In today’s briefing:
- TOPIX Inclusions: Who Is Ready (Feb 2025)
- Quiddity Leaderboard NIFTY Mar 25: Final Expectations; Expected DELs Could Underperform Index
- WellNeo Sugar (2117) To Buy Toyo Sugar (2107) – Too Cheap, No Synergies Paid, but Too Small
- A Partial Tender Offer of Englewood Lab by Cosmecca Korea
- Making a Call on when Samsung’s Financial Arms Will Drop Their Value-Up Announcements
- NIFTY50 Index Rebalance Preview: Adds Secure; Tight Among the Deletes
- Crooz Sells Online Mall Business to Korea’s Nugu
- Ecopro Materials Block Deal Timing Closing In: Breaking Down the Situation
- CPPTL Real Estate Trust Liquidation: Potential 28-45% Upside Amid Portfolio Sale
- Paragon 28 Acquisition by Zimmer Biomet: Evaluating the Free CVR Opportunity and Growth Potential
TOPIX Inclusions: Who Is Ready (Feb 2025)
- 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.
- Japan Eyewear Holdings (5889 JP) and Core Concept Technologies Inc (4371 JP) continue to be in our watchlist of pre-event candidates for TOPIX Inclusions.
- Separately, the TOPIX Liquidity factor removal event will take place in April 2025 and there could be some positive index flows for Tokyo Metro (9023 JP) during this event.
Quiddity Leaderboard NIFTY Mar 25: Final Expectations; Expected DELs Could Underperform Index
- NIFTY 50 represents the 50 largest stocks listed in the National Stock Exchange (NSE) of India and the NIFTY Next 50 index tracks the next 50 largest names.
- In this insight, we are presenting our final expectations for ADDs and DELs for the March 2025 index rebal event.
- We see two changes for NIFTY 50 and four changes for NIFTY 100. We expect the results to be announced in the next few days.
WellNeo Sugar (2117) To Buy Toyo Sugar (2107) – Too Cheap, No Synergies Paid, but Too Small
- WellNeo Sugar (2117) today announced a deal to buy Toyo Sugar Refining (2107 JP) at a 27% premium. This is a small ¥11bn deal where insiders own 45%.
- Normally I wouldn’t even talk about a deal this small but this one has something going for it. Two things actually.
- And readers will have to read all the way down to the conclusions to find out the key one, but the setup is that it is too cheap.
A Partial Tender Offer of Englewood Lab by Cosmecca Korea
- On 6 February, Cosmecca Korea (241710 KS) launched a partial tender offer on Englewood Lab (950140 KS).
- Cosmecca Korea announced that it plans to purchase 11% (2.185 million) of Englewood Lab’s outstanding shares at the tender offer price of 10,000 won.
- It appears that this partial tender offer is an attempt by Cosmecca Korea to increase its stake in Englewood Lab even further, capitalizing on the lower share price.
Making a Call on when Samsung’s Financial Arms Will Drop Their Value-Up Announcements
- Samsung Life’s value-up disclosure: we should expect it with Q4 earnings on the 20th—every local desk and media outlet is eyeing that date.
- Unlike Samsung Life, Samsung Securities is tight-lipped. Earnings are set for Feb 14, but expect the value-up announcement after Feb 20, likely before early March and AGM season.
- Tomorrow’s unlikely for Samsung Card’s value-up disclosure. It’s holding off until the card fee recalculation is finalized—likely after February or before mid-March, ahead of AGM season.
NIFTY50 Index Rebalance Preview: Adds Secure; Tight Among the Deletes
- Following their inclusion in the F&O segment in November, Zomato (ZOMATO IN) and Jio Financial Services (JIOFIN IN) appear to be sure-shot inclusions to the NIFTY Index in March.
- Bharat Petroleum Corp (BPCL IN) is a certain deletion from the index. Britannia Industries‘ average free-float market cap is less than 0.004% below Hero Motocorp‘s. It’s very close.
- Passive trackers need to trade between 3.7-11.8 days of ADV on the stocks. The impact increases significantly to between 8.4-21.8 days of delivery volume to trade on the stocks.
Crooz Sells Online Mall Business to Korea’s Nugu
- Crooz’s Shop-list.com used to be one of the fastest growing online fashion malls in Japan but, just before Covid, it hit a wall and hasn’t recovered since.
- Now it will be merged with Korean fashion mall, Nugu, and its real value as a database of young female consumers will become clear.
- This should help Nugu grow to GTVs of ¥100 billion from Japan alone but will leave Crooz as a small bit player in digital services.
Ecopro Materials Block Deal Timing Closing In: Breaking Down the Situation
- Yoon Kwan’s appeal won’t change much—it’s just stalling. His tax uncertainty is now priced in, so the reason to delay selling his EcoPro M stake is quickly fading.
- The BRV block deal won’t follow the new pre-disclosure rule, as Yoon’s likely to classify BRV as a financial investor, so no one-month heads-up.
- The deal’s likely in 2-3 weeks; volume will spike 2-3 days before. Once we catch the signals, it’s time to position for the EcoPro M block trade.
CPPTL Real Estate Trust Liquidation: Potential 28-45% Upside Amid Portfolio Sale
- CPPTL, a real estate trust, is liquidating 121 JC Penney-leased properties, potentially offering 28%-45% upside by 2025.
- Major shareholders, primarily former JC Penney creditors, own 70% of CPPTL shares, indicating potential eagerness to exit.
- CPPTL properties are marketed with Newmark; initial offers expected by February 26, targeting 7%-8% cap rates.
Paragon 28 Acquisition by Zimmer Biomet: Evaluating the Free CVR Opportunity and Growth Potential
- Paragon 28 is being acquired by Zimmer Biomet for $13/share in cash plus a non-transferable CVR tied to 2026 revenue.
- The CVR pays up to $1/share if Paragon’s revenue reaches $361m, requiring a 19% CAGR over two years.
- The merger is supported by management and faces minimal regulatory hurdles, with DaCosta incentivized to achieve CVR targets.
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