In today’s briefing:
- Fuji Soft (9749) – KKR Launches Early to Stymy Bain Who Has a Founding Family Tailwind
- Quiddity Leaderboard S&P 500 Sep 24 Rebal (Final): 2 Changes Possible
- KOSPI Size Index Reshuffle Results Out Late Today: Early Positioning Delivered Big Gains
- Xingda Int’l (1899 HK): Another Partial?
- S&P MidCap 400 September 2024 Forecasts: Highest Score to the HOOD, CVNA, LPLA, ENTG, ENSG and MLI
- Pasco (9232 JP): Secom (9735 JP) And Itochu (8001 JP) Tender Offer a Done Deal
- Xingda (1899 HK): Management to Reload with a Partial Offer?
Fuji Soft (9749) – KKR Launches Early to Stymy Bain Who Has a Founding Family Tailwind
- KKR has launched its deal early to make life difficult for Bain, who has Founding Family support, due diligence, and another hearing with the company to make a Binding Bid.
- The combination of Bain’s PR on 3 September and the new documents out late last night from KKR and Fuji Soft show a picture of KKR/3D somehow acting coercively.
- This is something of a mess. It should become a case study for lawyers/advisors of what NOT to do when a large PE firm approaches you. Expect a bun fight.
Quiddity Leaderboard S&P 500 Sep 24 Rebal (Final): 2 Changes Possible
- The S&P 500 index tracks the 500 largest names listed in the US and it is one of the most highly-tracked indices in the world.
- The rankings used for the September 2024 index rebal event will be based on yesterday’s (4th September 2024) opening prices.
- In this insight, we take a final look at the potential ADDs and DELs leading the rankings for the upcoming review.
KOSPI Size Index Reshuffle Results Out Late Today: Early Positioning Delivered Big Gains
- For this September reshuffle, fewer factors affected price impact, so outlier chances were low. Biggest price moves typically occur 30 days before the effective date, especially during LARGE↔MID transitions.
- Early positioning for this reshuffle paid off. Past trends suggest price action fades before the effective date, so consider exiting positions by tomorrow or early next week.
- Small→Mid migrants historically show weak price impacts, with no clear correlation observed in this September reshuffle either. I’m avoiding those plays targeting the effective date for now.
Xingda Int’l (1899 HK): Another Partial?
- Back on the 7 Dec 2023, Xingda International (1899 HK) announced a partial Offer from a consortium comprising management at HK$1.88/share.
- The consortium, at the time, held 45%, with the objective to hold >50.01% at the close of the Offer. The final % was 50.42%.
- The consortium was then free to take their stake up to 75%. However the shareholder structure has materially changed in 2024. Xingda is suspended (again) pursuant to the Takeovers Code.
S&P MidCap 400 September 2024 Forecasts: Highest Score to the HOOD, CVNA, LPLA, ENTG, ENSG and MLI
- S&P MidCap 400 additions by transition require market cap, float cap, sector balance, liquidity and earnings as parameters for inclusion.
- The highest combined score from the parameters is given to CVNA, HOOD, LPLA and ENTG which makes them acceptable candidates for addition.
- Ensign Group (ENSG US) and Mueller Industries (MLI US) have the highest probability of being added out of the migrations. Market cap of migration candidates is estimated to be insufficient.
Pasco (9232 JP): Secom (9735 JP) And Itochu (8001 JP) Tender Offer a Done Deal
- Pasco Corp (9232 JP) has recommended a tender offer from Secom Co Ltd (9735 JP) and Itochu Corp (8001 JP) at JPY2,140, 31.4% premium to the undisturbed price of JPY1,629.
- The tender offer runs from 6 September to 22 October (30 business days), with payment commencing on 28 October. It represents a 10-year high.
- This a done deal as the offeror represents a 71.66% ownership ratio, higher than the two-thirds of voting rights required to implement a squeeze-out through share consolidation.
Xingda (1899 HK): Management to Reload with a Partial Offer?
- Xingda International (1899 HK) entered a trading halt pending the release of an announcement under the Hong Kong Code on Takeovers and Mergers.
- Significant changes in substantial shareholders have occurred since the previous partial offer closed on 10 March 2023, which could be the catalyst for an offer.
- Management is likely reloading a partial offer to exercise statutory control and bypass the 2% creeper rule. The partial offer price could be around HK$1.60-1.70 per share.
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