In today’s briefing:
- Overall Assessment of the Value-Up Policy-Related Aspects of the Tax Reform Plan Released Today
- StubWorld: Legend (LEGN US) Offer Or Not, Genscript (1548 HK) Is Attractive
- Arvida (ARV NZ): Stonepeak’s Offer
- Canvest (1381 HK): Trading Wide To Grandblue’s Offer
- Solactive Global Uranium & Nuclear Components Index Rebalance: Two Adds & US$500m Trade
- Arvida Group (ARV NZ): Stonepeak’s Binding Proposal at NZ$1.70
- Quiddity Leaderboard BSE/SENSEX Dec 24: Could Zomato’s Share Price Rally Become a Problem?
- IDX30/LQ45/IDX80 Index Rebalance: Constituent, Float & Capping Changes
- Jeisys Medical (287410 KS): Archimed Reloads Delisting Offer
- STOXX 50: First September Forecasts for Europe and Eurozone
Overall Assessment of the Value-Up Policy-Related Aspects of the Tax Reform Plan Released Today
- The highest dividend tax rate drops from 49.5% to 25%, leading the local capital market to view the reform as more shareholder-focused than company-focused.
- The top inheritance tax rate drops from the 60% range to 40%, a meaningful reduction for conglomerates like Hyundai and Hanwha, though below initial expectations.
- Tax incentives in the reform are less aggressive than expected, with modest corporate and inheritance tax cuts. However, this compromise increases the likelihood of its passage, boosting short-term market expectations.
StubWorld: Legend (LEGN US) Offer Or Not, Genscript (1548 HK) Is Attractive
- Biotech play Genscript Biotech (1548 HK) and ~48%-held Legend Biotech (LEGN US) popped recently on a reported tilt for Legend. Neither Genscript nor Legend made exchange announcements supporting the claim.
- Preceding my comments on Genscript/Legend are the current setup/unwind tables for Asia-Pacific Holdcos.
- These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.
Arvida (ARV NZ): Stonepeak’s Offer
- Arvida (ARV NZ), a leading retirement living and aged care service provider in New Zealand, announced a Scheme from PE-outfit Stonepeak at NZ$1.70/share, in cash, a 65% premium to undisturbed.
- The Offer has unanimous board support. ~18% of shares out are supportive. Standard Scheme voting applies. Consent from NZ’s Overseas Investment Office also required.
- A Scheme Meeting is expected to be held in 4Q24 with implementation in the same quarter. Optics are a tad opportunistic; but this looks priced to complete.
Canvest (1381 HK): Trading Wide To Grandblue’s Offer
- On the 22 July, waste-to-energy play Canvest Environmental Protection (1381 HK) announced a pre-conditional Offer from Grandblue Environment (600323 CH) at $4.90/share (best & final), by way of a Scheme.
- Terms mirror that announced on the 7th July. Best Approach (54.75% of shares out) is seeking to roll over 7.23%. Pre-cons include the usual regulators: MoC, NDRC, SAMR and SAFE.
- Any new dividends paid will be netted. 4.478% blocking stake. Pre-IPO investor AEP Green Power, has 5.67%. Best Approach is required to abstain from voting on the Scheme and rollover.
Solactive Global Uranium & Nuclear Components Index Rebalance: Two Adds & US$500m Trade
- Solactive has announced the constituent changes for the Global Uranium & Nuclear Components Index with implementation at the close on 31 July.
- Oklo Inc (OKLO US) and Western Uranium & Vanadium Corp (WUC CN) will be added to the index. Estimated one-way turnover is 7.9% resulting in a round-trip trade of US$486m.
- There are only 4 trading days to implementation of the changes and we’d watch out for big moves on stocks that have more than 2x ADV to trade.
Arvida Group (ARV NZ): Stonepeak’s Binding Proposal at NZ$1.70
- On 22 July, Arvida (ARV NZ) entered a scheme implementation agreement with Stonepeak at NZ$1.70, a 65.0% premium to the undisturbed price.
- The transaction will require OIO approval, statutory supervisors’ consent and shareholder approval. The Metlifecare Ltd (MET NZ) precedent suggests that the OIO and statutory supervisor should be forthcoming.
- The offer is attractive, and shareholders representing 18% of outstanding shares are supportive. At the last close and for a November payment, the gross/annualised spread was 4.9%/14.2%.
Quiddity Leaderboard BSE/SENSEX Dec 24: Could Zomato’s Share Price Rally Become a Problem?
- In this insight, we take a look at the Potential ADDs/DELs for the BSE SENSEX, 100, and 200 indices in the December 2024 index rebal event.
- At present, 3 changes for the BSE 100 index and 7 changes for the BSE 200 index.
- The BSE 100 handling rules for names without futures and options (F&O) sometimes punish companies that have enjoyed good share price rallies and Zomato could get into such a trap.
IDX30/LQ45/IDX80 Index Rebalance: Constituent, Float & Capping Changes
- There is 1 constituent change for the LQ45 Index and 2 constituent changes for the IDX80 Index at the rebalance to be implemented at the close on 31 July.
- The largest passive inflows are expected in Amman Mineral Internasional (AMMN), Bank Rakyat Indonesia (BBRI), Bank Central Asia (BBCA), Bank Mandiri Persero (BMRI) and Jasa Marga (Persero) (JSMR).
- The adds have moved higher over the recent past and are near their highs while the deletes have dropped over the last few years and are trading near their lows.
Jeisys Medical (287410 KS): Archimed Reloads Delisting Offer
- Last month, aesthetic laser maker Jeisys Medical (287410 KS) announced French PE outfit Archimed SAS was seeking to delist the company.
- Via a Tender Offer, Archimed sought to acquire 72% of Jeisys at ₩13,000. Archimed also inked agreements with founders/directors for 26.44%, taking its possible % holding to 98.44%.
- The Tender Offer closed on the 22nd July with Archimed holding 81.39% (including the aforementioned agreements). Archimed has now reloaded, on the same terms. There is no minimum acceptance condition.
STOXX 50: First September Forecasts for Europe and Eurozone
- Nokia OYJ (NOKIA FH) is currently the lowest ranked security in SX5E but still above the exit threshold. Its potential deletion can cause the addition of DSM-Firmenich (DSFIR NA).
- Deutsche Post (DHL GR) & Reckitt Benckiser (RKT LN) are below the SX5P exit threshold. Their deletion can cause the addition of Intesa Sanpaolo (ISP IM) & Banco Bilbao (BBVA SM) .
- Cap Gemini SA (CAP FP) and Compass (CPG LN) are examples of companies with significant market caps which are excluded due to supersector coverage.
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