In today’s briefing:
- New Information on Korea Value-Up Index Scoring System & Constituent Weighting
- Roland DG (6789 JP): Brother (6448 JP)’s Unexpected Competing Hostile Offer
- Optus Sale Would Be A BIG Payday For SingTel
- Quiddity Leaderboard STAR 50 Jun 24: 3 Changes Likely But Some Question Marks Over Certain Names
- Roland DG (6789) – Brother (6448) Launches Hostile Overbid to Taiyo MBO – You Love To See It
- QV Equities (QVE AU) Backs WAM Leaders’ Cash/Scrip Offer
- Volpara Health (VHT AU): 12th April Shareholder Vote
- Quiddity Leaderboard ChiNext & ChiNext 50 Jun 24: Multiple Changes to Expectations; US$481mn One-Way
- Volpara Health (VHT AU): Scheme Vote on 12 April
- An Update of the Potential KOSPI200 Rebalance Candidates in June 2024
New Information on Korea Value-Up Index Scoring System & Constituent Weighting
- KRX considers a comprehensive change to the Value-up Index scoring system. Weightings emphasize ROE, PER, and FCF while reducing PBR weight.
- KRX considers adopting scoring-based constituent weighting to prevent JPX Prime 150’s issues, but NPS opposes. Float market cap weighting like JPX Prime 150 is contemplated to address concerns.
- Momentum trading in the Value-up initiative will favor low PER and high ROE stocks over low PBR. The semiconductor sector is anticipated to benefit significantly from float market cap-based weighting.
Roland DG (6789 JP): Brother (6448 JP)’s Unexpected Competing Hostile Offer
- Brother Industries (6448 JP) has disclosed an unexpected competing hostile offer for Roland DG Corp (6789 JP) at JPY5,200 per share, a marginal 3.3% premium to the Taiyo-sponsored MBO (JPY5,035).
- Unlike the Taiyo offer, the Brother offer is pre-conditioned on regulatory approvals and has a proposed start date of mid-May. The Board is evaluating the Brother offer.
- The Board’s three options with declining probability are to ask Taiyo for a bump, continue to recommend an unchanged Taiyo offer or recommend the Brother offer.
Optus Sale Would Be A BIG Payday For SingTel
- Reportedly (AFR), Singtel (ST SP) is in advanced talks to sell Optus, Australia’s second-largest telco, to Brookfield for A$16bn-A$18bn.
- SingTel quickly countered there is no impending deal; and “Optus remains an integral and strategic part of the Singtel Group and we are committed to Australia for the long term.”
- Optus’ EBITDA in 3Q24 and 9M24 fell 1.8% and 8.3% in S$ terms. Extrapolating out for FY24E suggests pricing under this (very) indicative Offer of around 7.6-8.6 turns of EBITDA.
Quiddity Leaderboard STAR 50 Jun 24: 3 Changes Likely But Some Question Marks Over Certain Names
- STAR 50 Index is a tech-focused, blue-chip index in Mainland China which tracks the top 50 largest and most liquid names in the STAR market of the Shanghai Stock Exchange.
- In this insight, we take a look at our expectations for potential ADDs and DELs for the STAR 50 index during the June 2024 index rebal event.
- I currently expect three changes for the STAR 50 index in June 2024 but there are some questions marks over the names leading the race to become ADDs.
Roland DG (6789) – Brother (6448) Launches Hostile Overbid to Taiyo MBO – You Love To See It
- A month ago, Engagement Investor Taiyo Pacific Partners launched an MBO on Roland DG Corp (6789 JP) after having done a takeover of their former sub years ago.
- I said it was too cheap. Machinery company Brother Industries (6448 JP) has decided the same, and has announced a hostile/unsolicited overbid 3.3% higher. Tender to start in May. Fun!!!
- This will almost certainly get bid even higher as people would expect the MBO bidders won’t simply give up. More below.
QV Equities (QVE AU) Backs WAM Leaders’ Cash/Scrip Offer
- Back on the 31 Jan, WAM Leaders Ltd (WLE AU), said it intended to make an off-market Offer after QV Equities Ltd (QVE AU) rejected its all-scrip NBIO.
- WAM and QVE have now entered into a Scheme. The current scrip terms are 0.7609 new WAM shares per QVE share; OR A$1.02/share cash. Terms will be adjusted …
- … in accordance with the most recently released NTA/shares of WAM and QVE. QVE shareholders are also expected to receive the quarterly dividend of A$0.013/share.
Volpara Health (VHT AU): 12th April Shareholder Vote
- On the 14 December, Volpara Health (VHT AU), which makes software enabling the early detection of breast cancer, announced an Offer by way of a Scheme with Lunit (328130 KS)
- NZ’s OIO approval was satisfied on the 31 January. The Scheme Booklet is now out, with a Scheme Meeting to be held on the 12th April.
- Lunit is offering Volpara shareholders A$1.15/share, in cash, a 47.4% premium to last close. Cornerstone investors with 25.92% of shares out are supportive. The IE says terms are fair.
Quiddity Leaderboard ChiNext & ChiNext 50 Jun 24: Multiple Changes to Expectations; US$481mn One-Way
- The ChiNext Index represents the performance of the 100 largest and most liquid A-share stocks listed on the ChiNext Market of the Shenzhen Stock Exchange.
- The ChiNext 50 index is a subset of the ChiNext Index and it consists of the top 50 names in the ChiNext index with the highest daily average turnover.
- In this insight, we take a look at the names leading the race to become ADDs and DELs in the June 2024 index rebal event.
Volpara Health (VHT AU): Scheme Vote on 12 April
- The Volpara Health Technologies (VHT AU) IE considers Lunit (328130 KS)‘s A$1.15 offer fair and reasonable as it is above its A$0.67-0.82 per share valuation range.
- NZ OIO approval has been received. The scheme is conditional on shareholders’ approval by more than 75% of votes cast and more than 50% of shareholders.
- The scheme vote will get up as the offer is attractive vs. historical trading ranges. At the last close and for the 21 May payment, the gross/annualised spread was 2.2%/13.0%.
An Update of the Potential KOSPI200 Rebalance Candidates in June 2024
- We provide an update of the potential KOSPI200 rebalance candidates in June 2024.
- The bottom 5% market caps in KOSPI200 could be excluded from the KOSPI200 rebalance in June 2024. These 10 stocks are down on average 12.6% YTD.
- We identified seven potential inclusion candidates. Among them, those that have low PBR multiples including HHI and Dongwon Industries could continue to outperform the market leading up to rebalance announcement.
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