In today’s briefing:
- Thinking About Topcon (7732) And the New METI-Enabled Bad Cop-Good Cop Routine
- CPMC (906 HK): Why This Is Still A Buy
- Fosun Tourism (1992 HK): Scheme Buyback at HK$7.80 (95% Premium)
- TOPIX Inclusions: Who Is Ready (Dec 2024)
- Talabat Holding (TALABAT UH): IPO Fast-Entry to Be Delivered with Caution
- Fosun Tourism (1992 HK): Fosun Int’l’s Indirect Takeover
- EQD | The Nikkei’s Wavering Trend: LONG Investors Should Brace For A Pullback.
- Vishal Mega Mart IPO: IPO Details & Index Entry Timing
- StubWorld: Business As Usual As Prosus Sells, & Tencent Buys Back
- CR Sanjiu (000999CH) To Acquire Tasly (600535CH) Update- The Deal Is Proceeding in an Orderly Manner
Thinking About Topcon (7732) And the New METI-Enabled Bad Cop-Good Cop Routine
- A Bloomberg article today said Topcon Corp (7732 JP) is weighing takeover bids received from KKR and EQT. ValueAct has been pressuring the company for 18mos (5+% in May23)
- ValueAct has apparently been pushing the company to divest assets and concentrate on core ops, or go private (and have someone else do it).
- This is further evidence of the METI-enabled “Bad Cop-Good Cop Routine” which could expand M&A and governance activity dramatically.
CPMC (906 HK): Why This Is Still A Buy
- Back on the 29th August 2024, CPMC Holdings (906 HK) announced ORG Technology Co., Ltd. A (002701 CH) had secured SAMR approval. Mofcom and NDRC approvals subsequently followed.
- The pre-condition long stop date is the 6th January. SAFE is the outstanding pre-condition. Separately, Zhang Wei’s 22.01% irrevocable expired on the 5th December – with no HKEx announcement.
- Quite a lot to pack in with 16 business days to the pre-con long stop. Sounding out people involved with the transaction would be ideal. So that’s what I did.
Fosun Tourism (1992 HK): Scheme Buyback at HK$7.80 (95% Premium)
- Fosun Tourism (1992 HK) disclosed a share buyback of the company through a scheme of arrangement at HK$7.80, a 95.0% premium to the last close price of HK$4.00.
- The key condition is the scheme be approved by at least 75% of disinterested shareholders (rejection by <10% of disinterested shareholders).
- The timing is arguably opportunistic, as the shares are down 31% YTD. Nevertheless, the high takeover premium and a potential scrip option lower the vote risk.
TOPIX Inclusions: Who Is Ready (Dec 2024)
- Quiddity’s “Who is Ready” series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.
- Reently-Listed Tokyo Metro (9023 JP), Rigaku Holdings (268A JP), and Intermestic (262A JP) were added to the TOPIX index at the end of November 2024.
- Our long-term pre-event candidate Japan Eyewear Holdings (5889 JP) has applied for a Section Transfer to the Prime Market which means there could be TOPIX Inclusion in the near future.
Talabat Holding (TALABAT UH): IPO Fast-Entry to Be Delivered with Caution
- Talabat Holding (TALABAT UH) is expected to be listed on 10 December 2024, on the Dubai Financial Market at a valuation of ~$10.3bn.
- Fast-Entry is forecasted to be announced for the one Global Index at the close of 10 December and traded on 20 December in conjunction with the review.
- Uncertainty regarding the Fast-Entry arises due to lack of shareholder information in the Institutional Offering which can result in the float market cap being determined as invalid.
Fosun Tourism (1992 HK): Fosun Int’l’s Indirect Takeover
- When Fosun Tourism (1992 HK), a leisure-focused integrated tourism group, was suspended pursuant to the Takeovers Code, the obvious Offeror, by way of a Scheme, was Fosun International (656 HK)
- Not quite. We do have a Scheme, but it’s being enacted by way of a buyback. Fosun Int’l still abstains from voting, but will control 100% if the Scheme completes.
- The Cancellation Price is $7.80/share (not declared final), a punchy 95% premium to undisturbed. I previously speculated a 100% premium was not out of the question. Clean deal.
EQD | The Nikkei’s Wavering Trend: LONG Investors Should Brace For A Pullback.
- The Nikkei 225 Index continues its going nowhere trend: there is a pattern however in what it does and it’s quite repetitive as of lately.
- While we don’t attribute predictive value to chart patterns, we do know that a flat trend sooner or later breaks out.
- Our models see limited upside for the current range-bound mini rally (2 weeks in the making). Next we will have a pullback, and it could happen already after this week.
Vishal Mega Mart IPO: IPO Details & Index Entry Timing
- Vishal Mega Mart (1620871D IN) is looking to list on the exchanges by selling INR 80bn (US$943m) of stock at a valuation of INR 352bn (US$4.15bn).
- Anchor allocations were completed on 10 December, the IPO opens today, and the stock is expected to start trading on 18 December. Grey market premium is around 25%.
- The stock will not get Fast Entry to global indices. Inclusion at regular rebalances should take place in May and June 2025.
StubWorld: Business As Usual As Prosus Sells, & Tencent Buys Back
- For the first time in 2024, Prosus NV (PRX NA) lodges a substantial shareholder notice, as its stake in Tencent (700 HK) dips below 24%.
- Preceding my comments on Prosus, Tencent and Naspers (NPN SJ), 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%.
CR Sanjiu (000999CH) To Acquire Tasly (600535CH) Update- The Deal Is Proceeding in an Orderly Manner
- Based on the new announcement released by CR Sanjiu, due diligence, auditing, evaluation, valuation and verification of material assets reorganization are in progress. Approvals by the SASAC/SAMR haven’t been obtained.
- Sanjiu is now facing performance headwinds due to VBP. So, Sanjiu needs new/stable performance increments to alleviate future performance pressure, and completing the acquisition of Tasly becomes even more urgent.
- China Resources excels in M&As and has strong internal business integration capabilities.We’re optimistic about the future synergies after the merger. Valuation for Tasly is expected to reach P/E of 30.
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