In today’s briefing:
- Minebea Mitsumi Overbids Yageo for Shibaura Electronics (6957)
- Shibaura Electronics (6957 JP): Minebea Mitsumi’s (6479 JP) White Knight Tender Offer at JPY4,500
- Korea Short Selling: Biggest Changes in Shorts & Trade Performance
- Corporate Act Amendment Takes Unexpected Turn: Watch for Holdco Momentum Plays Post-June Election
- Suzuki Motor Placement Updates – Relative Correction Has Been Decent so Far. But Lacks Buyback
- Goldlion Holdings (533 HK): An Attractive Spread Ahead of the Vote on 9 May
- Gold Road (GOR AU)’s U-Turn On Gruyere’s Underground Mine Estimates
- Goldlion Holdings (533 HK): 9th May Vote On Tsang Family’s Offer
- Exploring Strategic Reviews: Key Opportunities in Biopharma and Food Sectors
- Alcon’s Strategic Acquisition of Lensar: Potential 23% Upside with CVR Payout and Antitrust Considerations
Minebea Mitsumi Overbids Yageo for Shibaura Electronics (6957)
- In early February, Yageo Corporation (2327 TT) made an unsolicited bid for Shibaura Electronics (6957 JP) at ¥4,300/share. They had approached in October 2024, and continued approaches through end-January.
- Shibaura’s bankers approached Minebea Mitsumi (6479 JP) in January. Due diligence, then bids. They bid ¥4,600. Not enough said the SC. Then Trump. Then ¥4,400. Now ¥4,500 accepted 9 April.
- But Trump tariffs relief came 9 April US time. And the Offer Price is below the mid-point of ALL three different financial advisors. I think this is not done yet.
Shibaura Electronics (6957 JP): Minebea Mitsumi’s (6479 JP) White Knight Tender Offer at JPY4,500
- Shibaura Electronics (6957 JP) announced a preconditional tender offer from Minebea Mitsumi (6479 JP) at JPY4,500 per share, a 4.7% premium to Yageo Corporation (2327 TT)’s JPY4,300 hostile offer.
- The offer is scheduled to start on 23 April, ahead of Yageo’s 7 May start. The Board intends to recommend the Minebea offer and oppose the Yageo offer.
- Due to its low premium to the Yageo offer, at least another bidding round is highly probable, and the Minebea offer is below the midpoint of the IFA DCF valuation.
Korea Short Selling: Biggest Changes in Shorts & Trade Performance
- The resumption of short selling in Korea came at a good time for investors, giving them some additional tools to manage market volatility.
- Short interest has increased from 0.17% to 0.23% of market cap for the KOSPI market and from 0.46% to 0.63% for the KOSDAR market.
- The KOSPI/KOSDAQ ratio has reverted a bit on profit taking, and the forecast index deletions have recovered a bit but should continue to see increase short interest.
Corporate Act Amendment Takes Unexpected Turn: Watch for Holdco Momentum Plays Post-June Election
- The word on the street is the Dems are banking on their candidate winning in June, then clearing the veto and pushing the Corporate Act amendment through immediately.
- What seemed like a dead issue for the Corporate Act amendment has turned into a surprise, shifting market momentum and potentially impacting the Korean stock scene.
- It could shift the Korean market’s focus to long-term governance improvements, targeting major holdcos like CJ, Hanwha, GS, Doosan, Mobis, SK, and Samsung C&T, with June’s election key.
Suzuki Motor Placement Updates – Relative Correction Has Been Decent so Far. But Lacks Buyback
- Tokio Marine Holdings (8766 JP) and Sompo Holdings (8630 JP) aim to raise around US1.15bn (including over-allotment) via selling around 5% of Suzuki Motor (7269 JP).
- While Suzuki doesn’t have much direct exposure to the US markets, its shares had corrected in line with other auto players going into the deal launch.
- In this note, we compare the deal to some of the past deals and talk about the updates since our last note.
Goldlion Holdings (533 HK): An Attractive Spread Ahead of the Vote on 9 May
- Goldlion Holdings (533 HK)’s IFA considers Mr Tsang’s HK$1.5232 per share offer fair and reasonable. The vote is on 9 May.
- The key condition is the scheme approved by at least 75% disinterested shareholders (<10% disinterested shareholders rejection). FMR holds a blocking stake but should be supportive.
- The offer is reasonable compared to peer multiples and historical trading ranges. At the last close and for the 10 July payment, the gross/annualised spread is 4.3%/19.0%.
Gold Road (GOR AU)’s U-Turn On Gruyere’s Underground Mine Estimates
- After rejecting Gold Fields (GFI SJ)‘s Offer last month, calling terms “low ball and opportunistic”, Gold Road (GOR AU) has done a bang-up job how NOT to underpin that position.
- After correcting minor information (on the 4th April) to an Australian Roadshow Investor Presentation, GOR has now retracted details of the underground mining potential at the Gruyere mine.
- But don’t expect any new developments in this transaction until after De Grey Mining (DEG AU)‘s Scheme vote on the 16th April.
Goldlion Holdings (533 HK): 9th May Vote On Tsang Family’s Offer
- On the 17th December 2024, Goldlion Holdings (533 HK), an apparel manufacturer/distributor, announced an Offer, by way of a Scheme, from the Tsang family (2.95% stakeholder), for shares not held.
- The Tangs are offerings $1.5232/share (declared final), a 24.85% premium to last price, but a 71% premium to undisturbed. Despite the very low price-to-book multiple, this transaction looks done.
- The Scheme Doc is now out, with a Court Meeting on the 9th May, with payment on or before the 10th July. The IFA (Altus Capital) says “fair & reasonable“.
Exploring Strategic Reviews: Key Opportunities in Biopharma and Food Sectors
- Lifeway Foods (LWAY) faces a pending takeover by Danone, with a potential board overhaul and strategic acquisition synergies.
- Liquidia (LQDA) anticipates FDA approval for Yutrepia, challenging UTHR’s monopoly, with potential valuation gap closure post-commercialization.
- Sage Therapeutics (SAGE) received a buyout offer from Biogen, with ongoing strategic review and potential for increased offer price.
Alcon’s Strategic Acquisition of Lensar: Potential 23% Upside with CVR Payout and Antitrust Considerations
- Lensar is being acquired by Alcon for $14/share in cash plus a CVR worth up to $2.75/share.
- The CVR payout requires Lensar’s systems to reach 614,000 procedures across 2026 and 2027, needing a 27% CAGR.
- North Run, holding 56% economic ownership, will receive CVRs only on common shares and warrants, not preferred shares.
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