In today’s briefing:
- SATS SP: S$800m Rights Issue to Fund WFS Acquisition
- Japan Post Holdings To Effectively “Re-IPO” Japan Post Bank (7182 JP)
- SATS – The Future Is Cargo so Shareholders Pay the Freight – S$800mm Rights Offer
- Boustead Projects (BOCJ SP): Boustead Singapore’s Final S$0.95 Offer to Call Minorities’ Bluff
- Japan Post Bank Possible Placement – Here We Go Again with the US$9bn Overhang
- Origin Energy (All But) Supports Brookfield/EIG’s Revised Terms
- EQD | Alibaba (BABA US): Playing the Earnings Via Derivatives
- SM Entertainment: Provides a Detailed Analysis of a Strategic Partnership with Kakao
- Nitro Software: Potentia’s Tiered-Bump. Expect Alludo To Cash In
SATS SP: S$800m Rights Issue to Fund WFS Acquisition
- SATS (SATS SP) has announced a 323:1000 underwritten rights issue at S$2.2/share that will raise S$798.8m to fund the WFS acquisition.
- The rights issue price is a 20% discount to the last close and a 15.9% discount to the Theoretical Ex-Rights Price (TERP).
- There has been a lot of short selling on the stock since the start of the year, peaking last week where 43% of total volume traded was from short selling.
Japan Post Holdings To Effectively “Re-IPO” Japan Post Bank (7182 JP)
- Overnight a Reuters article suggested Japan Post Holdings (6178 JP) had started talks to sell a near 30%) stake in Japan Post Bank (7182 JP), the first sale since IPO.
- A sale is designed with two aims: 1) the TSE requires a 35% tradable share ratio, and 2) JPH is supposed to lower holdings in JPB to <50% by 2025.
- This event may include a buyback, and has moving parts, and flows on the back end, but fundamentally a sale would effectively constitute a “re-IPO” of the shares.
SATS – The Future Is Cargo so Shareholders Pay the Freight – S$800mm Rights Offer
- Last September, rumours then an announcement SATS (SATS SP) – a leading inflight catering and gateway service provider – would buy WFS – the world’s largest cargo handler hit shares.
- They expected to pay €1.187bn or S$1.639bn (9.7x EV/EBITDA), primarily through S$1.7bn of new equity, to close in March 2023. In January, it was S$800mm of rights and a loan.
- Shareholder approval came 18 January. Regulatory approvals were received Monday. Closing comes no later than 3 April. Today the company announced a large rights offering.
Boustead Projects (BOCJ SP): Boustead Singapore’s Final S$0.95 Offer to Call Minorities’ Bluff
- Boustead Projects (BOCJ SP)/BPL has disclosed an improved final unconditional offer from Boustead Singapore Limited (BOCS SP) at $0.95 per share, a 5.6% premium to the previous S$0.90 offer.
- In response to SIAS’ call to table a fairer offer closer to 1x P/NAV, Boustead Singapore has marginally increased its offer from 0.71x to 0.75x P/NAV.
- Boustead Singapore’s approach is to call minorities bluff by tabling a “take it or leave it” proposal instead of a fair offer. The shares are currently trading 4.2% above terms.
Japan Post Bank Possible Placement – Here We Go Again with the US$9bn Overhang
- Japan Post Holdings (6178 JP) is looking to trim its stake in Japan Post Bank (7182 JP) by a third, as per Reuters.
- The deal would be worth around US$9bn and could come as soon as next month.
- In this note, we talk about the news and take an early look at the possible selldown.
Origin Energy (All But) Supports Brookfield/EIG’s Revised Terms
- The Brookfield/EIG consortium has reduced its Offer for Origin (ORG AU) to ~A$8.90/share, down from A$9.00/share, after conducting due diligence in the wake of the Aussie government’s gas price intervention.
- Oddly, this revised proposal remains non-binding, suggesting a number of political kinks still need to be ironed out.
- For its part, Origin’s board reckons the revised proposal has the potential to deliver significant value to shareholders, all but guaranteeing board support, assuming a firm Offer unfolds.
EQD | Alibaba (BABA US): Playing the Earnings Via Derivatives
- Alibaba (BABA US) is set to report earnings tomorrow on the 23rd
- Stock has pulled back from the highs but earnings could be the next catalyst to determine direction
- We use the derivatives market to extract market expectations and suggest some suitable trades
SM Entertainment: Provides a Detailed Analysis of a Strategic Partnership with Kakao
- Today (22 February), S.M.Entertainment Co (041510 KS) provided a detailed analysis of the strategic partnership with Kakao from shareholders and fans perspectives.
- The timing of this detailed strategic partnership announcement is a bit unusual since it comes BEFORE the actual tender offer announcement and potential capital injection into SM Entertainment by Kakao.
- Our call on this M&A remains consistent. In the last week of February/early March, Kakao could make a tender offer at prices of at least 140,000/150,000 won, in our view.
Nitro Software: Potentia’s Tiered-Bump. Expect Alludo To Cash In
- After Alludo stated its $2.15/share Offer price was ‘best and final’, even if a superior proposal emerges, the ball was in Potentia’s court to just sneak in above those terms.
- And so they have, with a $2.17/share unconditional Offer for Nitro (NTO AU), increasing to $2.20 if they get to 75% interest, and $2.25 if ≥25% tendering opt for scrip.
- Expect Nitro’s board to announce its unanimous support for Potentia’s revised Offer. Expect Alludo to cash in as tendering nears 75%.
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