In today’s briefing:
- Toshiba (6502) – Thinking About the Arb
- Penguin International (PBS SP): Dymon Asia & Co Return with an S$0.82 Unconditional Offer
- Ventia (VNT AU) – Placement Could Lead to ASX200 Inclusion in June
- Oishi Group: Shareholders Back ThaiBev’s Offer
- Chairman Kim Ik-Rae of Daou Kiwoom Group Resigns & Says Sorry – But Is This Enough?
- Providence/Hyve: Scheme Approval
Toshiba (6502) – Thinking About the Arb
- Toshiba is trading at a 12-13% annualised return on the arb when using the expected Tender Offer Start Date proposed in the Takeover Announcement on 23 March 2023.
- On Day 1-2 post-announcement, Toshiba traded at an 11-13% annualised spread. Since the announcement, a 12-name Peer Basket is up 11+% meaning Toshiba back end risk has shrunk.
- Forward consensus EPS ratios have fallen, in part due to the shift forward one fiscal year by comps. We’ll see where those lie in a week when earnings come.
Penguin International (PBS SP): Dymon Asia & Co Return with an S$0.82 Unconditional Offer
- Penguin International (PBS SP) has disclosed a voluntary unconditional offer from Dymon Asia, Executive Chairman and Managing Director at S$0.82 per share, a 15.5% premium to the undisturbed price.
- The offer price is attractive, represents an 8-year share price high, and is shy of the 10-year high of S$0.825. It is also 26.2% higher than the 2021 offer.
- The offeror aims to privatise Penguin. Hitting the 90% compulsory acquisition threshold implies a minority acceptance rate of around 44%, which is eminently achievable due to an attractive offer.
Ventia (VNT AU) – Placement Could Lead to ASX200 Inclusion in June
- Ventia (VNT AU) completed an A$300m placement overnight with Apollo and CIMIC Group Ltd (CIM AU) selling around 14% of the shares outstanding at a small discount to the close.
- The placement will significantly increase Ventia (VNT AU)‘s float and make the stock a high probability inclusion to the S&P/ASX 200 (AS51 INDEX) at the June rebalance.
- We now expect two changes to the S&P/ASX 200 (AS51 INDEX) in June and the impact on the stocks is over 5.5 days of ADV to trade.
Oishi Group: Shareholders Back ThaiBev’s Offer
- Back on the 10th March, Thai Beverage (THBEV SP) launched a Delisting Offer for 79.66%-held Oishi Group (OISHI TB), at THB 59/share, a 26.9% premium to last close.
- This two-step Offer required a shareholder vote followed by a tendering process. Yesterday (the 3rd May), Oishi shareholders approved the Delisting Offer.
- The tendering period may kick off around this time next month, with an expected payment late August.
Chairman Kim Ik-Rae of Daou Kiwoom Group Resigns & Says Sorry – But Is This Enough?
- After the market close today, Kim Ik-Rae (Chairman of the Daou Kiwoom Group) announced his resignation of the Chairman position.
- Chairman Kim mentioned he has not done anything legally wrong. He will donate the entire amount (60.5 billion won) which was gained from selling 1.4 million shares of Daou Data.
- We believe that Kiwoom Securities’ share price could fall additional 10-30% in the next several weeks/months. This could be offset by a large share buyback & cancellation by the company.
Providence/Hyve: Scheme Approval
- Another British company taken over by private equity. On 25 April, Providence sweetened its offer to 121p/share, a 12% increase (22.1x trailing EBITDA; 13.1 EV/Fwd NTM EBITDA).
- On 3 May, all of the resolutions were passed at both Court Meeting and General Meeting. The Scheme Court Hearing is scheduled for 18 May. Settlement should happen on/before 2 June.
- Although there isn’t enough liquidity for large tickets, at 120.4p the spread is 0.5%/6.6% (gross/annualised).
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