In today’s briefing:
- Fengxiang’s Unconditional MGO at HK$ 1.5132 from PAG
- Hyundai Elevator: Announces a Major Share Buyback Program
- Index Rebalance & ETF Flow Recap: S&P/ASX, STAR50, CSI300, SSE50, IDX, GOTO, SMM/KEP
- Last Week In Event SPACE: Keppel/Sembcorp, Socionext, Jinke Smart, Hitachi Transport, Lifestyle Intl
- Nitro’s Carrot-And-Stick A$1.80 Takeover Offer from Potentia
- Pushpay Enters a SID with Sixth Street/BGH at NZ$1.34
- KOSDAQ150 Ad Hoc Index Rebalance: LX Semicon OUT, Nextin IN
- (Mostly) Asia-Pac Weekly Risk Arb Wrap: ELMO, Kingston Financial, Hitachi Transport, Nearmap, Aruhi
- Hong Kong CEO & Director Dealings: 28th Oct: Haichang Ocean Park, CC Land, GBA
- Pushpay: BGH/Sixth Street Keep The Faith With $1.34/Share Tilt
Fengxiang’s Unconditional MGO at HK$ 1.5132 from PAG
- PAG is the successful bidder for Shandong Fengxiang (9977 HK)‘s controlling shareholder’s 70.92% stake at HK$1.5132 per H Share (RMB1.3822 per domestic share).
- As PAG has no compulsory acquisition rights, it will also seek shareholder delisting approval. The MGO is not conditional on the approval of the delisting resolution.
- The share sale transfer requires SAMR approval which will be forthcoming. Our best guess is the MGO completes end-January 2023. At the last close, the gross spread is 14.6%.
Hyundai Elevator: Announces a Major Share Buyback Program
- On 28 October, Hyundai Elevator Co (017800 KS) announced a major share buyback program worth 2.1 million shares, representing 5.1% of outstanding shares or about 50 billion won.
- Hyundai Elevator Co Ltd makes excellent elevators and it is the number one player in the elevator industry in Korea with a 41% market share as of 2Q 2022.
- Despite the company’s valuations trading at lower levels than its recent historical levels, the negative factors impacting the company are much bigger in scale than the share buyback program.
Index Rebalance & ETF Flow Recap: S&P/ASX, STAR50, CSI300, SSE50, IDX, GOTO, SMM/KEP
- The review period for the MSCI Nov SAIR, Kospi 200 Index, KOSDAQ 150 Index, S&P BSE SENSEX Index and a bunch of mainland China indices ends on 31 October.
- The minor rebalancing of the IDX30, LQ45 and IDX80 indices takes place at the close on 31 October, while the KOSDAQ 150 Index ad hoc rebalance is on 2 November.
- There were outflows from IShares Core MSCI Asia Ex Japan ETF (3010 HK) and inflows to Tracker Fund (2800 HK) and Hang Seng H Share Index ETF (2828 HK).
Last Week In Event SPACE: Keppel/Sembcorp, Socionext, Jinke Smart, Hitachi Transport, Lifestyle Intl
- Under revised terms, Sembcorp (SMM SP) will issue fewer shares to Keppel (KEP SP). It’s now a takeover rather than Scheme. Keppel will deliver more shares to shareholders, keeping less.
- Stay cautiously positive on Socionext (6526 JP) until the stock starts trading as if those who bought on momentum look like they are getting out.
- With investors chucking in the towel and the HSI touching a thirteen-year low, it’s time for some old-school perspective applying Benjamin Graham’s Net Nets
Nitro’s Carrot-And-Stick A$1.80 Takeover Offer from Potentia
- Nitro Software Ltd (NTO AU) entered a trading halt in response to Potentia’s off-market takeover offer of A$1.80 per share, a 13.9% premium to its previous rejected offer of A$1.58.
- Potentia will block rival schemes and not accept competing takeover offers. This move will make it hard for the Board to convince a rival bidder to table an offer.
- Potentia wants a friendly offer and placed majority Board support as a condition. The offer is unattractive but Potentia has hinted at improved terms if provided due diligence access.
Pushpay Enters a SID with Sixth Street/BGH at NZ$1.34
- Pushpay Holdings (PPH NZ) entered a scheme implementation deed (SID) with Sixth Street/BGH at NZ$1.34 per share, a 30.1% premium to the undisturbed price (12.6% premium to the last close).
- The key conditions are shareholder and regulatory (OIO & US antitrust) approvals. The scheme meeting is in 1Q23.
- The offer is light. A concentrated shareholder register and signs of retail opposition are risks. A 75% deal probability, implies buying up to NZ$1.27 per share.
KOSDAQ150 Ad Hoc Index Rebalance: LX Semicon OUT, Nextin IN
- Following its planned section transfer, LX Semicon (108320 KS) will be deleted from the KOSDAQ 150 Index at the close on 2 November and replaced by Nextin (348210 KS).
- Passive trackers will need to buy over 4.5 days of ADV on Nextin (348210 KS) and sell over 1.5 days of ADV on LX Semicon (108320 KS).
- Belonging to the Information Technology sector, there is zero chance of LX Semicon (108320 KS) being added to the Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX).
(Mostly) Asia-Pac Weekly Risk Arb Wrap: ELMO, Kingston Financial, Hitachi Transport, Nearmap, Aruhi
- There are 45 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
- Three new deals discussed on Smartkarma this week: K1’s Offer for Elmo Software (ELO AU), Chu’s Offer for Kingston Financial (1031 HK), KKR’s tilt for Hitachi Transport System (9086 JP).
- Key updates took place for Nearmap Ltd (NEA AU), Jinke Smart Services (9666 HK), Lifestyle International Holdings (1212 HK), and Aruhi Corp (7198 JP).
Hong Kong CEO & Director Dealings: 28th Oct: Haichang Ocean Park, CC Land, GBA
- The data in this insight is collated from the “shareholding disclosure” link on the HKEx website.
- Often there is a corresponding HKEx announcement on the increase – or decrease – in the shareholding by directors. However, such disclosures are by no means an absolute.
- These insights may flag those companies where shares have been pledged. Stocks mentioned include Haichang Ocean Park Holdings (2255 HK), C C Land (1224 HK), and GBA Holdings (261 HK).
Pushpay: BGH/Sixth Street Keep The Faith With $1.34/Share Tilt
- Church donor management tech play Pushpay (PPH NZ) has been fielding expressions of interest since April. Earlier this month, Pushpay announced it had received another proposal, reportedly from BGH/Sixth Street.
- On the 28 October, Puspay announced it had entered into a Scheme Implementation Agreement at NZ$1.34/share with BGH/Sixth Street, which collectively hold 20.34%. This is a 30.1% premium to undisturbed.
- The offer is subject to shareholder and regulatory approval, with a possible completion date in early 2Q23.
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