In today’s briefing:
- Fujitsu General (6755) – Fujitsu Wants Out, May Force the Issue
- IJTT (7315 JP): Risk/Reward as SPARX Bumps to JPY850
- EQD | The LONG Case for the Hang Seng Index
- Namyang Dairy Products: Long Legal Dispute to Be Finally Decided by Supreme Court in January 2024
- OreCorp: Silvercorp Switches To Off-Market Bid
- Quiddity Leaderboard ES50 Sep 24: Engie Close to US$1.2bn Index Flow
Fujitsu General (6755) – Fujitsu Wants Out, May Force the Issue
- In 2019, it became apparent Fujitsu Ltd (6702 JP) wanted to sell down its stakes in non-core businesses (Shinko Electric, Fujitsu General, and FDK), and move on to better things.
- In early January 2023, a Bloomberg article suggested a sale process. A 20 Jan 2023 article suggested Fujitsu General’s auction was imminent. I wrote a piece. It was not bullish.
- The stock rose a bit, then fell 40+% through last week. Now another article suggests some urgency at Fujitsu. That changes things.
IJTT (7315 JP): Risk/Reward as SPARX Bumps to JPY850
- IJTT Co., Ltd. (7315 JP) has recommended Sparx Group (8739 JP)’s revised tender offer of JPY850, 4.7% premium to its previous JPY812 offer. The revised offer has been declared final.
- The Isuzu Motors (7202 JP) share repurchase price has risen 4.0% from JPY677 to JPY704. The tender closes on 15 January 2024. All other terms are unchanged.
- The shares are trading above the revised terms. A final offer and no competing bidder points to an unfavourable risk/reward profile – a 21% downside on a deal break.
EQD | The LONG Case for the Hang Seng Index
- The HSI INDEX closed last week down (CC=-1) at 16340.41, it is now down 5 months in a row (CC=-5), very OVERSOLD.
- If this week the index keeps going down, it may find support soon and bounce next week. The alternative scenario is a longer correction, 2 weeks.
- Support for a LONG trade, possibly pushed by a MONTHLY reversal, should be found between 16200 and 15950: this is a highly speculative setup given the stubborn downtrend.
Namyang Dairy Products: Long Legal Dispute to Be Finally Decided by Supreme Court in January 2024
- The Korean Supreme Court’s ruling on the stock transfer lawsuit between Hahn & Company private equity fund and Namyang Dairy’s Chairman Hong Won-Sik is confirmed for 4 January 2024.
- The expectation of Hahn & Co winning this legal dispute has positively impacted the share price of Namyang Dairy Products.
- The higher probability scenario is for the Korean Supreme Court to rule in favor of Hahn & Co, agreeing with the decisions of the two lower courts in Korea.
OreCorp: Silvercorp Switches To Off-Market Bid
- On the 24 November, Silvercorp Metals (SVM CN) bumped its Scheme Offer for Orecorp Ltd (ORR AU) to A$0.19 in cash and 0.0967 new Silvercorp shares.
- At a 40.1% premium to undisturbed and key shareholder Tim Goyder (5.14%) supportive, this looked done. Then Perseus (PRU AU) built a 19.9% stake and said it would vote no.
- After postponing the Scheme meeting, Silvercorp and Orecorp have now agreed to an off-market takeover, on the same terms. The tendering threshold is 50.1%.
Quiddity Leaderboard ES50 Sep 24: Engie Close to US$1.2bn Index Flow
- The ES50 Index is one of the most highly-tracked indices in Europe and the annual index review takes place in September every year.
- This annual index review usually results in some of the most significant index flow events in Europe every year typically amounting to billions of dollars.
- In this insight, we take an early look the names leading the race to become ADDs/DELs for the upcoming index review in September 2024.
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