In today’s briefing:
- Oriental Land (4661) Placement by Keisei Rail (9009) Says “That’s the Door”
- JSR (4185) – Reporters Reportedly Report Conditions Such That JIC Deal Could Come Soon
- Shinko Electric (6967) – Break/Gap Risk Is Considerably Changed Now
- JSR Corporation (4185 JP): Response to SUNY RF Lawsuit and Rumours of SAMR Approval
- Karuna Therapeutics Inc (KRTX.US) – This Company Is Worth Bristol Myers Squibb Paying a High Premium
- Quiddity HSTECH Jun 24 Leaderboard: Capping Flows Li Auto, Meituan, and XPeng
- Azure Min (AZS AU): Trading Wide Ahead Of 8th April Vote
- Quiddity HSCEI Jun 24 Flow Expectations: Many Reasons to Follow the Developments Closely
- Paradise Announces A Switch in Listing from KOSDAQ to KOSPI
- Telefonica/Telefonica Deutschland Holding AG: Delisting Offer
Oriental Land (4661) Placement by Keisei Rail (9009) Says “That’s the Door”
- Over two decades, Keisei Electric Railway Co (9009 JP) has been the subject of softer and harder activist efforts to have Keisei monetise its stake in affiliate Oriental Land (4661).
- The most recent efforts were by Palliser last fall, briefly discussed here two weeks ago when Keisei announced a buyback.
- Today, Keisei announced (Japanese only) an Accelerated Block Offering of 1% of Oriental Land shares. The accompanying announcement is worth reading. It’s pretty clear.
JSR (4185) – Reporters Reportedly Report Conditions Such That JIC Deal Could Come Soon
- JSR Corp (4185 JP) saw its stock pop Monday when an article in a Japanese paper said the Tender Offer would start “within the month.”
- Investors went from “concerned about delay or worse” to “anticipating resolution.” Then Wednesday just before the close the stock popped as media outlets reportedly reported no SAMR approval was required.
- There has been no comment from either JIC or JSR but the discount to terms has gone from 6.9% last Friday to a 1.7% discount now.
Shinko Electric (6967) – Break/Gap Risk Is Considerably Changed Now
- Seven weeks ago I wrote about Shinko Electric Industries (6967 JP)‘s changing Break/Gap Risk as comps had gained. Shinko was cheap to its main comp and peers vs Announcement Date.
- Since then, Shinko is +4.1% and direct peer Ibiden Co Ltd (4062 JP) is -14.5%. This has erased Shinko’s underperformance since announcement, and shrunk a 9% spread to 3.3% yesterday.
- With the spread tighter and tech showing some weakness, I’d be happy unwinding at yesterday’s closing spread (3.3%).
JSR Corporation (4185 JP): Response to SUNY RF Lawsuit and Rumours of SAMR Approval
- JSR Corp (4185 JP) has filed a solid response to SUNY RF’s lawsuit. SUNY RF will counter with a response by 13 March.
- The response suggests that SUNY RF’s lawsuit will not be harmed if JIC proceeds with TOB, which is the strongest indication that JIC is comfortable taking on the litigation risk.
- A media article stating that SAMR has allowed JIC to withdraw its merger control filing helps explain the current tight spread. However, the article needs to be treated with caution.
Karuna Therapeutics Inc (KRTX.US) – This Company Is Worth Bristol Myers Squibb Paying a High Premium
- Due to large patient population and strong clinical demand for new therapies, the future commercialization prospects of effective drugs in the field of schizophrenia would be relatively certain and promising.
- Our forecast on the peak sales of KarXT is about US$10 billion. In other words, at this peak sales level, BMS is able to recover the US$14 billion in cost.
- Karuna’s P/B is much higher than peers. If investors already have Karuna in portfolio, they may consider taking profits in time.But another rally is possible when KarXT is officially approved.
Quiddity HSTECH Jun 24 Leaderboard: Capping Flows Li Auto, Meituan, and XPeng
- The HSTECH Index tracks the performance of the top 30 technology companies listed in Hong Kong that have high business exposure to certain technology themes.
- In this insight, we take a look at the rankings of potential ADDs and potential DELs for the June 2024 index rebal event.
- While there are no expected ADDs/DELs for HSTECH in June 2024, some index members like Li Auto (2015 HK), Meituan (3690 HK), and XPeng (9868 HK) could experience capping flows.
Azure Min (AZS AU): Trading Wide Ahead Of 8th April Vote
- Back on the 19th Dec, Sociedad Quimica y Minera (SQM/B CI)/Hancock offered Azure Minerals (AZS AU) shareholders A$3.70/share by way of a Scheme, a ~52% premium to the undisturbed price.
- Creasy Group (12.64%) and Delphi Group (10.15%) gave irrevocables. Mineral Resources (MIN AU)‘s 14.5% stake was unclear; but they exited on the 21 Feb. “Arbitrageurs should arb. Corporations should Corp“.
- The Transaction Booklet is now out with a Scheme Meeting on the 8th April. The IE says fair. Expected implementation on the 18 April.
Quiddity HSCEI Jun 24 Flow Expectations: Many Reasons to Follow the Developments Closely
- The HSCEI serves as a benchmark to reflect the overall performance of the top 50 “Mainland China” securities listed in Hong Kong.
- In this insight, we take a look at the potential index changes and the resultant capping flows for HSCEI index rebal event in June 2024.
- Based on the current data, I see two low-conviction ADDs and two low-conviction DELs.
Paradise Announces A Switch in Listing from KOSDAQ to KOSPI
- On 7 March, Paradise Co Ltd (034230 KS) announced that it plans to switch its listing from KOSDAQ to KOSPI.
- Paradise will be excluded from KOSDAQ150 when it makes the switch to KOSPI. However, it is not certain if and when the company will be included in KOSPI200.
- All in all, we would argue that the valuations are not especially appealing for Paradise, despite the sharp pick-up in business in 2023.
Telefonica/Telefonica Deutschland Holding AG: Delisting Offer
- Telefonica SA (TEF SM) has decided to make a €2.35/share cash takeover offer to acquire the 5.65% stake in its German unit Telefonica Deutschland Holding (O2D GR) that it does not own.
- The bidder and parent company, Telefonica, have informed Telefonica Deutschland that, except for FY 2023 dividend, they do not plan to support the distribution of dividends for future financial years.
- The Bidder will apply for delisting thus the shares will soon become illiquid. Accept offer.
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