In today’s briefing:
- Nippon Express (9147 JP) – Buying the Overhang
- CIMC Vehicles (1839 HK): Min Acceptance Condition a Risk for the Final HK$7.50 Offer
- Yaizu Suisankagaku Industry (2812 JP): 3D Succeeds in Securing a Bump to JPY1,438
- Japfa (JAP SP): Impressive Gain. But No Firm Offer
- CIMC (1839 HK): Firm Offer. With A Bump!
- On A Charge: Hanon Systems & Renewed Interest In Hahn/Hankook’s Stake
- PAR Tech Taken To Task Group (TSK AU)
- GlobalWafer GDRs Early Look – Last Deal Did Well, the US$870m Raising Here Will Take It to Net Cash
- JSE Mar 24 Harmonisation – Is Your Benchmark Changing?
- A Merger Between WeBull and SK Growth Opportunities Corp in NASDAQ
Nippon Express (9147 JP) – Buying the Overhang
- The Offering priced today at ¥7,338/share vs ¥8,039/share traded at the close on the day of the announcement. That’s an 8.7% discount for no dilution.
- Compared to a broad basket of Peer Baskets (yes, a basket of baskets), the stock has underperformed by 4.2%, and the 3% discount today puts it at 7+% move.
- Given the relative cheapness, one should be comfortable putting this on if it gets sold off. This is not different to my initial opinion.
CIMC Vehicles (1839 HK): Min Acceptance Condition a Risk for the Final HK$7.50 Offer
- CIMC Vehicle Group Co Ltd (1839 HK) announced the H Share buyback offer, excluding CIMC’s shares, is at HK$7.50, a 16.5% premium to the undisturbed price. The offer is final.
- The key condition is approval by at least 75% of independent H Shareholders (<10% of all independent H Shareholders rejection) along with a 90% minimum acceptance condition.
- Excluding the irrevocables, the 90% threshold requires an independent H Shareholder acceptance rate of 77.7%, which could be challenging due to a light offer. Risk/reward unfavourable.
Yaizu Suisankagaku Industry (2812 JP): 3D Succeeds in Securing a Bump to JPY1,438
- Inaba has bumped its Yaizu Suisankagaku Industry (2812 JP) offer by 6.5% to JPY1,438 and lowered the minimum number of shares to be purchased from 66.67% to 60.00% ownership ratio.
- The bump was forced by 3D Investment Partners increasing its shareholding from 9.78% to 13.81% ownership ratio after the previous JPY1,350 offer was announced on 5 February.
- While the offer continues to value YSK below book value, Murakami and 3D’s support paves the way for completion. At the last close, the gross spread was 7.1%.
Japfa (JAP SP): Impressive Gain. But No Firm Offer
- Back in December 2022, agri-food play Japfa Ltd (JAP SP) spun-off its 62.5% stake in AustAsia Group (2425 HK), as discussed in Japfa Ltd: Trading Cheap After AustAsia In-Specie Distribution
- Last Friday, Bloomberg reported its key shareholder, Renaldo Santosa and his family, who collectively control ~75.5%, are considering taking Japfa private.
- The family acknowledges it has been approached by various financiers, investment banks, but nothing definitive has emerged. Still, Japfa is worth a revisit.
CIMC (1839 HK): Firm Offer. With A Bump!
- Back on the 28 November 2023, SOE-backed CIMC Vehicle Group Co Ltd (1839 HK) announced a conditional H-share buyback at a $7.00/H-share, a paltry 8.6% premium to last close.
- This Scheme-like Offer, with a tendering condition, secured SAFE approval late January. But last month CIMC announced a CBP investigation into the evasion of U.S. anti-dumping and countervailing duties.
- Now CIMC has announced a firm Offer at HK$7.50/share. Terms are final. The majority of independent H-shareholders are supportive. This looks done. Possible completion late-May, early-June.
On A Charge: Hanon Systems & Renewed Interest In Hahn/Hankook’s Stake
- Back in 2004, Hahn & Co and Hankook Tire (161390 KS) acquired a 70% stake in Hanon Systems (018880 KS) from Visteon (VC US), an automotive electronics supplier, for ₩3.8tn.
- Three years ago, Hahn/Hankook explored the sale of this 70% stake, which was expected to fetch ~₩8tn (US$7bn). Reportedly, Carlyle, TPG, Bain and auto supplier Mahle submitted preliminary bids.
- That 70% stake is now worth ₩2.3tn. And reportedly, Carlyle has returned to the trough.
PAR Tech Taken To Task Group (TSK AU)
- PAR Technology (PAR US), a hospitality technology outfit, and TASK Group Holdings (TSK AU) have entered into a Scheme agreement.
- PAR is offering A$0.81/share in cash, a 103% premium to last close; or a 50:50 cash/scrip option with an implied value of A$0.98/share, an 145% premium to undisturbed.
- TASK’s board unanimously recommends the Scheme in the absence of a superior proposal. A Scheme meeting is expected be held in June.
GlobalWafer GDRs Early Look – Last Deal Did Well, the US$870m Raising Here Will Take It to Net Cash
- Globalwafers (6488 TT) is looking to raise up to US$870m in its upcoming global depository receipts (GDRs) offering.
- GlobalWafer recently announced its board’s resolution to issue between 36-45m new shares in the form of GDRs, with the use of proceeds geared towards purchasing of raw materials overseas.
- Similar to previous GDR listings, the deal is a long drawn out process with the firm required to jump through a number of board/shareholder/regulatory approval loops.
JSE Mar 24 Harmonisation – Is Your Benchmark Changing?
- Since the introduction of the Shareholder Weighted indices (SWIX) in July 2003, fund managers with South African equity mandates have had an array of benchmarks to choose from.
- The SWIX was introduced at a time when resources made up more than 50% of the Top 40.
- The SWIX methodology addressed this concentration by adjusting the float of dual-listed entities to reflect shares held by South African residents (eg. AGL, BHP).
A Merger Between WeBull and SK Growth Opportunities Corp in NASDAQ
- On 28 February, WeBull announced a merger with SK Growth Opportunities SPAC on NASDAQ. The proposed transaction represented an implied pro forma enterprise value of about $7.3 billion.
- WeBull had 4.3 million funded accounts and $8.2bn in assets under custody at end of 2023. In comparison, Robinhood had 23.4mn funded accounts and $102.6bn in assets under custody.
- Given the numerous material concerns about this deal, we would avoid it. There are no financials including income statement and balance sheet of WeBull in the prospectus.
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