Ltd (ABFRL IN) , whether any juice left in the company?
Quiddity Leaderboard for Hang Seng Index Jun 24: Could Country Garden Services Get Deleted?
- In this insight, we take a look at a group of names with reasonably high likelihood of being involved in index changes for the Hang Seng Index in June 2024.
- The index changes for the June 2024 index rebal will be announced on 17th May 2024.
- The HSI selection process is highly subjective and does not follow clear-cut rules. This insight is simply an attempt to provide readers with an overall understanding of the possible scenarios.
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