In today’s briefing:
- Helios Techno Holding (6927) TOB – Today Could Be The Day
- Tatsuta Electric (5809 JP) Crunch Time = Bump Time?
- Tatsuta Electric (5809 JP): Eneos Finally Secures SAMR Approval but Needs to Bump
- A8 New Media (800 HK): A Scheme with a 162% Takeover Premium
- Proposed Merger Between Rebellions and Sapeon – To Challenge Nvidia
- Quiddity Leaderboard NIFTY Sep 24: Multiple Changes Possible for NIFTY 50; Some New Trade Ideas
- Changes in Law for Allocation of Treasury Shares as New Shares Post Spin-Offs in Korea in 2H 2024
- NIFTY NEXT50 Index Rebalance Preview: Active Meets Passive
- A8 Media (800 HK): A 163% Premium to Undisturbed? Yes Please.
Helios Techno Holding (6927) TOB – Today Could Be The Day
- Rs Technologies (3445 JP) announced a TOB on Helios Techno Holding (6927 JP) 12 days ago. At a 74% premium, but that was too cheap. I discussed it here.
- Shares went limit up for two days then traded huge volume the first full day last Wednesday. The lowest trade so far in open trading is 3% through terms.
- 57% of Shares Out Ex-Treasury have traded in five days. Anyone who bought 5% on Day 1 has to file a Large Shareholder Report today.
Tatsuta Electric (5809 JP) Crunch Time = Bump Time?
- ENEOS Holdings (5020 JP) announced a deal to buy out their affiliate Tatsuta Electric Wire & Cable (5809 JP) 18 months ago. The TOB was expected to start June 2023.
- June 2023 came around and China’s SAMR still hadn’t approved. ENEOS provided quarterly updates in Sep and Dec and monthly updates since. The May update was different.
- The May update cut the “re-update” schedule to mid-month June. There are reasons to look at what has changed since the Dec 2022 announcement.
Tatsuta Electric (5809 JP): Eneos Finally Secures SAMR Approval but Needs to Bump
- 18 months after announcing the offer, ENEOS Holdings (5020 JP) secured SAMR approval for the Tatsuta Electric Wire & Cable (5809 JP) tender offer at JPY720 per share.
- The tender offer is expected to be launched on 21 June, subject to securing the recommendation from the special committee and the Board.
- A bump is required due to the material market rerating since 21 December 2022. An offer of JPY828, a 15.1% premium to the current offer, implies a P/B of 1x.
A8 New Media (800 HK): A Scheme with a 162% Takeover Premium
- A8 New Media (800 HK) disclosed a Cayman scheme privatisation offer from Mr Liu Xiaosong (Founder, Chairman, CEO) at HK$0.36 per share, a 162.8% premium to the last close price.
- The massive premium is unsurprising, as A8’s EV has been negative since April 2023 due to headwinds from the weak Chinese leasing sector and uncertainty about cash use.
- The high takeover premium, no shareholder holding a blocking stake, and low AGM minority participation rate point to a done deal. However, this is a small-cap illiquid stock.
Proposed Merger Between Rebellions and Sapeon – To Challenge Nvidia
- On 12 June, SK Telecom (017670 KS) confirmed that its affiliate Sapeon plans to merge with its competitor Rebellions by end of this year.
- Sapeon and Rebellions’ largest global competitor is Nvidia. A key aim of the merger is to challenge Nvidia and try to take away its global dominance in AI chips.
- If the combined Sapeon and Rebellion can take away just 1% market share resulting in 1% of Nvidia’s market cap, this would suggest valuation of US$31 billion.
Quiddity Leaderboard NIFTY Sep 24: Multiple Changes Possible for NIFTY 50; Some New Trade Ideas
- NIFTY 50 represents the 50 largest stocks listed in the National Stock Exchange (NSE) of India and the NIFTY Next 50 index tracks the next 50 largest names.
- In this insight, we take a look at the names leading the race to become ADDs/DELs during the September 2024 index rebal event.
- Since my last insight, we have observed a couple of important changes to candidate rankings and that has resulted in some changes to our index change expectations.
Changes in Law for Allocation of Treasury Shares as New Shares Post Spin-Offs in Korea in 2H 2024
- On 11 June, the FSC announced that the restrictions on allocation of treasury shares as new shares post spin-offs is expected to be made into law in 2H 2024.
- Meanwhile, starting 1 July, the financial regulators will make it more difficult for Korean companies to conduct spin-offs that have separate allocation of treasury shares as new shares.
- The top five stocks with highest percentage of treasury shares/outstanding shares are up on average 40.5% YTD.
NIFTY NEXT50 Index Rebalance Preview: Active Meets Passive
- With a substantial part of the review period complete, there could potentially be 7 changes for the NSE Nifty Next 50 Index (NIFTYJR INDEX) in September.
- Estimated one-way turnover is 17.7% resulting in a one-way trade of INR 47.2bn (US$566m). 8 stocks will have over 1x ADV to trade from passive trackers.
- There are a bunch of stocks that are potential migrations between Mid Cap and Large Cap segments in the AMFI Classification system and there will be flows from active managers.
A8 Media (800 HK): A 163% Premium to Undisturbed? Yes Please.
- Following a suspension on the 28th May, property rental play A8 New Media (800 HK) has now announced an Offer by way of a Scheme from chairman/founder/major shareholder Liu Xiaosong.
- The Cancellation price is $0.36, a whopping 162.77% to last close. The price is final.
- This is a done deal. But A8 is an illiquid micro cap.
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