In today’s briefing:
- IJTT (7315 JP) – Truly Offensive Takeover Price Gets Bumped, Offensively
- Japan – Increasing Shorts on Some Interesting Stocks
- SBI To Buy Gumi (3903) Shares To Up Stake to Near 30% (And Try To Avoid Impairment)
- Meldia DC (1739 JP) – Open House Group Cleans Up Sanei Architecture Sub in TOB.
- ABB’s Offer For Symbio (SYM AU): 7th Feb Shareholder Vote
- IRC Limited (1029 HK): A Wide Spread as the Conditional Offer Opens
- Hollysys (HOLI US): Dazheng Ups the Ante with a US$29.00 Competing Offer
- EQD | KOSPI 200 Shows a Bullish Pattern for the Upcoming Pullback
IJTT (7315 JP) – Truly Offensive Takeover Price Gets Bumped, Offensively
- IJTT Co., Ltd. (7315 JP) was perhaps one of the lower-priced parent takeovers (Isuzu remains central to the bidder post-buyout) at 0.46x book. Today, the last day, it got bumped.
- The new price is ¥850/share vs ¥812/share. +4.7% and a whopping 0.48x book now. ¥850 is where the stock traded just before the announcement. It immediately jumped to ¥875/share.
- It appears Isuzu is not getting any more money out of this, but they should be OK. They are buying back in at 0.48x book. With leverage.
Japan – Increasing Shorts on Some Interesting Stocks
- There are a bunch of stocks that have underperformed the Nikkei 225 (NKY INDEX) and their peers and could be deleted from global passive portfolios early next year.
- The deletion from passive portfolios will lead to a liquidity event at the end of February where passive trackers will need to sell multiple days of ADV.
- Shorts have started to increase on some of the stocks and there will be further positioning as we near the liquidity event.
SBI To Buy Gumi (3903) Shares To Up Stake to Near 30% (And Try To Avoid Impairment)
- Today after the close, SBI Holdings (8473 JP) made an announcement it would buy (up to) 3.0mm shares of Gumi Inc (3903 JP) shares between tomorrow and end-March 2024.
- SBI already owns 8.8mm shares, and this would bring them close to 30.0%.
- SBI did not specifically say they would buy on market, but the next 400,000 shares would require a large shareholder filing amendment.
Meldia DC (1739 JP) – Open House Group Cleans Up Sanei Architecture Sub in TOB.
- Open House (3288 JP) took over Sanei Architecture Planning (3228 JP) this past autumn when banks forced the issue over the former CEO/owner’s mafia ties discovered in an investigation.
- Seedheiwa (1739 JP) now better known as Meldia DC, is ~60% held by Sanei Architecture Planning, and 3% by Mr Koike. It has debt. So it needs cleaning up too.
- This is too light for minorities, and even lighter for whole co, but it’s a done deal.
ABB’s Offer For Symbio (SYM AU): 7th Feb Shareholder Vote
- On the 1st November, cloud communication software outfit Symbio Holdings (SYM AU) backed Aussie Broadband Pty Ltd (ABB AU)‘s reduced cash/scrip Offer of A$2.99-$3.04/share, and entered into a Scheme agreement.
- Superloop Ltd (SLC AU), which had previously made two cash/scrip Offers for Symbio, promptly walked.
- Symbio’s Scheme Meeting has now been tabled for the 7 Feb, with implementation expected on the 28 February. The IE is supportive. This is done – and trading tight.
IRC Limited (1029 HK): A Wide Spread as the Conditional Offer Opens
- The Irc Ltd (1029 HK) IFA opines that a mandatory conditional offer from Nikolai Levitskii (Chairman and 30.61% shareholder) at HK$0.118 per share is fair and reasonable.
- The offer is open, with the first closing date of 12 January 2024. The offer is conditional on the offeror and concert parties representing more than 50% of voting rights.
- While the offer is light, satisfying the minimum acceptance condition is possible. The risk/reward profile is favourable as the upside (25.5% spread) outweighs the downside (5.3% to the undistributed price).
Hollysys (HOLI US): Dazheng Ups the Ante with a US$29.00 Competing Offer
- Dazheng (without Recco) has returned with a revised US$29.00 offer for Hollysys Automation Technologies (HOLI US), 9.4% higher than Ascendent Capital’s US$26.50 binding offer.
- While Dazheng’s proposal represents an all-time high, it would likely not be a superior proposal based on the Ascendent merger agreement due to the clauses on financing and due diligence.
- Nevertheless, to avoid the high risk that shareholders vote down the Ascendent offer and/or there are substantial dissenting shareholders, the Board will likely ask Ascendent to match Dazheng’s offer.
EQD | KOSPI 200 Shows a Bullish Pattern for the Upcoming Pullback
- The KOSPI 200 INDEX closed up 8 weeks in a row and breached the Inner Fence resistance target at 349, the index is now very OVERBOUGHT.
- The upcoming pullback could be an occasion to go LONG at better prices: based on pattern analysis there is a chance the correction may be a large one, albeit fast.
- Support levels to buy are in the 346-336 price area.
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