In today’s briefing:
- Fujitec (6406) Activism Levelling Up – A Board Spill to Come?
- Boss Zhipin (2076 HK | BZ US) HK Dual Primary Listing on 22 Dec – Index, Southbound, and SPECIAL
- Southbound Stock Connect Expansion: Potential Adds in 2023
- IPet Holdings (7339 JP) – Tender Offer Extended But No Biggie
- Straits Times Index Quiddity Leaderboard Mar 23: SMM Addition Could Cause SATS or KDCREIT Deletion
- Warrego (WGO AU): Strike Energy (STX AU) Strikes with a Revised Offer
- SARIA/Devro: Agreed Offer
- GoTo IPO Lockup Expiry Follow-Up – Has Corrected but Has Traded Relatively Little Volume
Fujitec (6406) Activism Levelling Up – A Board Spill to Come?
- Two years ago, I wrote about the history of activist attention on what was then the 8th largest elevator maker in the world Fujitec Co Ltd (6406 JP).
- In Activist Pressure FINALLY Works on Fujitec (6406)- Going Up? (Albeit Slowly) I discussed what were still nascent efforts by Oasis to trigger change at the top.
- On 30 November 2022, Oasis – which officially went above 5% only this past March but on 30 November reported 16.52% – called an EGM. It’s worth a look.
Boss Zhipin (2076 HK | BZ US) HK Dual Primary Listing on 22 Dec – Index, Southbound, and SPECIAL
- Kanzhun (BZ US) a.k.a. has been listed in the US since about the same time as DiDi Global (DIDI US), and it had similar but minor tech issues pre-listing.
- On Friday 16 December, the company announced it would conduct a Listing by Introduction in Hong Kong under the ticker Zhipin (2076 HK), listing on 22 Dec.
- That creates an interesting launch supply/demand dynamic, likely HS Tech inclusion in March 2023, and then Southbound much later in 2023.
Southbound Stock Connect Expansion: Potential Adds in 2023
- Last evening, the CSRC and the SFC agreed to further deepen mutual stock market access between the Mainland and Hong Kong and promote the development of both capital markets.
- For Southbound Stock Connect, eligible foreign companies primary-listed in Hong Kong will become eligible. That could mean 5 additions to Stock Connect.
- Additionally, Southbound access via Shanghai Stock Connect will be expanded to being it in alignment with Shenzhen Stock Connect. That could see 131 stocks added to Shanghai Stock Connect.
IPet Holdings (7339 JP) – Tender Offer Extended But No Biggie
- On 8 November, major Japanese life insurer Dai Ichi Life Insurance (8750 JP) announced it would buy out leading pet insurer ipet Holdings (7339 JP). Yes, you read that right.
- Japanese listed VC/PE firm and incubator Dream Incubator Inc (4310 JP) owns 55% and agreed to tender. Tender success is dependent on getting 66.7%.
- Today the buyer extended for 10 days because it had received approval under Article 271-22 Para 1 of the Insurance Business Act, triggering a requirement to refile/extend.
Straits Times Index Quiddity Leaderboard Mar 23: SMM Addition Could Cause SATS or KDCREIT Deletion
- In this insight, we take a look at the potential index changes for the FTSE Straits Times Index (STI) (STI INDEX) between now and the March 2023 index review.
- The Sembcorp Marine (SMM SP) – Keppel Corp (KEP SP) deal seems likely to complete in 1Q 2023.
- Below is a look at the potential index flow consequences of this deal and other potential index changes between now and the March 2023 Rebalance.
Warrego (WGO AU): Strike Energy (STX AU) Strikes with a Revised Offer
- Strike Energy (STX AU)’s revised off-market takeover is 1 STX share per Warrego Energy (WGO AU) share, a 29.0% premium to its previous offer and a 21.4% premium to Hancock’s offer.
- Hancock has the war chest to comfortably outbid STX. However, the smart move for Hancock is to be disciplined on price and instead bid for the combined STX/WGO post-completion.
- The Board’s view will be sent in Target’s statement to be despatched by 29 December. At the last close, the gross spread to STX’s offer is 6.3%.
SARIA/Devro: Agreed Offer
- Saria agreed to acquire Devro for 316.1p/share in cash, for an implied equity value of £540.8 million and an implied EV of £667 million. This represents 9.6x EV/Fwd EBITDA, 65% premium.
- The offer price seems fair: the multiple is close to Viscofan’s (market leader) and my fair value estimate is 305p (DCF based). A competing bid seems unlikely.
- After the shares went ex-dividend, gross spread is 2.7%, but the estimated annual return is 3.6% (assuming settlement by 30 September 2023), which means there should be better opportunities elsewhere.
GoTo IPO Lockup Expiry Follow-Up – Has Corrected but Has Traded Relatively Little Volume
- GoTo pre-IPO shareholders were released from the lockup on 1st Dec 2022, which led to a 47% slide in its share price.
- We had written about the upcoming lockup expiry in our earlier note, GoTo IPO Lockup Expiry – US$13bn Lockup Release or in Other Words, the Real IPO.
- While the price appears to be settling down now, given the intra-day trading limits in Indonesia, very little volumes have been transacted compared to the shares released from lockup.
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