In today’s briefing:
- Renesas’ Transformative Offer For Altium
- Outsourcing (2427) MBO Situation – Checking, and Thinking, and Noodling, and Speculating
- Sector ETF Rebalancing with Remarkable Price Impact History: ISC In, Wonik IPS Out
- Japan – Shorts & Positioning on Passive Sells
- Altium (ALU AU): Renesas (6723 JP) Binding A$68.50 Offer
- Quiddity Leaderboard ChiNext & ChiNext 50 Jun 24: US$313mn One-Way, Four Names with Double-Impacts
- Quiddity Leaderboard SSE50/180 Jun 24: US$1.5bn Index Flows One-Way
- Ansarada (AND AU): Datasite’s Binding A$2.50 Offer
- Vitol/Saras: Time to Bid Farewell
Renesas’ Transformative Offer For Altium
- Renesas Electronics (6723 JP), a supplier of advanced semiconductors, is offering Altium Ltd (ALU AU) shareholders A$68.50/share, in cash, a lifetime high, by way of a Scheme.
- Back in June 2021, Altium rejected a A$38.50/share NBIO, then a A$40/share verbal Offer, from US engineering software giant Autodesk. This was discussed in Altium Ltd (ALU) Rebuffs Autodesk Offer
- This is compelling Offer for Altium. For Renesas, this transaction is a paradigm shift away from its core semiconductors manufacturing ops.
Outsourcing (2427) MBO Situation – Checking, and Thinking, and Noodling, and Speculating
- I got a bunch of questions about my Outsourcing comments yesterday in Outsourcing (2427) – Earnings Delay Causes Consternation.
- This piece is intended to clarify what I know (still limited), put parameters around what it might be, and draw lines in the sand which I might later erase.
- This may be nothing. But it may not be. I will try to answer the questions I received in a kind of Q&A format, and I hope that helps.
Sector ETF Rebalancing with Remarkable Price Impact History: ISC In, Wonik IPS Out
- Will there be changes in April’s rebalancing? With two weeks left, two names are likely. Wonik IPS may be replaced by ISC Co Ltd, given a ₩150B market cap difference.
- In the previous rebalancing, constituent changes had a notable price impact. Despite a passive flow impact of +1.0x ADTV, HPSP and EO Technics saw about a 15% 3-day return.
- Wonik IPS is estimated to receive -4.0x ADTV, while ISC is expected to receive +1.0x ADTV. This is also quite similar to the previous rebalancing.
Japan – Shorts & Positioning on Passive Sells
- BayCurrent Consulting, Open House, Sumitomo Chemical, Koei Tecmo Holdings, Kose Corp, Oji Holdings, Daiwa House Reit Investment and Tosoh Corp will have passive selling at the close on 29 February.
- Short interest has increased on all these stocks over the last few weeks and there has been big underperformance versus the Nikkei 225 Index and TOPIX Index.
- Cumulative excess volume has increased on the stocks and there will be short covering in the last week of the month.
Altium (ALU AU): Renesas (6723 JP) Binding A$68.50 Offer
- Altium Ltd (ALU AU) has entered a scheme implementation deed with Renesas Electronics (6723 JP) at A$68.50 per share, a 33.6% premium to the undisturbed price (14 February).
- The offer will close in 2H, requiring several approvals – FIRB, CFIUS, HSR Act clearance, German Ministry FDI, German Federal Cartel Office clearance, and Turkish Competition Authority.
- The offer price is attractive and 31% above the all-time high, lowering the chance of a competing proposal. At the last close, the gross spread is 3.8%.
Quiddity Leaderboard ChiNext & ChiNext 50 Jun 24: US$313mn One-Way, Four Names with Double-Impacts
- 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 look at the names leading the race to become ADDs and DELs in the June 2024 index rebal event.
Quiddity Leaderboard SSE50/180 Jun 24: US$1.5bn Index Flows One-Way
- SSE 50 and SSE 180, respectively, aim to represent the performance of the 50 and 180 largest and most liquid A-share stocks listed on the Shanghai Stock Exchange.
- In this insight, we take a look at our expectations for potential index changes for SSE 50 and SSE 180 during the June 2024 index rebal event.
- Since my last insight, there have been a couple of changes to our expected ADDs basket and a couple of changes to our expected DELs basket for the SSE180 index.
Ansarada (AND AU): Datasite’s Binding A$2.50 Offer
- On 13 February, Ansarada Group Ltd (AND AU) entered a scheme implementation deed with Datasite. The offer price is A$2.50 per share, a 19.0% premium to the undisturbed price (12 February).
- The offer requires FIRB approval along with shareholder approval of the inter-conditional scheme and carve-out transaction.
- The offer price is reasonable and marginally short of the all-time high. At the last close and for an early June close, the gross/annualised spread is 2.5%/8.3%.
Vitol/Saras: Time to Bid Farewell
- The Morattis have agreed to sell their 40% stake in Saras SpA (SRS IM) to Vitol at €1.75/share (implied equity value €1,664 million), which will trigger a mandatory takeover offer.
- Saras has only an asset, the largest refinery in Italy, based in Sardinia, which should add scale to Vitol. At 12.5x Fwd P/E, the offer represents a premium to peers.
- Considering the unimpressive stock market performance of Saras since listing, and potential Trafigura overhang, it’s a good time to cash in. Spread is 1.54%/8.58% (gross/annualised, assuming settlement by 23 April). Long.
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