In today’s briefing:
- The Skew in the Tsuruha-Welcia-Aeon Combination
- Know Your Rare Earth Elements As China Restricts Exports
- Horizon Robotics IPO Lockup- US$7bn Expiry with Scattered Shareholding and Lots of CCASS Movement
- Consolidating Yield: LondonMetric’s Possible Offer for Urban Logistics
- A Note-Worthy Exit: Atlas Takes Over De La Rue
The Skew in the Tsuruha-Welcia-Aeon Combination
- Tsuruha Holdings (3391 JP), Welcia Holdings (3141 JP), and Aeon Co Ltd (8267 JP) announced their deal whereby Tsuruha merges with Welcia in December, and Aeon gains control of MERGECO.
- Orbis Investments – owner of 9.7% of shares out – complained. I think with good reason. Tsuruha is trading a little expensive to the ratio, but there’s 7.5mos to go.
- Interestingly, there’s real skew on this trade. It’s not overly complicated, and it is worthwhile thinking about it.
Know Your Rare Earth Elements As China Restricts Exports
- China recently escalated restrictions on the export of rare earths. Not just to the US as the two global players go toe-to-toe on tariffs; but to all countries.
- China’s latest round of restrictions target critical materials used in defense, electronics, and EVs.
- Apart from China, the world’s largest refining – not just the largest miner – who else refines rare earth elements, specifically heavy rare earths?
Horizon Robotics IPO Lockup- US$7bn Expiry with Scattered Shareholding and Lots of CCASS Movement
- Horizon Robotics (9660 HK) raised around US$800m in its Hong Kong IPO in October 2024. The lockup on its pre-IPO investors is set to expire soon.
- Horizon Robotics (HR) is a provider of advanced driver assistance systems (ADAS) and autonomous driving (AD) solutions for passenger vehicles, empowered by its proprietary software and hardware technologies.
- In this note, we will talk about the lockup dynamics and possible placement.
Consolidating Yield: LondonMetric’s Possible Offer for Urban Logistics
- Strategic merger between LondonMetric and Urban Logistics offers scale, diversification, and internal management benefits, with a modest premium to pre-announcement price and meaningful potential for operational synergies and cost savings.
- Scheme of arrangement could complete by July 2025 if approved; long-term investors may benefit from enhanced dividend yield, greater liquidity, and sustained growth in logistics-focused real estate under unified management.
- Long SHED at 138.6p to capture 8.1% gross spread; attractive upside with manageable downside risk and strong board support; reassess on firm offer announcement by 9 May 2025.
A Note-Worthy Exit: Atlas Takes Over De La Rue
- Atlas’s offer for perennial takeover target De La Rue PLC (DLAR LN) is underpinned by a historic brand, strong order book, and post-sale cash buffer, with pension resolution and execution certainty.
- The £263m all-cash bid implies a 12.47x EV/EBITDA multiple, offering shareholders a 130p exit, cum-dividend, strong execution certainty, and over 40% committed shareholder support.
- With 91.7% market-implied completion probability and an annualized return of 4.5% at 128.5p, the deal presents an attractive, de-risked arbitrage opportunity with limited downside and credible upside closure.
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