In today’s briefing:
- Hyundai Home Shopping (057050 KS)’s Partial Offer
- Best World (BEST SP): Not the Best Exit Offer
- Suruga Bank (8358 JP) – New Div, New Buyback, New KPIs, New 6yr High Price
- Great Eagle Seeks To Delist Langham Hospitality (1270 HK)
- Hanwha Group’s Restructuring to Positively Benefit Hanwha Corp but Negatively Impact Hanwha Ocean
- Selected European HoldCos and DLC: March’24 Report
Hyundai Home Shopping (057050 KS)’s Partial Offer
- Yesterday, the 3rd April, Hyundai G.F. Holdings (005440 KS) announced it would conduct a Tender Offer for 3mn shares, or 25% of Hyundai Home Shopping Network (057050 KS) (HHSN).
- A successful Tender would lift Holdings stake to 50% from 25% currently, satisfying the 30% holding company threshold introduced in 2022.
- Minimum proration is 33%. Shares popped 13.8% on the news. That looks a bit too aggressive.
Best World (BEST SP): Not the Best Exit Offer
- Best World International (BEST SP) has disclosed an exit offer through selective capital raising and delisting. The offer of S$2.50 is a 42.9% premium to the undisturbed price of S$1.75.
- The key conditions are approval for the selective capital reduction (at least 75% of eligible shareholders) and delisting resolution (a majority holding not less than 75% in value).
- The headcount test is a risk. The offer is light as only 66.7% of retained earnings will be distributed and the consideration will be covered 1.6x by the net cash.
Suruga Bank (8358 JP) – New Div, New Buyback, New KPIs, New 6yr High Price
- 10+ Months ago, Suruga Bank Ltd (8358 JP) announced it would sell a large chunk of its treasury shares to Credit Saison and would then buy back ¥22bn of stock.
- I liked the odds in Suruga Bank (8358) To Sell, Then Buy Back 17% of the Bank, but HOW Is Key. They spent the ¥22bn. The stock rose a lot.
- Today, we get a div hike for H2 (implying a div hike for this year too), another buyback, a huge share cancellation, and new KPIs. As always, details matter.
Great Eagle Seeks To Delist Langham Hospitality (1270 HK)
- Hong Kong hotel-play Langham Hospitality (1270 HK) was spun-off from Great Eagle (41 HK) on the 30 May 2013. Now GE intends to take the company back into the fold.
- Covid was devastating to the hospitality sector. As were the 2019 demonstrations. Langham’s share price never recovered, and is currently trading at a lifetime low and a P/B of 0.21x.
- No price was mentioned in the announcement. Expect a healthy premium to undisturbed, should a firm Offer unfold. But I wouldn’t expect a knockout price.
Hanwha Group’s Restructuring to Positively Benefit Hanwha Corp but Negatively Impact Hanwha Ocean
- We believe the new restructuring plan of the Hanwha Group is likely to have a positive impact on Hanwha Corp but could negatively impact Hanwha Ocean.
- Our NAV analysis of Hanwha Corp suggests NAV of 3.2 trillion won or NAV per share of 43,168 won, which is 50% higher than current share price.
- The biggest component of the valuation is Hanwha Corp’s 34% stake in Hanwha Aerospace which is worth 4.1 trillion won. (187% of Hanwha Corp’s market cap).
Selected European HoldCos and DLC: March’24 Report
- The Discounts to NAV of covered holdcos mainly widened during March. Discounts to NAV: C.F.Alba, 47.3% (vs. 47.1%); GBL, 38.15 (vs. 37.7%); Heineken Holding, 16.7% (vs. 16.5%);
- Industrivärden C, 1.4% (vs. 4.4%); Investor B, 6.1% (vs. 5.6%); Porsche Automobile Holding, 45.4% (vs. 43.7%). Rio DLC spread tightened to 24.9% (vs. 25.6%), and on 26 March reached 27.7%.
- What seems interesting: listed assets vs. Industrivärden C and the Rio DLC (long RIO LN/short RIO AU).
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