In today’s briefing:
- Fuji Soft (9749 JP) – The Fine Print Is Worth Reading
- Shinko Electric (6967 JP) Takeover – THIS Is a Dip to Buy
- Hang Seng Internet & IT Index (HSIII) Rebalance Preview: Capping Flows in December
- Entry Opportunities from Delisting Risk Due to Korea Zinc’s Post-Buyback Volume Drying Up
- Doosan’s Tweaked Restructuring Play: My Take on Hitting Robotics’ 13% Spread
- Hyundai Motor India IPO: How Far to Fast Entry?
- Korea Zinc: Court Dismisses the Second Injunction Filed by MBK
- Quiddity Leaderboard ASX Dec 24: Clarity Pharma and Resolute Mining Competing for ASX 200 Spot
- International Games System (3293 TT): Positioning & Potential Passive Buying
Fuji Soft (9749 JP) – The Fine Print Is Worth Reading
- On 11-Oct, Bain submitted a binding proposal for Fuji Soft Inc (9749 JP). On 15-Oct, FSI acknowledged, but questioned the Nozawa family commitment. Founder Nozawa wrote letters the 17th.
- O 18-Oct, FSI reiterated support for the KKR First Tender in a late night drop. It included fine print, but no media coverage. Today, FSI filed a Target Opinion Amendment.
- That filing included yet more fine print not in the public filing Friday. And KKR extended. The new fine print is nuanced. But worth reading.
Shinko Electric (6967 JP) Takeover – THIS Is a Dip to Buy
- Over the last few days, Shinko Electric Industries (6967 JP) shares have dipped lower than the previous standard trading range.
- I expect this weakness is related to investors in other deals deciding to sell this deal too. I believe it is not related to Shinko specifically.
- For that, while gap risk remains somewhat high, I still see break risk as low and see this as a great opportunity to buy the dip.
Hang Seng Internet & IT Index (HSIII) Rebalance Preview: Capping Flows in December
- The December rebalance for the HSIII Index only involves capping to limit stocks to 12% of the index weight. There will not be any constituent changes.
- Estimated one-way turnover at the rebalance is 4.4% resulting in a round-trip trade of HK$2.9bn (US$378m).
- The largest outflows are expected to be from Meituan (3690 HK) and JD.com (9618 HK) with inflows spread across the other index constituents.
Entry Opportunities from Delisting Risk Due to Korea Zinc’s Post-Buyback Volume Drying Up
- Korea Zinc’s delisting daily trading volume cutoff is 20K, about 0.12% of the total. We might see volumes plummet, making it tough to maintain even that 20K level.
- Keep an eye on trading opportunities; we have some time with delisting risks, but low trading volume could lead to being booted from the KOSPI 200 and Global Index.
- This sell-off could spike short-term volatility and create great entry points for trading, especially after the court approved the buyback tender, denying MBK’s injunction.
Doosan’s Tweaked Restructuring Play: My Take on Hitting Robotics’ 13% Spread
- The big question is how to cash in on the dissenters’ rights spread for Robotics. The main concern is cancellation risk, but the FSS doesn’t seem too negative on approval.
- To sustain nuclear momentum, Enerbility needs heavy borrowing for facility investments, requiring a lower debt ratio. Offloading debt-heavy Bobcat is a move shareholders might support.
- With NPS unlikely to ignore the government’s nuclear push, Robotics’ spread could narrow quickly. Despite cancellation risk and no hedge, the remaining juice makes an outright position worth considering.
Hyundai Motor India IPO: How Far to Fast Entry?
- Hyundai Motor (005380 KS) raised INR 279bn (US$3.3bn) by selling some of its stake in Hyundai Motor India (1342Z IN), valuing Hyundai India at INR 1,593bn (US$18.95bn).
- The anchor investor book was fully subscribed. The non-institutional and retail books were undersubscribed, so institutions got more stock. And that changes the free float estimates for one global index.
- Even with the higher float, Hyundai Motor India (1342Z IN) is unlikely to get Fast Entry to one global index later this month. Index inclusions should commence in February 2025.
Korea Zinc: Court Dismisses the Second Injunction Filed by MBK
- The Seoul Central District Court dismissed the second injunction filed by MBK Partners and Young Poong to suspend the share buyback/tender offer by Korea Zinc Chairman Choi and his allies.
- As a result of the court dismissing the second injunction filed by MBK, the M&A fight for Korea Zinc is likely to continue until the AGM in March 2025.
- Depending upon Korea Zinc’s tender offer subscription, there is a possibility of MBK buying more shares directly from the market if the subscription falls below the proposed amounts.
Quiddity Leaderboard ASX Dec 24: Clarity Pharma and Resolute Mining Competing for ASX 200 Spot
- In this insight, we take a look at the potential index changes for ASX200, 100, 50, and 20 in the run-up to the December 2024 index rebal event.
- We currently do not see any index changes for ASX 20 and ASX 100.
- We continue to expect one change for ASX 50. However, our expectations for ASX 200 have changed since our last insight (link).
International Games System (3293 TT): Positioning & Potential Passive Buying
- International Games System (3293 TT) could be added to a global index at the end of November and there will be a lot of buying in the stock.
- The big rally in the stock has led to International Games System (3293 TT) trading expensive to its regional peers.
- There has been an increase in cumulative excess volume over the last month. But there could still be more to go over the next week.
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