In today’s briefing:
- Hong Kong To Scrap All “Spicy Measures” (Property Cooling Measures)
- Tsuruha (3391) And Welcia (3141) – Aeon Tsuruha Stake Buy Followed by Merger! [Redux]
- Confirmed: Conditions & Schedule of Block Deals Pre-Disclosure Rules in Korea
- Hong Kong: Stamp Duties Axed; Mortgage Rules Relaxed
- JAPAN ACTIVISM: Is Murakami-San Going To Do A PacMetals Rug Pull on Aozora? Or Is This For Real?
- Aozora Bank (8304 JP): Murakami Becomes a Substantial Shareholder
- APM Human Services (APM AU): CVC’s 141% Offer Premium
- BAT’s Possible US$2.5bn ITC Selldown – Will Be Well Flagged but Still Won’t Be an Easy One to Digest
- Aeon (8267 JP), Tsuruha (3391 JP) And Welcia (3141 JP)’s Long-Dated Plan
- Goodman Group (GMG AU): Positioned for Outperformance
Hong Kong To Scrap All “Spicy Measures” (Property Cooling Measures)
- RTHK just reporting that HK Finance Secretary Paul Chan has said in his budget speech that HK will remove all property cooling measures in place, with immediate effect.
- That would be That is Special Stamp Duty, Buyer’s Stamp Duty, New Residential Stamp Duty. “Measures no longer necessary given the current economic and market conditions.”
- This should cause people to get excited short-term about property developers.
Tsuruha (3391) And Welcia (3141) – Aeon Tsuruha Stake Buy Followed by Merger! [Redux]
- The first piece had a question mark in the title. This one has an exclamation point. The exclamation point has value for one investor. Other people? Not so much.
- Today post-close we got the deal. I was a little surprised it came this fast, but it’s now mostly done it appears – largely as predicted in the last piece.
- There are things one can probably read into the details. It is probably worth thinking about those, and how those details affect the industry.
Confirmed: Conditions & Schedule of Block Deals Pre-Disclosure Rules in Korea
- Insiders must disclose transaction details, complete deals within 30 days, limit deviations to 30%, and submit disclosures 30 days before transactions.
- Financial investors, including institutional ones, are exempt. This encompasses local pension funds (including NPS) and foreign financial investors. Deals under 1% of total shares and less than ₩5B are exempt.
- Confirmation of the timeline indicates many block deals before July. We should hunt potential deals for proactive setups. Also, we should monitor basis widening in futures due to short-selling ban.
Hong Kong: Stamp Duties Axed; Mortgage Rules Relaxed
- Hong Kong residential property prices declined 7% in 2023 and are down >20% from the 2021 peak in 2021. The average price of offices also declined ~7% in 2023.
- Scrapping property cooling measures, such as the special stamp duty applied to homes resold within 24 months, have been rumoured, to push up housing prices.
- In today’s annual budget, we got those. And then some.
JAPAN ACTIVISM: Is Murakami-San Going To Do A PacMetals Rug Pull on Aozora? Or Is This For Real?
- Yesterday after the close, well-known Japanese activist Murakami-san’s preferred entity City Index Eleventh filed a Large Shareholder Report.
- The blast across Bloomberg was “*AOZORA 5.4% STAKE REPORTED BY CITY INDEX ELEVENTH.” Sounds exciting after the shares dropped 34% in two days earlier this month after reporting big writedowns.
- But there has to be a question here. Why? And Why this way? And what kind of activism would be possible?
Aozora Bank (8304 JP): Murakami Becomes a Substantial Shareholder
- Murakami’s entity, City Index Eleventh, reported a 5.42% shareholding in Aozora Bank Ltd (8304 JP). Murakami started buying a day after the disastrous 3QFY23 results.
- Murakami’s average buy-in price is JPY2,137.88 per share, a 34% discount to the pre-3QFY23 results share price.
- Murakami’s disclosure suggests two possibilities: the start of an activist campaign or a short-term trading play replicating the Pacific Metals (5541 JP) playbook.
APM Human Services (APM AU): CVC’s 141% Offer Premium
- Back on the 19th Feb, employment and disability services play APM Human Services Internation (APM AU) rejected PE-outfit CVC Asia Pacific’s A$1.60 proposal, a 93% premium to undisturbed.
- Undeterred, CVC has returned with A$2.00/share indicative Offer, by way of a Scheme, a 141% premium to undisturbed; yet a 44% discount to APM’s November 2021 IPO price of A$3.55/share.
- APM has determined it will engage and provide CVC with a four-week period of exclusivity.
BAT’s Possible US$2.5bn ITC Selldown – Will Be Well Flagged but Still Won’t Be an Easy One to Digest
- Earlier this month, British American Tobacco (BATS LN)’s management stated that they were reviewing their stake in ITC Ltd (ITC IN) to enhance its balance sheet flexibility.
- BAT has owned its stake in ITC for over a century and remains its largest shareholder.
- In this note, we talk about the possible deal structure and dynamics.
Aeon (8267 JP), Tsuruha (3391 JP) And Welcia (3141 JP)’s Long-Dated Plan
- Aeon Co Ltd (8267 JP), Tsuruha Holdings (3391 JP) and Welcia Holdings (3141 JP) have announced an alliance to establish the largest drugstore alliance in Japan by December 2027.
- Aeon will carry out several Tsuruha transactions – buy Oasis 13.58% stake at JPY15,500 per share and, on receiving regulatory approval, reach 27.17% of the voting rights.
- The agreements involve merging Tsuruha and Welcia through a share exchange offer and Aeon subsequently increasing its Tsuruha voting rights from 27.17% to less than 51%.
Goodman Group (GMG AU): Positioned for Outperformance
- Goodman Group (GMG AU) has been moving higher recently and the stock has outperformed its peers handily over the last year.
- The stock trades marginally expensive compared to its peers and that could be partially attributed to the stock being a part of large indices.
- There is another index inclusion to come and that could lead to further outperformance in the short term.
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