In today’s briefing:
- S&P/ASX Index Rebalance Preview: Potential Adds Have Outperformed
- Sanei Architecture Planning (3228 JP): Open House’s JPY2,025 Tender Offer
- Splitit Pursues Split From The ASX
- Tesserent (TNT AU): Scheme Meeting on 18 September
- Quiddity Leaderboard SSE50/180 Dec 22: 5 Changes for SSE50 and 18 Changes for SSE180
- Addressing Misconceptions: Lotte Tour’s Short-Selling Entry Point
- APAC WEEKLY Monitor: Current MRM Supports and Probabilities Re-Cap
S&P/ASX Index Rebalance Preview: Potential Adds Have Outperformed
- We forecast 26 changes across the ASX50 Index, ASX100 Index, S&P/ASX 200 (AS51 INDEX) and ASX300 Index at the September rebalance.
- The review period ends tomorrow, so most changes are high probability. Though there are some changes that will be up to the discretion of the index committee.
- There will be a lot of stock to trade on the changes to the ASX200 and indices higher up the hierarchy. But there will be a lot of pre-positioning too.
Sanei Architecture Planning (3228 JP): Open House’s JPY2,025 Tender Offer
- Sanei Architecture Planning (3228 JP) has recommended Open House (3288 JP)’s tender offer of JPY2,025 per share, an 18.0% premium to the undisturbed price (15 August).
- The transaction is required to facilitate the exit of Mr Koike, the largest shareholder, and satisfy Article 27 of the Tokyo Metropolitan Organized Crime Exclusion Ordinance.
- Irrevocables represent a 64.21% ownership ratio, and the lower limit requires a 6.9% minority acceptance rate. The offer is a reasonable solution to the current predicament.
Splitit Pursues Split From The ASX
- Splitit Ltd (SPT AU) will seek approval from shareholders to delist the Buy Now, Pay Later micro-play from the ASX and redomicile to the Cayman Islands.
- Concurrent with the voluntary delisting proposal, PE outfit Motive Partners will pump in US$50mn in exchange for preference shares – assuming the delisting occurs and certain earnings targets are met.
- This is not an Offer for shares. If delisted, Splitit shareholders will hold scrip in an unlisted private vehicle.
Tesserent (TNT AU): Scheme Meeting on 18 September
- Tesserent Ltd (TNT AU)‘s IE considers Thales SA (HO FP)’s A$0.13 offer fair and reasonable as it is above its valuation range of A$0.098 to A$0.109 per share.
- The offer is subject to FIRB and shareholder approval. New Zealand’s OIO approval suggests that Australia’s FIRB approval should be forthcoming. Pearson’s recent selldown lowers the vote risk.
- At the last close price and for the 4 October payment, the gross and annualised spread is 4.0% and 32.0%, respectively.
Quiddity Leaderboard SSE50/180 Dec 22: 5 Changes for SSE50 and 18 Changes for SSE180
- SSE 50 and SSE180, respectively, aim to represent the performance of the 50 and 180 largest and most liquid A-share stocks listed on Shanghai Stock Exchange.
- Earlier this month, I discussed the historical price and volume performance of SSE 50 and SSE 180 Rebalance events in Quiddity Primer for SSE 50/180/380 Index Rebalance Events.
- In this insight, we take a look at our expectations for potential index changes for SSE 50 and SSE 180 during the December 2023 Rebalance event.
Addressing Misconceptions: Lotte Tour’s Short-Selling Entry Point
- Lotte Tour has emerged as a prominent short-selling target in the Korean market, and there are efforts to use an ₩80B convertible bond (CB) to exploit its dilution/overhang risk.
- Linden Capital and LMR, upon obtaining the CB, promptly borrowed 4.6M shares from Donghwa for short selling. Thus, the CB conversion incentive remains largely unaffected by stock price changes.
- We should avoid synchronizing our entry point with CB conversion. Instead, we should target the likely rights issuance in the latter half of the year, anticipated in the market.
APAC WEEKLY Monitor: Current MRM Supports and Probabilities Re-Cap
- All the APAC markets we cover (Nifty50, HSI, Nikkei225, Kospi200, S&P/ASX200) are pulling back and some of them have been doing so for 3 weeks.
- In this insight we want to offer a re-cap of all the MRM support levels and probabilities for the APAC markets above, after the August 16th Close.
- Check our previously published single-market insights for deeper analysis and related investment ideas: Nifty50, HSI, Nikkei225, Kospi200, S&P/ASX200.
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