In today’s briefing:
- Hanwha Ocean: Big Shares Dilution from Rights Offering of 2 Trillion Won
- StubWorld: Intouch “Cheap” As Thaksin Returns
- UMW Holdings (UMWH MK): Sime Darby’s Pre-Conditional MGO
- Quiddity Leaderboard SE600 Sep 23: 6 ADDs/DELs As Things Stand; More Possible
- ARM Holdings Pre-IPO – Pre-Privatisation to Pre-Listing Changes – Slower Growth, Lower Margins
- Boustead Plantations (BPLANT MK): Pre-Conditional MGO at RM1.55
- Sime Darby/UMW: It’s All About Scale
- Liberty/Telenet: Re-Opening of Tender Offer
Hanwha Ocean: Big Shares Dilution from Rights Offering of 2 Trillion Won
- After the market close on 23 August, Hanwha Ocean (042660 KS) confirmed that it will conduct a massive rights offering of 2 trillion won.
- The expected rights offering price is 22,350 won, which is 36% discount to current price.
- We believe this rights offering is likely to dilute the existing shareholders and negatively impact Hanwha Ocean’s share price.
StubWorld: Intouch “Cheap” As Thaksin Returns
- Intouch Holdings (INTUCH TB) plumbs new 12-month lows for its implied stub, and NAV discount as the former PM returns from exile.
- Preceding my comments on Intouch are the current setup/unwind tables for Asia-Pacific Holdcos.
- These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.
UMW Holdings (UMWH MK): Sime Darby’s Pre-Conditional MGO
- Sime Darby (SIME MK) entered a conditional sale and purchase agreement (SPA) to acquire PNB’s 61.18% stake in UMW Holdings (UMWH MK) for RM5.00 per share.
- Once the SPA becomes unconditional, Sime Darby must launch an MGO for the remaining UMW shares at RM5.00 per share, an 8.2% premium to the last close.
- The SPA is conditional on Sime Darby’s shareholder approval. The SPA and MGO are targeted to be completed in 4Q23 and 1Q24, respectively.
Quiddity Leaderboard SE600 Sep 23: 6 ADDs/DELs As Things Stand; More Possible
- In this insight, we take a look at the names leading the race to become ADDs/DELETEs for the SE600 and EURSTX Indices for the September 2023 Rebalance.
- I currently expect 6 ADDs and 6 DELETEs for the SE600 index in the September 2023 rebalance but these rankings could change prior to the base date.
- After the September 2023 rebalance, SimCorp A/S (SIM DC) could get deleted from the SE600 index and trigger an intra-review index change.
ARM Holdings Pre-IPO – Pre-Privatisation to Pre-Listing Changes – Slower Growth, Lower Margins
- Softbank Group (9984 JP) aims to raise around US$8-10bn via selling some of its stake in ARM Holdings’ US IPO.
- ARM develops and licences high-performance, low-cost, and energy-efficient CPU products and related technology, which is used by semiconductor companies and OEMs to develop their own products.
- In this note, we compare its recent performance versus its performance prior to its privatisation and discuss the changes since then.
Boustead Plantations (BPLANT MK): Pre-Conditional MGO at RM1.55
- Kuala Lumpur Kepong (KLK MK) will acquire 33.00% of Boustead Plantations (BPLANT MK)‘s outstanding shares from Boustead Holdings/BHB at RM1.55 per share. The purchase is conditional on BHB shareholder approval.
- Once the purchase becomes unconditional, the joint offerors (KLK, BHB, LTAT) will be required to launch an MGO at RM1.55 per share, a 13.1% premium to the last close.
- The MGO will have no minimum acceptance condition. The offer is attractive and represents an all-time high. The MGO is expected to be complete in 4Q23.
Sime Darby/UMW: It’s All About Scale
- In one of the largest M&A transactions in Malaysia, Sime Darby (SIME MK) intends to acquire a 61.2% stake in UMW Holdings (UMWH MK) from Permodalan Nasional Bhd for RM3.57bn.
- Sime Darby is paying RM5/share, a token 9.9% premium to last close, but more like 25% when factoring in apparent news leakage.
- Once the stake sale is completed, Sime Darby will launch an unconditional MGO for all remaining shares not held. This transaction is expected to be wrapped up in early 2024.
Liberty/Telenet: Re-Opening of Tender Offer
- Liberty has waived the 95% threshold condition. Liberty has now mandatorily opened again the tender given it owns more than 90% (93.43%), on same terms until 13 September (settlement 27 September).
- At 5.9x EV/Fwd EBITDA (vs. 5.4x EV/20e EBITDA for Orange Belgium minorities), the offer is relatively cheap, but also reflects the uncertainties surrounding Citymesh’s entrance and risk of market share losses.
- Spread is positive. After the second acceptance period closes, I believe the delisting is extremely likely. With limited liquidity and floor dividend no longer guaranteed, recommendation is accept the offer.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
