In today’s briefing:
- Seven & I Holdings (3382 JP): Evaluating the Potential MBO
- Amcor Ltd/Berry Global: Packing Them In
- [JAPAN ACTIVISM] Exedy (7278) – Immediate Results Reaction Was a Damp Squib, But Climbing Now
- Even in Japan, Significant Growth Potential for Seven Eleven and Other CVS
- Kadokawa (9468 JP): Take Profits as a Sony Privatisation Rumours Surface
- Quiddity Leaderboard HSIII: ~US$160mn One-Way Flows in Dec 24; 3 ADDs/DELs in Mar 25 Likely
- Quiddity Leaderboard Hang Seng Biotech Dec 24: Positive Flows for Beigene and Innovent Biologics
- NIFTY200 Momentum30 Index Rebalance Preview: More Changes with New F&O Stocks
- ₩200B Gov-Run Value-Up Fund Starts Buying Tomorrow, with Another ₩300B Set for Year-End
- CM Hi-Tech (2115 HK): 12th December Shareholder Vote
Seven & I Holdings (3382 JP): Evaluating the Potential MBO
- Seven & I Holdings (3382 JP) did not dispute the NHK article’s claims that the founding family aims to raise buyout funds by the end of the fiscal year.
- Since 13 November, there have been conflicting press reports on the MBO offer price. The NHK article’s implied offer price of JPY3,082 seems the most credible.
- The MBO’s aggressive completion timeline pressures Alimentation Couche-Tard (ATD CN) to respond by either overbidding, working with the founding family at the back-end or walking away.
Amcor Ltd/Berry Global: Packing Them In
- Packing giants Amcor Limited (AMCR US/AMC AU) and Berry Global Group (BERY US) announced they will combine in an all-stock transaction, with a ~63%/37% ownership split (respectively) in the MergeCo.
- Amcor will issue 7.25 Amcor shares for each Berry share, for a US$73.59/share implied price. US$650mn of benefits from identified cost, growth and financial synergies by end of third year.
- Closing, subject to shareholder and reg approvals, is targeted in the middle of 2025. The transaction has been unanimously approved by the boards of both Amcor and Berry.
[JAPAN ACTIVISM] Exedy (7278) – Immediate Results Reaction Was a Damp Squib, But Climbing Now
- I wrote last when Exedy was at ¥3,900 and had just announced, good earnings, a sharp div hike, and a huge buyback. The stock reacted well, but not THAT well.
- Murakami-San had indeed lifted his stake, and the stock is now climbing again. Presumably, the company is in the market buying. At this price, it depends on what Murakami-san does.
- Fat div. Lots of volume to buy in the next several months, but the big story is future measures.
Even in Japan, Significant Growth Potential for Seven Eleven and Other CVS
- Seven Eleven’s future usually gets outlined as: Japan ex-growth and only growth is overseas. This is wrong. While the CVS sector is saturated, Seven Eleven itself has not reached saturation.
- There are major areas of growth, both territorially and new offshoot businesses. Seven is already 32% more efficient than Lawson but more to come.
- Here we take a deep dive into the state of CVS retailing in Japan and how Seven Eleven does, and will, fit into this – and how it will grow.
Kadokawa (9468 JP): Take Profits as a Sony Privatisation Rumours Surface
- Kadokawa Dwango (9468 JP) shares rose 16% after Reuters reported that Sony Corp (6758 JP) is in talks to acquire it. Kadokawa confirmed an initial letter of intent.
- The privatisation interest is unsurprising as Kadokawa’s publishing arm, acclaimed intellectual properties, and positioning in the anime industry would be attractive to Sony.
- The upside is limited as the last close reflects a significant takeover premium. There is a risk if a binding proposal emerges, it could be takeunder like Bain/T-Gaia.
Quiddity Leaderboard HSIII: ~US$160mn One-Way Flows in Dec 24; 3 ADDs/DELs in Mar 25 Likely
- The Hang Seng Internet & IT (HSIII) index represents the top 30 stocks related to internet and information technology businesses listed in Hong Kong (HKEX).
- The indicative weights for the December 2024 index rebal event will be announced later this week on Friday 22nd November 2024.
- In this insight, we take a look at our updated flow estimates for December 2024. Separately, we have also presented our latest March 2025 index review predictions.
Quiddity Leaderboard Hang Seng Biotech Dec 24: Positive Flows for Beigene and Innovent Biologics
- The HS HK-Listed Biotech Index (“Hang Seng Biotech Index”) represents the 50 largest biotech companies listed in Hong Kong (HKEX).
- The official index changes and indicative weights for the December 2024 index rebal event will be announced on Friday 22nd November 2024.
- In this insight, we take a look at our updated flow expectations.
NIFTY200 Momentum30 Index Rebalance Preview: More Changes with New F&O Stocks
- There could be 17 changes for the Nifty200 Momentum 30 Index that will be implemented at the close on 30 December. Some changes from earlier following 45 new F&O stocks.
- If all changes are on expected lines, one-way turnover is estimated at 61.5% and that will result in a one-way trade of INR 63.4bn (US$752m).
- The potential inclusions to the index have outperformed the potential deletions since the start of June. This trend could continue for a couple of weeks till the changes are announced.
₩200B Gov-Run Value-Up Fund Starts Buying Tomorrow, with Another ₩300B Set for Year-End
- The larger-than-expected Value-Up fund will drive passive flows surpassing the KRX 300 in both size and speed.
- Value-Up ETFs’ AUM is ₩636.5B, with retail dominating. Major institutions, like pensions, are on standby, but passive flows could hit ₩1.5T post-Dec 20 rebalancing.
- Single-Stock setups may not fit, but for alpha-seeking Value-Up strategies, focus on names with higher passive impact from the boosted AUM.
CM Hi-Tech (2115 HK): 12th December Shareholder Vote
- Back on the 14th October, cleanroom play CM Hi-Tech (2115 HK) announced a pre-conditional Offer by way of a Scheme from MayAir Technology (688376 CH) and CM Hi-Tech’s senior management.
- The pre-conditional long stop for NDRC, Mofcom and SAFE was 60 days, which appeared highly optimistic. I was wrong, and the pre-cons were secured in a legendary 18 days.
- The Scheme Doc is now out, with a Court Meeting to be held on the 12 December. Expected payment on the 15 January. The IFA says fair & reasonable.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
