In today’s briefing:
- Nikkei 225 March 2023 Review Quiddity Leaderboard (Nov 2022)
- Halcyon Agri: Hainan Rubber’s Conditional MGO
- OZ Minerals (OZL AU): BHP Ups Offer by 13%; This Should Get Done
- Delhivery IPO Lockup Expiry – US$2.8bn Lockup Release, with Softbank the Largest Holder
- Pendal/Perpetual: Revised Terms As Supreme Court Orders Scheme To Proceed
- Sea & Pinduoduo Are in Dangerous Territory With Tencent in Disposal Mode
- OZ Minerals (OZL AU) And BHP Have a Deal – Investors Have an OTM Option on Copper
- Lotte Chemical – Ready to Announce Rights Offering Close to 2 Trillion Won?
- Pendal (PDL AU)/Perpetual (PPT AU) Deal Gets a Lifeline from the Court
- STOXX Europe Quiddity Leaderboard Dec 22: ~7 Regular ADDs/DELs & ~5 Intra-Review ADDs/DELs Possible
Nikkei 225 March 2023 Review Quiddity Leaderboard (Nov 2022)
- Early predictions for the March 2023 Nikkei rebalance (TBA early Feb) are little changed. One way turnover would still be about 1.4%. I see 3 ADDs and 3 DELETEs.
- The 3 ADDs should be Oriental Land (4661), Renesas Electronics (6723), and Japan Airlines (9201). The 3 DELETES Toho Zinc (5707), Toyobo (3101), and Nippon Light Metal (5703).
- Oriental Land is the one to watch in March. The Sep 2023 rebalance and subsequent ones are smaller in size but more interesting in impact.
Halcyon Agri: Hainan Rubber’s Conditional MGO
- Halcyon Agri (HACL SP) has announced Sinochem, its largest shareholder with 65.2%, has entered into a SPA to sell 36% of shares out to China Hainan Rubber Industry (601118 CH).
- Upon completion of the SPA, Hainan Rubber will make an MGO, conditional on a 50% tendering acceptance. Sinochem has provided an undertaking not to tender its remaining 29.2% stake.
- The Offer Price? The SPA price is US$0.315/share and the Offer Price will be the SGD equivalent at the close of the SPA.
OZ Minerals (OZL AU): BHP Ups Offer by 13%; This Should Get Done
- BHP Group has made a revised conditional, non-binding and indicative proposal to acquire all shares in OZ Minerals Ltd (OZL AU) at A$28.25/share, 13% higher than its earlier offer.
- The OZ Minerals Board has agreed to give BHP Group Ltd (BHP AU) exclusive due diligence access for 4 weeks and intends to unanimously recommend the revised proposal.
- Barring a competing proposal, this is BHP Group‘s best and final price – expect the stock to trade close to A$28/share today.
Delhivery IPO Lockup Expiry – US$2.8bn Lockup Release, with Softbank the Largest Holder
- In May 2022, Delhivery raised around US$680m in its India IPO, the company is backed by a host of financial investors, the largest being Softbank.
- Delhivery is an online logistics service provider which covers express parcel delivery, heavy goods delivery, part truckload (PTL) freight, truckload (TL) freight, supply chain solutions, cross border solutions etc.
- In this note, we will talk about the upcoming lockup expiry.
Pendal/Perpetual: Revised Terms As Supreme Court Orders Scheme To Proceed
- Under the revised terms, Pendal (PDL AU) shareholders will receive 1 Perpetual (PPT AU) share for every 7 Pendal shares plus $1.65/share cash versus 7.50 Pendal shares and $1.976 cash.
- Separately, the Supreme Court of NSW ruled that Perpetual cannot delay the Scheme on the expectation of a more favourable Offer for the company.
- The first court hearing for the Scheme has been deferred until next week to seek orders convening the Scheme Meeting and for the despatch of the Scheme Booklet to shareholders.
Sea & Pinduoduo Are in Dangerous Territory With Tencent in Disposal Mode
- After distributing over 450m of JD.com Inc. (9618 HK) shares to its shareholders late last year, Tencent (700 HK) took a short break from the downsizing of its public investments.
- Downsizing seems to have restarted with yesterday’s announcement of the distribution of more than 950m Meituan (3690 HK) shares to Tencent shareholders.
- Having already met Tencent’s soft self-sustainability criteria, Pinduoduo (PDD US) and Sea Ltd (SE US) could be lined up as Tencent’s next portfolio downsizing targets.
OZ Minerals (OZL AU) And BHP Have a Deal – Investors Have an OTM Option on Copper
- After nearly 3 months of no talks and movement, then a flurry of both, BHP Group Ltd (BHP AU) and OZ Minerals Ltd (OZL AU) have an agreed Revised Proposal.
- OZ Minerals Board has agreed to support the Revised Proposal at A$28.25/share, a 13% bump, subject to due diligence provided on an exclusive basis for four weeks.
- A fully-franked dividend or capital return will be allowed (Scheme price to be adjusted). This will probably trade tight. One owns a call option on copper for probably 3-4 months.
Lotte Chemical – Ready to Announce Rights Offering Close to 2 Trillion Won?
- Numerous local media mentioned today that Lotte Chemical (011170 KS) is getting ready to announce a major rights offering to acquire Iljin Materials.
- The size of the rights offering has not been finalized but the range of the rights offering could be about 1 trillion won to 2 trillion won.
- There are additional concerns about Lotte Chem funding additional capital into Lotte E&C, which could face more financial difficulties in the local construction sector.
Pendal (PDL AU)/Perpetual (PPT AU) Deal Gets a Lifeline from the Court
- Pendal Group (PDL AU) entered a revised SID with Perpetual Ltd (PPT AU). The revised offer consists of scrip (1 Perpetual share for every 7 Pendal share) and cash (A$1.650).
- Separately, the court found that Pendal could seek a range of remedies in addition to the A$23 million break fee should Perpetual terminate the scheme.
- While Regal Partners (RPL AU)/BPEA EQT could yet derail the scheme by lobbing another bid for Perpetual, the unprecedented court ruling makes it more challenging and costly.
STOXX Europe Quiddity Leaderboard Dec 22: ~7 Regular ADDs/DELs & ~5 Intra-Review ADDs/DELs Possible
- In this insight, we take a look at the names leading the race to become ADDs/DELs for the STOXX Europe 600 and EuroSTOXX Indices for the December 2022 Rebalance.
- Including the addition of Porsche AG (P911 GR), there could be around 7 ADDs/DELs during the December 2022 Rebalance.
- In addition, there could be as many as five more intra-review changes before the end of the year.
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