In today’s briefing:
- Toshiba (6502) – Funding Definitely Probably Now Secured – Next Steps and Risks
- DTAC/TRUE Merger: Index Flows & Potential SET50 Replacement
- Carlyle 86% Premium ¥4460 TOB on Iwasaki Elec – Probably Light, and Interesting Shareholder Register
- Nissan’s Renault Led Selldown Very Early Look – US$4.3bn Prolonged Overhang or Lack Thereof
- Toshiba – Good News?
- Toyo Construction (1890 JP): YFO and the Board Trading Half-Truths
- SM Entertainment: A Rights Offering & CB Issue to Kakao Corp
- EQD | HSI Index: Buying the Dip Using Options
Toshiba (6502) – Funding Definitely Probably Now Secured – Next Steps and Risks
- On 31 January, the expected “deadline” for a bank loan agreement with the JIP Consortium bidding for Toshiba, we got news that commitment confirmation would be extended to 3 February.
- Every other time we got a deadline extension, we got an article. On 3-6 Feb, we got no article, suggesting we were close. Today, a Bloomberg article says terms agreed.
- That gets us over the biggest hump. Now we have to look at possible next steps and timing.
DTAC/TRUE Merger: Index Flows & Potential SET50 Replacement
- The Total Access Communication (DTAC TB) / True Corp Pcl (TRUE TB) joint shareholder meeting is in two weeks and amalgamation could be completed in the next month or two.
- We forecast inflows to the NewCo from MSCI trackers while there will be no flows from FTSE All-World/All-Cap and Stock Exchange of Thailand SET 50 Index (SET50 INDEX) trackers.
- Srisawad Power 1979 (SAWAD TB) is currently comfortably in the lead to be added to the Stock Exchange of Thailand SET 50 Index (SET50 INDEX) in an ad hoc rebalance.
Carlyle 86% Premium ¥4460 TOB on Iwasaki Elec – Probably Light, and Interesting Shareholder Register
- Carlyle has agreed to do an MBO on Iwasaki Electric (6924 JP) where the existing CEO who is 65yrs old will take a 0.5% stake.
- As a purveyor of specialist industrial lighting, including transition to LED lighting for public space use, the company’s place in the ecosystem is not undesirable. But it isn’t hugely profitable.
- This smallcap takeout at an 86% premium is probably still too light. And the Shareholder Structure is interesting.
Nissan’s Renault Led Selldown Very Early Look – US$4.3bn Prolonged Overhang or Lack Thereof
- With Nissan (7201 JP) and Renault coming to a new arrangement regarding their working relationship, Renault will be left with a US$4.3bn Nissan stake that it will look to sell eventually.
- The selldown will probably take a long while to materialize.
- In this note, we talk about the announcement and take a very early look at the possible selldown.
Toshiba – Good News?
- So JIP appears to have finally secured funding for its tortured Toshiba bid.
- The market is reacting positively and we think this is reasonable but the real question is whether Toshiba management will be amenable to the new terms of JIP’s deal.
- In our view, there are certain quirks regarding recent news flow which point to a potential answer to that question.
Toyo Construction (1890 JP): YFO and the Board Trading Half-Truths
- YFO’s latest press release outlines the key objectives of a revamped Toyo Construction (1890 JP) Board, should its recommended directors get elected at the June AGM.
- YFO’s strategy is to revamp the Board, which should pave the way for its tender offer. YFO’s standstill agreement expires on 24 May and the tender offer starts in late-September.
- The Board could allege that YFO has breached its NDA agreement and re-introduce a poison pill. The Board could look to garner enough support to block YFO’s nominations.
SM Entertainment: A Rights Offering & CB Issue to Kakao Corp
- On 7 February, it was announced that SM Entertainment will conduct a third party rights offering and CB issue to Kakao Corp.
- Post these deals, Kakao Corp will own a 9.05% stake in SM Entertainment.
- The rights offering and the CB issue have all the hallmarks of an intermediate deal prior to an eventual takeover of SM Entertainment by the Kakao Group.
EQD | HSI Index: Buying the Dip Using Options
- HSI Index has paused for breath this month underperforming most other global indices
- The outlook for the region remains strong as reopening strength gains momentum and the Government continue to announce new supportive measures
- We favour a buy the dip strategy and suggest using derivatives to play it
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