In today’s briefing:
- Taking Advantage of Terumo (4543) Weakness And After-Offering Flow
- CSI300 Index Rebalance Preview: Round-Trip Trade Tops US$6bn as ETF Creations Soar
- Exploring Why Samsung Electronics’ Pref Discount Narrowing Took a Sharp Turn Yesterday
- Silverlake Axis (SILV SP): Goh’s Hybrid Offer Now Open
- Dyna-Mac (DMHL SP): Hanwha’s Voluntary Conditional Offer
- Hanwha Galleria Tender Results Are in with No Proration Issue Despite a Fat Spread. What’s Next?
- Puig Brands (PUIG SM): 50/50 Global Index Inclusion for Largest Spanish IPO Since 2015
- Kim Dong-Sun Likely to Purchase More Shares of Hanwha Galleria Post Tender Offer
- Hanwha Group Makes A Move On Dyna-Mac
Taking Advantage of Terumo (4543) Weakness And After-Offering Flow
- Terumo Corp (4543 JP) was able to hang in well after the announcement, up until the day or two before pricing date, then the shares were walloped into Pricing.
- After pricing, they have fallen and erased most of the discount. That’s an opportunity.
- The shares have underperformed Peers, and there is flow to come. This deal was, as advertised, smaller than it first appeared.
CSI300 Index Rebalance Preview: Round-Trip Trade Tops US$6bn as ETF Creations Soar
- There could be 17 changes at the December rebalance with the Industrials sector gaining 3 index spots and the Information Technology sector losing 3 spots.
- We estimate one-way turnover of 2.9% at the rebalance leading to a one-way trade of CNY 21.96bn (US$3.1bn). There are 22 stocks with over 3x ADV to trade.
- Impact on the stocks has increased as creations in ETFs linked to the CSI 300 Index continue. That flow will reverse from the deletions in the next few months.
Exploring Why Samsung Electronics’ Pref Discount Narrowing Took a Sharp Turn Yesterday
- Samsung’s preferred shares lagged significantly behind the common shares yesterday, showing the largest daily sigma move we’ve seen in a while.
- Samsung’s delayed value-up announcement, despite regulatory pressure, has fueled speculation about a potential Biologics stake purchase from C&T.
- It’s time to pause the trade on Samsung’s preferred discount narrowing that I highlighted in early August. The main inflection point will be when Samsung makes its value-up announcement.
Silverlake Axis (SILV SP): Goh’s Hybrid Offer Now Open
- Back on the 26 August, Goh Peng Ooi, the executive chair and founder, made a voluntary unconditional general Offer for the 25.9% in Silverlake Axis (SILV SP) not held.
- The Offer Doc is now out for this S$0.36/share cash Offer. The first close is the 7th October.
- There was no IFA opinion in this Doc. This will appear in the Response Doc within a fortnight. It’ll be interesting how the mixed consideration alternative is assessed. Or not.
Dyna-Mac (DMHL SP): Hanwha’s Voluntary Conditional Offer
- Dyna Mac Holdings (DMHL SP) disclosed a voluntary conditional offer from Hanwha Aerospace (012450 KS) and Hanwha Ocean (042660 KS) at S$0.60, a 21.2% premium to the undisturbed price.
- The offer is conditional on regulatory approval (Competition and Consumer Commission of Singapore) and a 50% minimum acceptance condition.
- The offer is reasonable compared to peer multiples. However, it may face resistance as it is below the recent high of S$0.615 and Dyna-Mac’s improving outlook (S$681 million order book).
Hanwha Galleria Tender Results Are in with No Proration Issue Despite a Fat Spread. What’s Next?
- Hanwha Galleria’s tender offer, led by Kim Dong-sun, closed today with a subscription rate just over 80%, according to the local brokerage after market close.
- Retail investors in small caps like Hanwha Galleria often skip tender offers, hoping for price gains. Kim Dong-sun may try to buy the remaining 10-15% soon, possibly via open-market buys.
- Watch for signs that Kim Dong-sun might go for a second tender to take Galleria private. He might be aiming to avoid taxes and boost his stake’s value.
Puig Brands (PUIG SM): 50/50 Global Index Inclusion for Largest Spanish IPO Since 2015
- Puig Brands (PUIG SM) will be added in SXXP and SXXE at the close of 20 September 2024. Forecasted demand is ~1.6m shares, ~$36m and ~2.7 ADV.
- The security is at risk of failing the fcap threshold hence inclusion in November 2024 due to a recent price drop and a substantial portion of shares outstanding being unlisted.
- The company closely exceeds the minimum public voting rights and its inclusion is expected in December 2024. Forecasted demand is ~4.5m shares, ~$101m and ~7.5 ADV.
Kim Dong-Sun Likely to Purchase More Shares of Hanwha Galleria Post Tender Offer
- The tender offer period for Hanwha Galleria ended on 11 September. Its share price closed down 7.4% but still up 8.2% from its price prior to the tender offer announcement.
- The local media accounts mentioned today that about 80-90% of the shares targeted in this tender offer have been filled.
- If 90% of the tender offer is successful, Kim Dong-Sun’s stake in the company will rise from 2.3% to 18.1%.
Hanwha Group Makes A Move On Dyna-Mac
- Following a Partial Offer for Hanwha Corporation (000880 KS) in July, and Hanwha Galleria (452260 KS)‘s yesterday, the Hanwha Group has now made an Offer for Dyna-Mac (DMHL SP).
- Hanwha Ocean (042660 KS) and Hanwha Aerospace (012450 KS), collectively holding 25.36%, have made a S$0.60/share cash Offer for shares not owned, conditional on a 50% acceptance hurdle.
- Terms are not final for the offshore oil-and-gas contractor. Optically, that’s probably prudent. The Offer also requires Singapore’s competition watchdog signing off.
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