In today’s briefing:
- Nikkei 225 Rebal – Beating a Dead Horse
- Taiwan Cement GDRs Early Look – While Momentum Is Not the Greatest, the Deal Is Very Well Flagged
- PCOMP Adhoc Index Rebalance: NIKL to Replace UBP in a BIG Move
- GS AM Consortium/Kahoot: Waiving of Minimum Acceptance, Spread
- Offer Results and Interim Dividend
Nikkei 225 Rebal – Beating a Dead Horse
- The September 2023 Nikkei 225 Rebalance is tomorrow at the close. This will engender a lot of buying of three names, and a lot of selling of 3 names.
- It will also engender a funding trade of nearly ¥460bn.
- I am going to beat the dead horse and warn about certain issues with this rebalance.
Taiwan Cement GDRs Early Look – While Momentum Is Not the Greatest, the Deal Is Very Well Flagged
- Taiwan Cement (1101 TT) is looking to raise US$400m in its upcoming global depository receipts (GDRs) offering. Included is another planned raising of US$500m via convertible bonds.
- Similar to previous GDR listings, the deal is a long drawn out process with TC requiring multiple approvals, and thus providing ample time for investors to position for the raising.
- As of last close, the amount of shares to be offered under the equity component is around 388m shares, or 19.5 days of three month ADV.
PCOMP Adhoc Index Rebalance: NIKL to Replace UBP in a BIG Move
- In a surprise development, UnionBank of the Philippines (UBP PM) will be deleted from the Philippines Stock Exchange PSEi Index (PCOMP INDEX) and replaced with Nickel Asia (NIKL PM).
- There will be a BIG impact on both stocks as a result of the change with passive trackers need to trade in excess of 30 days ADV.
- Expect both stocks to move today and then continue that move for the next few days till the changes are implemented.
GS AM Consortium/Kahoot: Waiving of Minimum Acceptance, Spread
- On 28 September, Kangaroo Bidco announced that it waives the Minimum Acceptance Condition (>90% acceptances) of its best and final NOK 35/share offer for Kahoot! ASA (KAHOOT NO).
- Acceptances so far total 69.29%. The only remaining conditions are regulatory approvals from both China and United States.
- As of early afternoon 28 September, spread is 0.63%/5.55% (gross/annualised). Although volumes are thin, I expect higher volumes in the last stretch of the offer period. Recommendation: long and tender.
Offer Results and Interim Dividend
- The Offer has been accepted for 19.2% of the current share capital, which means that EQT will control 98.2% of the shares.
- Those who tendered will receive a €3.2/share interim dividend (€2.72/share net) on 4 October, and €12.8/share on 6 October. EQT doesn’t intend to seek a squeeze-out.
- Investors in SUSE who have not tendered will become soonish shareholders in an unlisted company. Buying now means an 18.8% yield (net), and hoping for a future purchase offer.
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