In today’s briefing:
- Kokusai Electric (6525 JP): Placement, Buyback & Index Flows
- Second Chance Properties (SCE SP): MSM Makes A Move
- Hang Seng Internet & IT Index (HSIII) Rebalance Preview: Three Adds/Deletes & Capping Changes
- HKTV (1137 HK): HK$2.15 Share Buyback Is Unconditional
- Shinsung Tongsang (005390 KS)’s Cheeky Delisting Offer
- Second Chance Properties (SCE SP): Voluntary Unconditional Offer at S$0.30
- Puig Brands Joins the IBEX35
Kokusai Electric (6525 JP): Placement, Buyback & Index Flows
- KKR and KSP Kokusai will offer 52.51m-60.38m shares (US$1.76bn-2bn) of Kokusai Electric (6525 JP) in a secondary offering that will likely be priced on 22 July.
- Kokusai Electric (6525 JP) will also buy back up to JPY 18bn of its shares. At the last close, that is 3.33m shares (1.2x ADV).
- Trackers of one global index will buy stock at the time of settlement of the shares. The (much) bigger buying will come at the end of August.
Second Chance Properties (SCE SP): MSM Makes A Move
- Founder/CEO Mohamed Salleh Maricar (MSM) and his family have made a voluntary unconditional general Offer for the 14.94% in gold/jewellery retailer Second Chance Properties (SCE SP) (“SCP”) not held.
- The S$0.30/share cash Offer is a 39.5% premium to last close. The Offer price is final.
- The Offer is unconditional in all respects. This will trade tight. A delisting Offer is next on the cards.
Hang Seng Internet & IT Index (HSIII) Rebalance Preview: Three Adds/Deletes & Capping Changes
- The review cutoff date for the September rebalance of the HSIII was 28 June. The changes will be announced on 16 August and become effective after the close 6 September.
- There could be 3 changes to the index with some inclusions driven by potential addition to the Hang Seng Composite Index. That could lead to buying via Southbound Stock Connect.
- Capping will result in passives buying Kuaishou Technology (1024 HK) and JD.com (9618 HK) while selling Meituan (3690 HK) and Tencent (700 HK).
HKTV (1137 HK): HK$2.15 Share Buyback Is Unconditional
- The Hong Kong Television Network (1137 HK) vote on the share buyback for a maximum of 100.0m or 11.25% of outstanding shares at HK$2.15 was comfortably passed at the EGM.
- The partial offer is designed to help the co-founders bypass the creeper rule and increase their grip on the shares. There is no minimum acceptance condition.
- While the IFA opines the offer is fair and reasonable, it is unattractive. A 100% minority participation rate implies a minimum proration of 20.74%. The offer closes on 23 July.
Shinsung Tongsang (005390 KS)’s Cheeky Delisting Offer
- Last month, apparel play Shinsung Tongsang (005390 KS) announced a Tender Offer from Canaan Co for 22.02% of shares out, at ₩2,300/share, a 15.84% premium to undisturbed.
- Canaan Co. and related parties hold a combined stake of 77.68%, which increases to 99.7% IF the Offer is successful. Canaan needs 95% to force delisting.
- Shinsung’s share price has languished over the past 12 months or so, despite improving market share and earnings. Getting to 95% might be a stretch. In need of a bump?
Second Chance Properties (SCE SP): Voluntary Unconditional Offer at S$0.30
- Second Chance Properties (SCE SP) has disclosed a voluntary unconditional offer from Mohamed Salleh’s family at S$0.30 per share, a 39.5% premium to the undisturbed price (10 July).
- The offer document will be despatched by 31 July. The offeree circular will be despatched by 7 August at the earliest, implying the earliest close of 28 August.
- The offer price has been declared final and is attractive as it represents an all-time high. The offeror will likely achieve the 90% compulsory acquisition threshold.
Puig Brands Joins the IBEX35
- The Technical Advisory Committee (CAT) in an extraordinary meeting adds Puig Brands (PUIG SM) to the IBEX 35 index and removes Melia Hotels International Sa (MEL SM).
- Although Puig Brands has only been publicly traded since 3 May, its market value exceeds €14.5 billion and its trading volume makes it deserving of a spot in the IBEX.
- Puig Brands is expected to see at least a 50% increase in trading volume by July 22, potentially adding four to eight additional days of trading volume.
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