In today’s briefing:
- L’Occitane (973 HK): Share Alternative a Crucial Step Towards the Offer Being Declared Unconditional
- Exedy Corp (7278 JP): Murakami Becomes a Substantial Shareholder
- Hengdeli Holdings (3389 HK): Negative EV Play Halted
- Quiddity Leaderboard HSTECH Sep 24: No Changes but US$425mn One-Way Flows Due to Capping
- Quiddity Leaderboard HSCEI Sep 24: Two Changes Possible; US$256mn One-Way
- SET50 Index Rebalance: 4 Changes Next Week; One Could Surprise
- L’Occitane (973.HK) – The Privatization Is About to Succeed
- India Shelter Finance US$240m Lock-Up Expiry – Multi-Bagger Gains Are Ripe for the Taking
L’Occitane (973 HK): Share Alternative a Crucial Step Towards the Offer Being Declared Unconditional
- L’Occitane (973 HK) announced the share alternative at an exchange ratio of 10 rollover shares for each offer share, subject to a cap of 5% of outstanding shares.
- The share alternative option will help the offer and was likely required to get Pleasant Lake Partners’ support (3.25% of outstanding shares). There is minimal vocal opposition to the offer.
- Irrevocables/Letters of support represent 49.83% of disinterested shares. An attractive offer and the share alternative facilitate meeting the minimum acceptance condition, which requires an 80% disinterested acceptance rate (ex. irrevocables).
Exedy Corp (7278 JP): Murakami Becomes a Substantial Shareholder
- Murakami’s entity, City Index Eleventh, and daughter reported a 5.46% position in Exedy Corp (7278 JP). The shares purchases began two days after the Aisin (7259 JP) secondary offering.
- Murakami’s average buy-in price is JPY2,607.30 per share, 2.3% higher than the recent secondary offering price of JPY2,549.
- Murakami’s disclosure suggests two possibilities: the start of an activist campaign or a short-term pump-and-dump play. Recent precedents suggest the latter.
Hengdeli Holdings (3389 HK): Negative EV Play Halted
- Watch accessory play Hengdeli Holdings (3389 HK) is currently suspended pursuant to the Takeovers Code.
- Potentially founder Zhang Yuping (holding 17%), CEO Tony Cheung (16%) and/or Swatch Group (UHR SW) (9.94%) may table an Offer. My money is on Zhang.
- This is a very illiquid name. What is interesting is that Hengdeli has net cash of HK$1.3bn – as at 31 December 2023 – against a market cap of HK$0.59bn.
Quiddity Leaderboard HSTECH Sep 24: No Changes but US$425mn One-Way Flows Due to Capping
- The HSTECH Index tracks the performance of the top 30 technology companies listed in Hong Kong that have high business exposure to certain technology themes.
- In this insight, we take a look at the rankings of potential ADDs and potential DELs for the September 2024 index rebal event.
- We do not see any index changes in September 2024 but there could be one-way flows of US$425mn due to capping.
Quiddity Leaderboard HSCEI Sep 24: Two Changes Possible; US$256mn One-Way
- The HSCEI serves as a benchmark to reflect the overall performance of the top 50 “Mainland China” securities listed in Hong Kong.
- In this insight, we take a look at the potential index changes and the resultant capping flows for HSCEI index rebal event in September 2024.
- Based on the current data, I see two ADDs and two DELs.
SET50 Index Rebalance: 4 Changes Next Week; One Could Surprise
- There will be 4 changes for the Stock Exchange of Thailand SET 50 Index (SET50 INDEX) at the close on 28 June.
- All changes are in line with our forecasts, but one stock could be a surprise inclusion for some.
- Passive trackers will need to buy 3.9% of float in I-TAIL, 3.7% of float in Berli Jucker, 1.5% of float in Ngern TidLor and 1% of float in Bangchak Corporation.
L’Occitane (973.HK) – The Privatization Is About to Succeed
- So far, about 49.8% of disinterested shares from Irrevocable Undertakings/Non-binding Letters of Support would accept the Share Offer. Success is within reach based on a “good enough” privatization price.
- The Share Alternative is mainly aimed at investors who are hoping for the future re-listing of L’Occitane in the overseas markets – They can still get a vantage point.
- However, re-listing seems still distant/uncertain. The value of Rollover Shares in the future remains uncertain. Investors would face risks if they choose the Share Alternative. The Cash Alternative is preferred.
India Shelter Finance US$240m Lock-Up Expiry – Multi-Bagger Gains Are Ripe for the Taking
- India Shelter Finance (0570670D IN) listed in India on 20th Dec 2023 after raising US$144m. The pre-IPO investors had trimmed a portion of their stakes in the IPO
- India Shelter Finance (ISF) is a retail-focused HFC targeting the self-employed customer with a focus on first time home loan takers in the low and middle income group.
- Coming up for six-month lockup expiry on 18th Jun 2024 are the firm’s pre-IPO shareholders and a portion of the promoters’ stakes.
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