In today’s briefing:
- Shinko Electric (6967) Takeover: Initial Break/Gap Risk Analysis
- Whitebox Goes Activist on Samsung C&T
- Vinda (3331 HK): Tanoto’s Firm Offer
- Quiddity Leaderboard STAR 50 Mar 24: Four High-Impact Changes Likely; Some Interesting Trade Ideas
- Toyo Construction (1890 JP): Déjà Vu as YFO’s Proposal Rejected
- Volpara Health/Lunit: Bosom Buddies
- Volpara Health (VHT AU): Lunit’s Binding A$1.15 Offer
- EQD | ULTRAOVERBOUGHT APAC Markets, SHORT Targets
Shinko Electric (6967) Takeover: Initial Break/Gap Risk Analysis
- The JIC Deal for Shinko Electric Industries (6967 JP) has been announced and is, as expected, trading wide.
- There is FUD. There are Flows. Just like JSR (4185). Some of that FUD can be explained by “gap risk” on deal break…. or can it? We look at risks.
- There’s more positioning risk than fundamental risk at this point. And the FUD and Flows have specific timing in this case which makes thing different than JSR. Worth thinking about.
Whitebox Goes Activist on Samsung C&T
- On 14 December, it was reported that US based Whitebox Advisors has started an activist campaign on Samsung C&T (028260 KS).
- Whitebox estimates that Samsung C&T’s stock price is about 68% undervalued compared to its NAV.
- In addition to Whitebox, there are two other foreign investors including Palliser Capital and City of London Investment Management that have requested Samsung C&T to improve corporate governance.
Vinda (3331 HK): Tanoto’s Firm Offer
- Back on the 27 April, personal hygiene play Vinda International (3331 HK) announced its controlling shareholder Essity (ESSITYB SS) would commence a strategic review of its 51.59% ownership.
- That spurred, allegedly, a variety of suitors including Brazil’s Suzano, the world’s largest hardwood pulp producer, Bain Capital, CVC Capital, DCP Capital, and Indonesia’s Tanoto family.
- And the Tanoto’s have now emerged with a HK$23.50 pre-conditional Offer. The key risk is PRC regulatory approval . Elsewhere, this is a done deal.
Quiddity Leaderboard STAR 50 Mar 24: Four High-Impact Changes Likely; Some Interesting Trade Ideas
- STAR 50 Index is a tech-focused, blue-chip index in Mainland China which tracks the top 50 largest and most liquid names in the STAR market of the Shanghai Stock Exchange.
- In this insight, we take a look at our expectations for potential ADDs and DELs for the STAR 50 index during the March 2024 index rebal event.
- There could be up to four index changes. Some of these are high-conviction changes and some are low-conviction changes.
Toyo Construction (1890 JP): Déjà Vu as YFO’s Proposal Rejected
- The Toyo Construction (1890 JP) Board has opposed YFO’s potential tender offer price of JPY1,255 per share but has kept the door open for an improved offer.
- YFO is running out of options as a YFO candidate-heavy special committee opposed its proposal, and the share price is trading through terms.
- YFO has three options: a hostile offer at an unchanged price, an improved price, or exit its position. Each option has issues suggesting a lack of short-term share price support.
Volpara Health/Lunit: Bosom Buddies
- Volpara Health (VHT AU), which makes software enabling the early detection of breast cancer, has announced it has entered into a Scheme Implementation Deed with South Korea’s Lunit (328130 KS).
- Lunit is offering Volpara shareholders A$1.15/share, in cash, a 47.4% premium to last close. Cornerstone investors with 25.92% of shares out are supportive. As is Volpara’s board.
- The Scheme Meeting is expected to be held in 2Q24. The transaction requires NZ’s OIO approval.
Volpara Health (VHT AU): Lunit’s Binding A$1.15 Offer
- Volpara Health Technologies (VHT AU) has entered a scheme implementation deed with Lunit (328130 KS) at A$1.15 per share, a 48.4% premium to the undisturbed price of A$0.775 (13 December).
- The offer is subject to several conditions, such as shareholder and OIO approval. Irrevocables and directors represent 33.30% of outstanding shares.
- Barring a competing offer, this is a done deal, as the offer is attractive. At the last close and for the end of May payment, the gross/annualised spread is 5.0%/11.6%.
EQD | ULTRAOVERBOUGHT APAC Markets, SHORT Targets
- 3 main APAC markets (Nifty, Kospi 200 and ASX200) are very OVERBOUGHT.
- A WEEKLY pullback (1 week down) is expected this coming week, or the next.
- The pullback should be short-lived and last just 1 week, then the rally should resume.
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