In today’s briefing:
- JSR (4185) – Deal Approval Unexpectedly Delayed, As Expected
- Pan Ocean Considering on a Rights Offering Capital Raise of Nearly 3 Trillion Won for the HMM Deal
- Gina Joins SQM In Bid For Azure (AZS AU)
- SET50 Index Rebalance: KCE Replaces TIDLOR
- Azure Minerals (AZS AU): SQM/Hancock Team up for a New Offer
- Kurabo (3106) – Bigly Buyback And Share Cancellation for A Valueful Value Trap With Hidden Value
- Quiddity Leaderboard NIFTY Mar 24: Bharat Electronics Trade Successful; Change Hedge and Let It Run
- Lithium Power (LPI AU): Scheme Vote on 23 January
- StubWorld: Hankook’s Bothersome Brothers
- AMFI Stock Reclassification Preview (Dec 2023): MidCap to LargeCap Migrations Outperforming
JSR (4185) – Deal Approval Unexpectedly Delayed, As Expected
- Today after the close, JSR Corp (4185 JP) announced that the expected “end-December” commencement of JIC’s Tender Offer to take the company private would be delayed.
- This was somewhat expected to widely expected based on initial FUD which then gave way to “specialised reporting” a couple of weeks ago which indicated as much.
- Here I look at potential implications, spreads, and risks. And it still looks like one has to let it run (and buy a dip).
Pan Ocean Considering on a Rights Offering Capital Raise of Nearly 3 Trillion Won for the HMM Deal
- A consortium led by the Harim Group and JKL Partners has been chosen as the preferred bidder to acquire a 57.9% stake in HMM.
- Korea Development Bank (KDB) and the Korea Ocean Business Corporation (KOBC) are the main creditors of HMM, which is the largest shipping company in Korea.
- Pan Ocean is expected to complete a rights offering of nearly 3 trillion won which is 136% of its current market cap. This is excessive and negative for Pan Ocean.
Gina Joins SQM In Bid For Azure (AZS AU)
- This makes life a lot simpler. Gina Rinehart’s Hancock Prospecting will now team up with Chile’s SQM to take control of lithium play Azure Minerals (AZS AU).
- In a binding Offer, by way of a Scheme, the joint bidders (collectively holding ~37.79%) are offering A$3.70/share, a 5.1% bump in terms to SQM’s prior Scheme Offer.
- An off-market takeover at A$3.65/share unfolds IF this Scheme were to fail. If both fail/lapse, SQM will, “in certain circumstances”, be required to proceed with its off-market transaction of A$3.50/share.
SET50 Index Rebalance: KCE Replaces TIDLOR
- KCE Electronics PCL (KCE TB) will replace Ngern Tid Lor (TIDLOR TB) in the Stock Exchange of Thailand SET 50 Index (SET50 INDEX) at the close on 29 December.
- Estimated one-way turnover is 0.55% and will result in a one-way trade of THB 455m. There is nearly zero funding flow on the other index members.
- Passive trackers will need to buy close to 1.2% of KCE Electronics PCL (KCE TB)‘s free float while selling around 1.6% of float in Ngern Tid Lor (TIDLOR TB).
Azure Minerals (AZS AU): SQM/Hancock Team up for a New Offer
- Azure Minerals (AZS AU) has entered a new transaction implementation deed with Sociedad Quimica y Minera de Chile (SQM US) and Hancock at A$3.70, a 51.6% premium to the undisturbed price.
- The emergence of Hancock and Mineral Resources (MIN AU) as substantial shareholders necessitated the new offer. The off-market takeover offer is A$3.65 per share if the scheme fails.
- The scheme’s completion hinges on MinRes’ acceptance. MinRes could potentially block the scheme but has a history of selling into Hancock offers.
Kurabo (3106) – Bigly Buyback And Share Cancellation for A Valueful Value Trap With Hidden Value
- Kurabo announced a bigly buyback on Tuesday. At last price it is equivalent to 8+% of shares out. Most likely to target buybacks from cross-holders.
- The company is not cash-rich, but it is financial asset and real estate-rich. And it trades at cheap multiples without even thinking about those assets (themselves worth the market cap).
- The TSE’s “PBR1 OR BUST” movement combined with starting low valuation, high payout, excess assets, mean this value trap has room to move.
Quiddity Leaderboard NIFTY Mar 24: Bharat Electronics Trade Successful; Change Hedge and Let It Run
- 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 for the NIFTY 50 and NIFTY Next 50 indices in the March 2024 rebalance.
- There could be multiple changes for NIFTY 50 and separately, there could be five changes for NIFTY Next 50. The NIFTY 50 changes could have high impact.
Lithium Power (LPI AU): Scheme Vote on 23 January
- The Lithium Power International (LPI AU) IE considers Codelco’s A$0.57 offer fair and reasonable as it is above the midpoint of its A$0.30-0.68 per share valuation range.
- The scheme is conditional on FIRB approval, which should be forthcoming as LPI’s assets are outside Australia in Chile.
- Irrevocables represent 32.05% of outstanding shares. At the last close and for the 16 February payment, the gross/annualised spread was 3.6%/26.3%.
StubWorld: Hankook’s Bothersome Brothers
- The Cho brothers are currently sparring over control of Hankook & Company (000240 KS), and in turn, its 30.7% stake in Hankook Tire (161390 KS).
- After the honorary chairman of Hankook backed the younger son (& chairman of Hankook), PE-outfit MBK, aligned with the elder son, bumped its public tender Offer by 20% to ₩24,000/share.
- Hankook is currently trading 27.3% adrift of the revised terms. That pretty much sums up the situation. The public tender closes on December 25. However, December 23-25 are holidays.
AMFI Stock Reclassification Preview (Dec 2023): MidCap to LargeCap Migrations Outperforming
- We see 8 stocks moving from MidCap to LargeCap, 8 stocks moving from LargeCap to MidCap, 11 stocks from SmallCap to MidCap, and 14 stocks from MidCap to SmallCap.
- Some stocks were added to global indices last month while some could be added in February. There are potential index implications for the NIFTY Index and Nifty Next 50 Index too.
- The upward migrations have continued to outperform the downward migrations. The largest recent outperformance has come from stocks expected to move from the Mid Cap to the Large Cap segment.
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