In today’s briefing:
- StubWorld: Mickey Upstages Keisei Electric
- MSCI Feb 2023 QCIR Preview: Potential Changes as Review Period Ends
- Toshiba (6502) – Funding Mostly Secured, Still, Again, Maybe. Or Maybe Not. Or Not.
- Sembcorp Marine-Keppel O&M Merger Circular Squeaks In Under The Wire – Next Steps
- Toshiba (6502 JP): Financing Deadline Slips Again as the 3Q Update Looms
- Dufry/Autogrill: Deal Progress
- ActivistTalk: Bed Bath & Beyond at Death’s Door
StubWorld: Mickey Upstages Keisei Electric
- Keisei Electric Railway Co (9009 JP) is trading “cheap” as Oriental Land (4661 JP) enjoys a zero-Covid revival.
- Preceding my comments on Keisei/Oriental Land, are the current setup/unwind tables for Asia-Pacific Holdcos.
- These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.
MSCI Feb 2023 QCIR Preview: Potential Changes as Review Period Ends
- The review period for the February Quarterly Comprehensive Index Review (QCIR) of the MSCI indices ended yesterday. There will be a number of changes in the Asia Pacific region.
- Most of the inclusions are in China and the country weight in the MSCI Emerging Markets Index should increase leading to outflows from other markets.
- On average, the potential adds have outperformed the potential deletes over the last few weeks. At a glance, pre-positioning appears to be lighter than in the past.
Toshiba (6502) – Funding Mostly Secured, Still, Again, Maybe. Or Maybe Not. Or Not.
- The original bid was supposed to be presented fully-funded by 30 September 2022. Then it was early November, then late November, then early December, late Dec, early Jan, end Jan.
- Today we find out that The Banks and The Preferred JIP Bidding Consortium will aim to reach agreement by 3 Feb. The Bloomberg article details are newish, and odd.
- Shares have deteriorated and vs Peers, they are at their lowest point in many months. And the details do not make me confident this deal is clean yet.
Sembcorp Marine-Keppel O&M Merger Circular Squeaks In Under The Wire – Next Steps
- Last Friday, Sembcorp Marine (SMM SP) announced it had Approval-In-Principle for its Proposed Combination with Keppel Corp (KEP SP), contingent on the Circular being despatched by 31 January 2023.
- At 6:50pm local time on 31 January, Sembcorp Marine released its 679-page Circular (and EGM Announcement (16 Feb EGM)). Phew!
- Now we have a deal in sight, we have to think about next steps. SMM NEWCO needs a story vs flow. Orderbook is nice but may not cut it near-term.
Toshiba (6502 JP): Financing Deadline Slips Again as the 3Q Update Looms
- Bloomberg reports that Japan Industrial Partners (JIP), the preferred bidder, has again extended the deadline for securing bank financing of around JPY1.2 trillion (US$8.8 billion).
- A new issue has pushed the deadline to 3 February. If JIP manages to secure financing for an offer of around JPY5,100, the next challenge is securing Board support.
- The 3QFY2022 update on 14 February needs to avoid further downgrades to keep the deal alive. Toshiba’s multiples are unattractive to peers. Remain on the sidelines for now.
Dufry/Autogrill: Deal Progress
- The deal is done with the transfer of Edizione’s 50.3% stake in Autogrill under way, and with all main hurdles cleared. Dufry must launch and offer to buy out minorities.
- Autogrill shares closed at €6.698 on 30 January, also the implied value of the 0.158 Autogrill/Dufry share swap is 5.8% above the €6.33/share “initial” cash offer. The market expects more.
- The deal will not fall through but the price is still being negotiated, possibly around €6.8-6.9/share. The issue will now become what dilution/leverage will Dufry’s patient shareholders endure.
ActivistTalk: Bed Bath & Beyond at Death’s Door
- Bed Bath & Beyond (BBBY US) , the one-time iconic US homes good retailer, whose financial condition has continued to deteriorate rapidly, is barreling towards bankruptcy sooner rather than later
- A default notice on one of its primary credit facilities has been served and failure to make a bond interest payment on Feb 1 could well seal its fate
- There may not be any money left for its equity holders to recover which means there is a real prospect of the BBBY share price moving rapidly to zero
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