In today’s briefing:
- Oji Paper (3861 JP) – Big New Buyback After Crossholding Sales And An Activist Peeking From Register
- NEC Networks (1973 JP) Final Showdown II – Synergies Not Included, So Fair Value Not Offered
- Vesync (2148 HK): The Yang Family to Launch a Privatisation Offer?
- VCredit (2003 HK): Ma Makes His Move?
- Insignia Financial (IFL AU): Bain Contemplating a Privatisation Bid
- Lufax (6623 HK): On Ping An’s Stake Increases
- FSS Puts a Break on Hyundai Motor Securities Rights Offering
- Insignia Financial (IFL AU): Bain’s Indicative Proposal a Tad Light
- EQD | Global Option Implied Volatility – From Nifty 50 to Bitcoin, Plus BTC-Bond Special
- Grifols: Activism and Debt Refinancing
Oji Paper (3861 JP) – Big New Buyback After Crossholding Sales And An Activist Peeking From Register
- Paper manufacturer Oji Holdings (3861 JP) has spent 25 years not going anywhere. Their current MTMP isn’t exciting. And it looks like they will fail worse than last time.
- But an activist put their head above the parapet recently, and now the company has announced larger new cross-holding selldown targets, and a big 9% buyback, with a ToSTNeT-3 tomorrow.
- The stock is at 0.47x book. They have nearly ¥400bn of financial assets which are non-core. They have land and property holdings. And they have lots of cross-holdings to repurchase.
NEC Networks (1973 JP) Final Showdown II – Synergies Not Included, So Fair Value Not Offered
- Yesterday, NEC Corp (6701 JP) extended its Tender Offer to buy controlled subsidiary Nec Networks & System Integr (1973 JP) for another 10 days. It did not have enough shares.
- As discussed here 4wks ago, then here yesterday, NEC might not get enough shares unless it offers a higher price. There’s a reason. It is not a high enough price.
- METI Fair M&A Guidelines and Guidelines for Corporate Takeovers define fair. Guarantees of a floor price and a fair allocation of synergies. One is questionable. The other is not there.
Vesync (2148 HK): The Yang Family to Launch a Privatisation Offer?
- Vesync (2148 HK) is in a trading halt “pending the release of an announcement pursuant to the Code on Takeovers and Mergers which contains inside information of the Company.”
- The Yang family is likely seeking to privatise Vesync through a Cayman scheme. The shares are trading 24% below the HK$5.52 IPO price.
- We use several methods to triangulate the likely offer price, which suggests a price range of HK$5.09-10.30 per share, with an average of HK$6.71, a 59.8% premium to last close.
VCredit (2003 HK): Ma Makes His Move?
- VCredit Holdings Ltd (2003 HK), a provider of consumer financial services in China, was listed on the 21st June 2018 at HK$20/share. Shares are currently down 90%.
- Ma Ting Hung, VCredit’s chairman, held 35.6% at the time of listing, and currently holds 39.85%.
- VCredit was suspended this morning pursuant to the Takeovers Code. Now might be the time for Ma to take VCredit back into the fold.
Insignia Financial (IFL AU): Bain Contemplating a Privatisation Bid
- IOOF Holdings (IFL AU) shares rose 11% in the final minutes of trade, fueled by media reports suggesting that Bain was in the advanced stages of making a buyout offer.
- The presence of several substantial shareholders necessitates an attractive takeover premium. Takeover interest is unsurprising as Insignia trades at a material discount to peers.
- We use several methods to triangulate the likely offer, which suggests a price range of A$3.44-5.50 per share, with an average of A$4.67, a 37.4% premium to the last close.
Lufax (6623 HK): On Ping An’s Stake Increases
- As discussed in PA Gooddoctor (1833 HK) – The Arb Is To Take The Stock, Ping An increased its stake in Lufax (6623 HK) to 56.82% via a scrip dividend.
- This triggered a zero-premium MGO, which closed on the 28 October 2024 with negligible tendering.
- Via an amendment to a tri-party agreement, Ping An subsequently lifted its stake to 66.85%. It’s worth understanding how Ping An has taken its stake >50% and beyond.
FSS Puts a Break on Hyundai Motor Securities Rights Offering
- After the market close on 12 December, the Financial Supervisory Service (FSS) put a break on Hyundai Motor Securities’ rights offering worth 200 billion won.
- The proposed rights offering included issuing 30.1 million new shares, representing 95% of its current outstanding shares (31.7 million).
- We would try to capitalize on the short term bullish upside on its shares of Hyundai Motor Securities and sell into strength.
Insignia Financial (IFL AU): Bain’s Indicative Proposal a Tad Light
- IOOF Holdings (IFL AU) has received an indicative proposal from Bain Capital to acquire all of its shares at A$4/share in cash.
- The offer takes advantage of IOOF Holdings (IFL AU)‘s underperformance over the last couple of years and there could be competing offers from other investment managers.
- Short interest in IOOF Holdings (IFL AU) is around 2% of shares out and 2.5% of float. There could be short covering in the next few days.
EQD | Global Option Implied Volatility – From Nifty 50 to Bitcoin, Plus BTC-Bond Special
- Cross-Market volatility snapshot highlighting option opportunities. Today’s opportunities are in the Nifty 50 and in Bitcoin
- Nifty 50: The index crossed the 50-day moving average, signaling a bullish trend. Hedging gains is recommended due to expected macroeconomic uncertainty in Q1 2025.
- Bitcoin: Surpassed $100,000, driven by positive sentiment towards the incoming US President’s crypto-friendly stance. Options strategies are suggested, plus how a synthetic Bitcoin bond compares to a corporate bond.
Grifols: Activism and Debt Refinancing
- Debt Refinancing Achieved: Grifols issued €1.3 billion in bonds and extended its revolving credit facility, significantly improving liquidity to €1.7 billion proforma for Q3 2024 while addressing 2025 maturities.
- Activist Shareholder Pressure: Hedge funds, including Flat Footed, continue to push for governance reforms, citing conflicts of interest and value destruction involving the Grifols family and board member Tomás Dagá.
- Valuation Opportunity: Grifols trades at a high discount to peers, with upside potential based on its strong market position in plasma therapies, EBITDA recovery, and margin expansion post-COVID.
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