In today’s briefing:
- Fuji Soft (9749) – As Bain Prepares to Go Higher, KKR Goes Lower
- Young Poong Precision (036560 KS) Also Now Trading Through Terms
- Details of MBK’s Four Major Concerns on Management of Korea Zinc
- Tokyo Metro (9023 JP): IPO Listing & Fast-Entry Approved
- Will New KOSDAQ 150 Member HLB Therapeutics Show Webzen-Like Price Moves?
- Brookfield/Grifols: Recap and Analysis of Latest Developments
- EQD | HSI September Rally: What’s Next?
Fuji Soft (9749) – As Bain Prepares to Go Higher, KKR Goes Lower
- Yesterday, KKR amended its plans to take over Fuji Soft Inc (9749 JP) by creating a Two-Tender Scheme, effectively lowering the threshold for eventual success through clearly coercive tactics.
- 3D (23.46%) and Farallon (9.22%) had already tendered. Contractual terms make it difficult (not impossible) to withdraw. Assuming it goes through, KKR has 32.68%, quasi-negative control.
- This revised structure is clearly abusive of minorities and NOT the deal Fuji Soft signed. This should cause Fuji Soft to Change their Opinion. Shareholder (and Bain) Pressure would help.
Young Poong Precision (036560 KS) Also Now Trading Through Terms
- On the 13th September, MBK joined Young Poong (000670 KS) in seeking control of Korea Zinc (010130 KS) via Partial Tender Offers for KZ and Young Poong Precision (036560 KS).
- This situation has been canvassed by analysts here at Smartkarma; with increasing expectation the Choi family makes a counterbid.
- This insight analyses the fair value of YPP. No matter how you slice it, the Offer Price is punchy. Perhaps not punchier enough.
Details of MBK’s Four Major Concerns on Management of Korea Zinc
- In this insight, we discuss in detail MBK’s four major concerns on the management of Korea Zinc.
- We believe that MBK has legitimate concerns on especially the three factors including poor investments, deteriorating profitability, and increase in equity capital/disposal of treasury shares.
- If and when the 2 trillion won+ is raised, then it could lead to another tender offer and the four concerns highlighted in this insight become much more important.
Tokyo Metro (9023 JP): IPO Listing & Fast-Entry Approved
- Tokyo Metro (TKYMETRO JP) is scheduled to go public on 23 October 2024 with an IPO valuation of ~$4.4bn and a float market cap of ~$2.2bn.
- Fast-Entry for the one Global Index is expected at the close of 29 October 2024 with forecasted demand of ~17.4m shares and ~$133m.
- Quarterly inclusion at the May 2025 review has a higher probability with a slight price rally or an elevated IPO offering price. Forecasted demand is ~23.2m shares and ~$177m.
Will New KOSDAQ 150 Member HLB Therapeutics Show Webzen-Like Price Moves?
- Jeisys Medical’s getting booted from the KOSDAQ 150, and HLB Therapeutics is stepping in as the new addition. This change will officially hit the book on Wednesday, September 25.
- HLB Therapeutics, with a ₩0.70T market cap and 87% float, is set for a 0.51% weight in KOSDAQ 150, triggering over 2 million shares in passive buying: 3.26x 30-day ADTV.
- With today’s after-hours volume spike in HLB Therapeutics, we’re likely to see some price action from early movers spilling into Monday’s open, similar to what we saw with Webzen.
Brookfield/Grifols: Recap and Analysis of Latest Developments
- Since Brookfield’s July 8 takeover interest for Grifols was announced, the situation has become complicated, with unclear pricing, funding challenges, and uncertainty about whether an offer will materialize or when.
- Grifols operates in a consolidated plasma-derived therapies market with high entry barriers, and its current valuation of 8.6x NTM EBITDAe significantly undervalues it compared to CSL’s 19.2x.
- B shares closed on September 20 in Madrid at a 17.3% discount to A shares. Paying this spread would be my favored approach to gain exposure to a potential offer.
EQD | HSI September Rally: What’s Next?
- We continue our coverage of the Hang Seng Index : in our previous insight we theorized a continuation of the rally in September.
- So far the index is following the path outlined (pullback, then rally). What is going to happen in the next few weeks, if September closes up?
- Broadly speaking we see a potential continuation of the rally in October, but there may be some resistance in the short-term.
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