In today’s briefing:
- Meituan (3690 HK) Distro – Prosus Shares Hit CCASS. What We Know And What We Don’t Know
- Toyo Construction (1890) Tries a Different Tactic – FEFTA!
- Korea FSC Officially Eases a Major Hurdle for a Tender Offer: Names to Watch
- AAG Energy (2686 HK): Pre-Cons Done. Still A Rubbish Offer
- Golden Energy: Dian Swastatika Goes To Vote. Nothing To See Here
- KT Corp (030200 KS): Foreign Room Increase Could Mean MSCI Inclusion
- Liontown (LTR AU) Rejects Albemarle’s Advances
- Japan Real Estate Investment (8952 JP) : Offering Could Be a Catalyst for Outperformance Vs Peers
- Additional Potential Inclusions in KOSPI 200 Rebalance in May 2023
- Liontown Resources (LTR AU): A Bump to Albermale’s A$2.50 Offer Is Justifiable
Meituan (3690 HK) Distro – Prosus Shares Hit CCASS. What We Know And What We Don’t Know
- Meituan (3690 HK) shares hit accounts on Friday, they showed up in the CCASS data. All but about 2.3mm shares worth. Another 248.8mm shares showed up on Monday.
- That was the Prosus stake, which was expected as of November 2022 (evidently, they did not convert more Tencent shares in the interim.
- The data tells us some things. It does not tell us much else. Be careful of the details.
Toyo Construction (1890) Tries a Different Tactic – FEFTA!
- This morning, Reuters is reporting that Toyo Construction (1890 JP) has asked the Japanese government to investigate alleged breaches of the Foreign Exchange and Foreign Trade Act by YFO.
- Why? The Very Japanese family office of Nintendo’s founding family used Cayman entities to purchase Toyo shares and Toyo was re-labeled as having businesses in “Core Sectors” in October 2021.
- Toyo has also repeated its complaint about changed “intentions” on large shareholder filings. That bit of the complaint is 10 months old. A closer look at the details within.
Korea FSC Officially Eases a Major Hurdle for a Tender Offer: Names to Watch
- Korea FSC will accept financial institutions’ LOC and LPs’ investment performance agreements as certifying documents for securing funds. This revision will be effective right from April 1 this year.
- The impact from a preemptive trading perspective is likely to be significant. Additional stake purchases through tender offers will increase more aggressively, particularly when purchasing shares from the majority shareholder.
- We should first pay attention to companies where private equity (PE) is the largest shareholder whose stake is relatively low (less than 50%): Hugel, Hana Tour Service, & Hanssem
AAG Energy (2686 HK): Pre-Cons Done. Still A Rubbish Offer
- Back on the 17 February, AAG Energy Holdings (2686 HK) announced an underwhelming Offer of HK$1.85/share (declared final) by way of a Scheme from major shareholder Xinjiang Xintai (603393 CH).
- Yesterday, Xinjiang Xintai shareholders approved the proposal. This was expected – it’s a total bargain.
- AAG shareholders will likely get to vote on the Scheme in early May. They should vote it down.
Golden Energy: Dian Swastatika Goes To Vote. Nothing To See Here
- Dian Swastatika (DSSA IJ) shareholders will vote on the in-specie distribution of Golden Energy Mines and the exit offer of Golden Energy & Resources (GER SP) on the 2 May.
- This requires a simple majority vote, and the Widjaja family-controlled PT Sinar Mas Tunggal holds 59.9% in DSSA. This is rubber-stamped.
- For what it’s worth, DSSA’s “independent advisors” concluded the Offer is fair. To the Widjaja family as majority owners, it most certainly is. To the DSSA minority shareholders… 👀
KT Corp (030200 KS): Foreign Room Increase Could Mean MSCI Inclusion
- KT Corp (030200 KS) missed out on inclusion to the MSCI Korea Index at the May 2022 SAIR following a drop in foreign room below 15%.
- Bottoming out at 6.5%, foreign room has started to increase again. The last data point shows foreign room at 14.43%, just shy of the 15% threshold for inclusion eligibility.
- If foreign room increases above 15% in the next three weeks, KT Corp (030200 KS) will be added to the MSCI Korea Index at the May QCIR.
Liontown (LTR AU) Rejects Albemarle’s Advances
- Lithium play Liontown Resources (LTR AU) has now thrice rejected Albemarle Corp (ALB US)‘s proposals.
- Liontown has labeled Albermarle’s third bid of A$2.50/share as opportunistic.
- Albemarle has picked up 2.2% in Liontown. But that is dwarfed by Tim Goyder’s (chairman)’s 15% stake, who is not engaged at the current bid price.
Japan Real Estate Investment (8952 JP) : Offering Could Be a Catalyst for Outperformance Vs Peers
- Today after market close, one of Japan’s largest office JREITs Japan Real Estate Investment (8952 JP) announced a US$150mn follow-on equity offering to fund their recent acquisition of two properties.
- The primary offer quantity will be 35,200 units and there is an over-allotment quantity of 2,464 units.
- In this insight, we take a closer look at the details of this offering and the potential of this offering to trigger strong secondary market performance in the following weeks.
Additional Potential Inclusions in KOSPI 200 Rebalance in May 2023
- In this insight, we discuss the potential new inclusions in KOSPI 200 rebalance in May 2023.
- The five stocks that are potential inclusions in KOSPI 200 rebalance in May 2023 include Kumyang, Cosmo Chemical, Dentium, Jeju Air, and Youlchon Chemical.
- Kumyang and Cosmo Chemical are up on average 177% YTD. We would not chase these two stocks as their share prices have already risen considerably.
Liontown Resources (LTR AU): A Bump to Albermale’s A$2.50 Offer Is Justifiable
- Liontown Resources (LTR AU) has rejected an unsolicited non-binding privatisation proposal from Albemarle Corp (ALB US) at A$2.50 per share, which is a 63.9% premium to the undisturbed price (27 March).
- The offer is attractive in comparison to peer multiples and historical share prices. Liontown suggests that the offer does not appropriately value the Kathleen Valley Lithium Project.
- A bump to the Board’s desired A$3.00 offer is justifiable based on the Kathleen Valley NPV sensitivity analysis related to spodumene prices. Albemarle remains willing to engage.
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