In today’s briefing:
- NTT’s Partial Offer for Intage (4326) Part Deux – Refining Pro-Ration Expectations
- Kenedix J-REIT Family Merger – Still Room (And Time) To Move
- JSE September 2023 Index Rebalance
- SK Square: Will Alibaba Acquire 11st?
- Golden Eagle Energy (SMMT IJ): Trading Wide To Terms
- IMAX China (1970 HK): Risk as Scheme Vote on 10 October
- Quiddity Primer for ChiNext & ChiNext 50 Index Rebalance Events
- IMAX China (1970 HK)’s Offer: 10th Oct Shareholder Vote
- Geminder’s Opening Salvo For Pact?
- I Squared & TDR/Applus: Competing Offer at €9.75
NTT’s Partial Offer for Intage (4326) Part Deux – Refining Pro-Ration Expectations
- Last week I wrote about NTT’s Partial Offer for Marketing Consultant Intage (4326) – (with a spurious hyphen at the end).
- In the last couple of days, there have apparently been a few blocks printed on the tape. I have received questions about pricing and pro-ration.
- So here I provide a set of 11 possible pro-ration cases, and suggest ways for traders and investors to think about the risks and possibilities.
Kenedix J-REIT Family Merger – Still Room (And Time) To Move
- In mid-June, three months ago yesterday, Kenedix Office Investment Co (8972 JP), Kenedix Retail REIT (3453 JP), and Kenedix Residential Investment (3278 JP) announced a three-way merger for Nov1.
- All three popped in price, and peaked three weeks later, both outright and vs Peers. Then it fell sharply back.
- It is worth looking at the new Combined “KDX” entity on a pro-forma basis. There should be more to go.
JSE September 2023 Index Rebalance
- JSE indexes will be rebalanced in the closing auction tomorrow.
- MCG will fall out of the TOPI and DTOP and HAR will enter. The ALSI gets reviewed semi-annually in March and September.
- ACL and LBR will fall out of the ALSI, ALSI SWIX and the capped variants.
SK Square: Will Alibaba Acquire 11st?
- Maeil Business Daily reported that Alibaba Group Holding (9988 HK) is considering on acquiring a controlling stake in 11st, which is a leading e-commerce platform owned by SK Square
- In 2018, 11st was valued at 2.7 trillion won by financial investors. However, the current valuation of 11st is estimated to have declined to about 1 trillion won (US$760 million).
- We estimate that the probability of Alibaba acquiring 11st is about 60-70%.
Golden Eagle Energy (SMMT IJ): Trading Wide To Terms
- On the 26 July, Geo Energy Resources (GERL SP) announced an agreement to acquire a majority stake in coal miner Golden Eagle Energy (SMMT IJ) (GEE).
- Via an S&P, GEO intends to buy a 58.7% stake in Golden Eagle from Indonesian conglomerate Rajawali Group for US$154.1mn.
- The completion of the S&P, which is subject to Indonesia’s OJK and Geo shareholder approval, will trigger an MTO at IDR 1,255/share.
IMAX China (1970 HK): Risk as Scheme Vote on 10 October
- IMAX China Holding (1970 HK)‘s scheme document is out, with the court meeting scheduled for 10 October. The IFA considers IMAX Corp (IMAX US)‘s HK$10.00 offer fair and reasonable.
- The key condition is approval by at least 75% of disinterested shareholders (<10% of all disinterested shareholders rejection). No independent shareholder holds a blocking stake.
- A recovering box office, early indications of an effort to rally retail NO votes and a high minority participation rate in AGMs pose a risk. The risk/reward profile is unfavourable.
Quiddity Primer for ChiNext & ChiNext 50 Index Rebalance Events
- 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 brief look at the index selection methodology and the historical price and volume performance of ChiNext and ChiNext 50 rebalance baskets.
IMAX China (1970 HK)’s Offer: 10th Oct Shareholder Vote
- Back on the 13 July, IMAX China Holding (1970 HK) announced a take-private transaction from its parent IMAX Corp (IMAX US) at HK$10/share. Terms have been declared final.
- The price is a 9.65% premium to last close but a 39.47% premium over the closing price on the last full trading day, suggesting apparent news leakage.
- The Scheme Doc is out and independent shareholders get to vote on the transaction on the 10th October. This vote could – should – be close. Only for the brave.
Geminder’s Opening Salvo For Pact?
- Plastic products manufacturer Pact Group Holdings (PGH AU) has announced an unconditional off-market takeover from its major shareholder, Raphael Geminder.
- Geminder, with a current stake of 50%, is offering – via wholly-owned entity Kin Group – A$0.68/share, a paltry 0.07% premium to last close. Shares recently touched an all-time low.
- The Offer is (should be) open for a month. As the bid is unconditional, there’s nothing to stop Geminder from buying shares higher, then simply lifting his Offer price.
I Squared & TDR/Applus: Competing Offer at €9.75
- On 14 September, a “competing” acquisition offer for Applus has been made by Amber Equity, a vehicle of I Squared and TDR Capital, at €9.75/share, in cash, cum dividend.
- The offer represents 10.7x EV/Fwd NTM EBIT and a 2.6% increase over Apollo’s offer, which seems to signal Amber will not raise its offer by much more.
- I believe there will be an increased offer from Apollo, probably at least around €10/share (c. 2.6% increase). I’d be long Applus.
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