In today’s briefing:
- The Biggish Sep 2024 “Thursday-Friday Trade”
- REA’s Improved Terms For Rightmove
- Why MBK’s Move into Local Hostile Takeover Scene Matters: Focus on SK Inc and Lotte Corp
- What Are Locals Saying About Potential Allies to Choi Family in Fight for Korea Zinc?
- NSL Ltd (NSL SP): YTL’s Unconditional Offer
- REA/Rightmove: Third Proposal Seems Close to Fair Value
The Biggish Sep 2024 “Thursday-Friday Trade”
- Every year it’s the same trade. This year it is Thursday and Friday. There is some funkiness to Monday too.
- There is meaningful directional buying on one day, which then kind of gets stretched a bit. This year, circumstances suggest high confidence buying should be at the top end.
- This year, because circumstances, I expect the trade is a lot larger than last year. I’d say ¥1.6trln.
REA’s Improved Terms For Rightmove
- Rightmove PLC (RMV LN), UK’s largest real estate portal, has twice rejected REA Group Ltd (REA AU) cash/scrip non-binding Offers this month.
- REA has upped terms to 341 pence + 0.0422 new REA shares per Rightmove share, or 770p/share, a 39% premium. If completed, Rightmove’s shareholders would own ~20.1% of the MergeCo.
- Thrice rejected? I think Rightmove should engage. REA also has until the 30th September to make a formal Offer. Or walk away.
Why MBK’s Move into Local Hostile Takeover Scene Matters: Focus on SK Inc and Lotte Corp
- The new 100% mandatory tender offer rule could push buyers to lower premiums for major shareholders, potentially increasing hostile takeover attempts as costs get shared with minority shareholders.
- It looks like MBK is eyeing this situation as a chance to redefine their strategy. This really shows how serious MBK is about the Korea Zinc deal.
- Watch for top-tier assets available via hostile takeovers, particularly companies like SK Inc and Lotte Corp, where low shareholder stakes may lead to management conflicts.
What Are Locals Saying About Potential Allies to Choi Family in Fight for Korea Zinc?
- In this insight, we discuss three particular allies that could help the Choi family that have been highlighted by the local media including Hanwha, KIS, and Softbank.
- The Hanwha Group is one of the largest shareholders of Korea Zinc. In addition, Hanwha Group Vice Chairman Kim Dong-Kwan has a close relationship with Korea Zinc Chairman Choi Yoon-Beom.
- Korea Zinc is planning to hold an important press conference on the 24 September to reveal its position on the tender offer of Korea Zinc shares by MBK.
NSL Ltd (NSL SP): YTL’s Unconditional Offer
- Back on the 23rd July, YTL Cement entered into a S&P agreement with 98 Holdings to acquire a 81.24% stake in building material manufacturing/supplier NSL Ltd (NSL SP) at S$0.75/share.
- Pre-Conditions are now satisfied, and YTL Cement has launched a mandatory unconditional cash Offer. The Offer price is also S$0.75/share.
- Super straightforward deal. And will trade tight to – or through terms. YTL’s intention is to maintain NSL’s listing.
REA/Rightmove: Third Proposal Seems Close to Fair Value
- The Board of Rightmove PLC (RMV LN) will consider REA Group Ltd (REA AU)‘s third proposal (implied value of 770p/share, 39% premium, 20.4x EV/NTM EBITDA, 28x Fwd P/E).
- Using 21.3x NTM EBITDA (comps) would indicate fair value of 805p, 4.5% increase to current offer, implying 29.3x P/E, although proforma leverage would increase to 3.6x.
- REA has not stated that the offer is final. Rightmove investors and Board may require further persuasion, as the implied probability of deal success is just 58%.
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