In today’s briefing:
- JR West (9021 JP) – Shareholder Structure Means Large-Ish Buyback Could Have Impact
- Selected European HoldCos and DLC: April’24 Report
- AZ-Com Maruwa Launches Hostile TOB on Chilled & Frozen Logistics (9099) – Expect More Fun To Come
- Chilled & Frozen Logistics (9099 JP): AZ-COM Maruwa Calls the Board’s Bluff, Launches the Offer
- KOSDAQ150 Index Rebalance Preview: 15 Changes Possible as Review Period Ends
- KOSPI200 Index Rebalance Preview: 5-6 Changes Possible from Now to June
- The Bigger Picture As Aussie Government “Approves’ Hanwha Ocean’s Austal Bid
JR West (9021 JP) – Shareholder Structure Means Large-Ish Buyback Could Have Impact
- Yesterday, West Japan Railway Co (9021 JP) announced FY23 earnings, a higher dividend, an update to the Medium-Term Management Plan (p10~), and a Buyback.
- Short & Sweet: Revenues were +17.2%yoy, OP +114.1%, NP +1.6%. OPM was 11.0% and ROE 9.2% (both best since FY18). Guidance is Revenue up, OP down, NP tiny up.
- The new FY25 (Mar26) OP guide in the MTMP is the old Mar28 target (mostly inbound tourism-driven). The Buyback is biggish. It is worth looking at the details.
Selected European HoldCos and DLC: April’24 Report
- The Discounts to NAV of covered holdcos mainly widened during April. Discounts to NAV: C.F.Alba, 49.1% (vs. 47.3%); GBL, 39% (vs. 38.1%); Heineken Holding, 17.3% (vs 16.7%);
- Industrivärden C, 4.7% (vs. 1.4%); Investor B, 8.3% (vs. 6.1%); Porsche Automobile Holding, 41.1% (vs. 45.4%). Rio DLC spread tightened to 22.5% (vs. to 24.9%).
- What seems interesting: Porsche SE vs. listed assets and the Rio DLC (long RIO LN/short RIO AU).
AZ-Com Maruwa Launches Hostile TOB on Chilled & Frozen Logistics (9099) – Expect More Fun To Come
- Chilled & Frozen Logistics Holdings (9099 JP) had been sending out questions, and trying to get AZ-Com Maruwa Holdings (9090 JP) to delay the start until at least late-May.
- AZ-Com Maruwa answered questions (first and second set) and on the 24th, C&F asked AZ-Com to extend. They did not extend. AZ-Com announced the Tender Offer at ¥3,000 today.
- C&F responded today saying the TOB is launched without C&F Board approval. Then they said some other things that might be disclosed when C&F’s Board presents its Target Opinion.
Chilled & Frozen Logistics (9099 JP): AZ-COM Maruwa Calls the Board’s Bluff, Launches the Offer
- AZ-Com Maruwa Holdings (9090 JP) has satisfied the precondition for its hostile Chilled & Frozen Logistics Holdings (9099 JP) JPY3,000 offer. The offer closes on 17 June (31 business days).
- AZ-COM Maruwa has called the Board’s bluff by providing sufficient time (extending the offer period from 20 to 31 business days) for a white knight to lob a competing bidder.
- While a bump is probable, the shares already factor in a significant bumpitrage premium. A potential bump has a good chance of being lower than the last close.
KOSDAQ150 Index Rebalance Preview: 15 Changes Possible as Review Period Ends
- With the review period complete, there could be up to 15 changes for the KOSDAQ 150 Index (KOSDQ150 INDEX) at the June rebalance.
- Even with 15 changes, there is some sector balance among the potential adds and deletes with big churn in the Information Technology sector.
- The potential adds have outperformed the potential deletes and the KOSDAQ 150 Index (KOSDQ150 INDEX) since the start of the review period but performance has flattened over the last month.
KOSPI200 Index Rebalance Preview: 5-6 Changes Possible from Now to June
- With the review period complete, there could be up to 5 changes for the Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) at the June rebalance.
- Hahn&Co now own over 96% of the shares in Ssangyong Cement Industrial (003410 KS) and there could be another change at or before the June rebalance.
- Passive trackers will need to trade between 0.5-15x ADV on the index changes. There are big shorts in L&F (066970 KS) and Lotte Tour Development Co, Ltd. (032350 KS).
The Bigger Picture As Aussie Government “Approves’ Hanwha Ocean’s Austal Bid
- Recently, I surmised FIRB would approve Sociedad Quimica y Minera (SQM US)/Hancock’s bid for Azure (AZS AU); but ding Hanwha Ocean (042660 KS)‘s Austal (ASB AU) tilt. I’m batting 50%.
- Whereas FIRB gave the green light for Azure this week; reportedly (no official ASX announcement as yet), the Aussie government is “not concerned” with Hanwha’s acquisition. Austal gained 3% yesterday.
- Even Austal didn’t high hopes of securing Aussie approval. Presumably the US government is similarly onboard. This development also signals an expanding AUKUS security pact.
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