In today’s briefing:
- T-Gaia (3738 JP) – Possible Premium Takeout Story
- Unlocking Value: SEBI’s New Special Call Auction Mechanism Explained
- Chronic Insider Trading in the Korean Tender Offer Market & Time Positions for Short-Term Targets
- Henlius (2696 HK): Fosun Pharma’s HK$24.60 Offer at Around Half the IPO Price
- Best World (BEST SP): EGM Vote on 19 July
- Quiddity Leaderboard SSE50/180 Dec 24: Some Expected DELs Could Underperform Peers
- Quiddity Leaderboard ChiNext & ChiNext 50 Dec 24: Expected ADDs Could Outperform Expected DELs
- Henlius Biotech (2696 HK): Fosun Pharma’s “Fair” Offer
- Carlsberg/Britvic: Awaiting a Third Proposal
T-Gaia (3738 JP) – Possible Premium Takeout Story
- I kind of hate this, but I also can’t ignore it. Apparently, an expensive media service Reporting on Deals or about the Market for Mergers, had an article today.
- Bloomberg carried a small blurb saying there was “speculation on a tender offer…. according to traders”. The stock is untraded, limit up.
- The most informative comment comes from Japanese stock market portal ‘kabutan‘ which suggests “overseas media” thinks Sumitomo Corp will sell its shares. I look at the possibilities below.
Unlocking Value: SEBI’s New Special Call Auction Mechanism Explained
- SEBI introduced the SPECIAL CALL AUCTION framework for Listed Holding Companies to unlock the value.
- The first special call auction is set to take place in October.
- Some companies are trading at a discount of more than 50% or even 80%, post this framework, shares will be traded at fair value.
Chronic Insider Trading in the Korean Tender Offer Market & Time Positions for Short-Term Targets
- There is a high likelihood of information leaking through the lead securities firm when the tender offer prospectus is provided to branches about three days before the disclosure.
- With the FSS’s stricter stance, tender offer candidates may act swiftly before new regulations, prompting attention to potential surges in tender offers.
- Our approach is clear: identify short-term tender offer candidates, monitor trading volumes for spikes, and use the three-day pre-disclosure surge to time our positions effectively.
Henlius (2696 HK): Fosun Pharma’s HK$24.60 Offer at Around Half the IPO Price
- Shanghai Henlius Biotech (2696 HK) disclosed a pre-conditional privatisation offer by Shanghai Fosun Pharmaceutical (Group) (2196 HK) at HK$24.60, a 36.7% premium to the undisturbed price. The offer price is final.
- The key condition is approval by at least 75% of independent H Shareholders (<10% of all independent H Shareholders rejection). There is no minimum acceptance condition.
- Long term investors will be unimpressed as the offer is half the HK$49.60 IPO price. However, shareholders with blocking stakes should be supportive partly because of the share alternative option.
Best World (BEST SP): EGM Vote on 19 July
- The Best World International (BEST SP) IFA considers the S$2.56 exit offer fair and reasonable as it is towards the upper end of its S$1.36-2.69 per share valuation range.
- The key conditions are approval for the selective capital reduction (at least 75% of eligible shareholders) and delisting resolution (a majority holding not less than 75% in value).
- The lack of activists, IFA supporting recommendations, and no competing offer suggest a done deal. At the last close, the gross spread was 2.8%.
Quiddity Leaderboard SSE50/180 Dec 24: Some Expected DELs Could Underperform Peers
- SSE 50 and SSE 180, respectively, aim to represent the performance of the 50 and 180 largest and most liquid A-share stocks listed on the Shanghai Stock Exchange.
- In this insight, we take a look at the names leading the race to become ADDs and DELs during the December 2024 index rebal event.
- We currently estimate one-way flows to be US$1.4bn and US$235mn for the SSE 50 and 180, respectively.
Quiddity Leaderboard ChiNext & ChiNext 50 Dec 24: Expected ADDs Could Outperform Expected DELs
- The ChiNext Index represents the performance of the 100 largest and most liquid A-share stocks listed on the ChiNext Market of the Shenzhen Stock Exchange.
- The ChiNext 50 index is a subset of the ChiNext Index and it consists of the top 50 names in the ChiNext index with the highest daily average turnover.
- We see seven change for the ChiNext index and five changes for the ChiNext 50 index.
Henlius Biotech (2696 HK): Fosun Pharma’s “Fair” Offer
- Shanghai Fosun Pharmaceutical (2196 HK) has made a HK$24.60/share Offer (best & final), in cash, for H-shares not held in Shanghai Henlius Biotech (2696 HK). A scrip alternative may be afforded.
- As Henlius is PRC-incorporated, this Offer is structured as a Merger by Absorption, involving a Scheme-like vote for independent H-shareholders. There is no tendering condition.
- Pre-Conditions include NDRC, MoC, and SAFE. The Long Stop date to secure these conditions is 30th April 2025. That’s way too conservative. This should be wrapped up around mid 4Q24.
Carlsberg/Britvic: Awaiting a Third Proposal
- On June 24, Carlsberg announced that Pepsico had agreed to waive a change of control clause in its bottling deals with Britvic. The current proposal is 1250p (+9.5p interim).
- The offer represents an undemanding 12x EV/fwd NTM EBITDA. My standalone base case fair-value estimate is 1,056p/share. An improved offer could come >1,300p, although 1,420p (13.3x wouldn’t be unreasonable).
- Gross spread to the revised offer is 6.2% (6.9% including interim). Shares are pricing a 72% probability of deal success. I believe Carlsberg will come with an improved offer. Long.
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