In today’s briefing:
- Toshiba – Realistic Valuation Disappoints Markets
- Golden Energy & Resources (GER SP)’s Lacking Offer from the Widjaja Family
- Super High Premium Buyout for Totoku Electric (5807) By Carlyle
- Origin Energy (ORG AU): Indicative Proposal from Brookfield & MidOcean; Index Implications
- PB Fintech (Policy Bazaar) Lockup Expiry – US$1bn+, Stock Down 60% but Everyone Is in the Money
- Nexon Q3 In-Line-Ish, Underperformance Achievement Unlocked, Buyback Language Odd
- Uzabase (3966) Agrees to Carlyle Takeover
- Axis Bank (AXSB IN): Last of the SUUTI Selldown Removes Overhang
- Perpetual Rejects EQT/BPEA/Regal’s Revised Offer But Seeks Pendal Merger Delay
Toshiba – Realistic Valuation Disappoints Markets
- The Nikkei reported on Monday that JIP’s bid values Toshiba at roughly ¥2.2trn.
- The stock has dropped to a level just below this valuation suggesting some anticipation of a Bain/JIC bid above that valuation.
- While that is plausible, the cautiousness of JIP’s bid highlights the fundamental downside risk here in our view.
Golden Energy & Resources (GER SP)’s Lacking Offer from the Widjaja Family
- Golden Energy & Resources (GER SP)‘s proposal from the Widjaja family – The distribution proposal (1.3936 GEMS share per share or IDR5,500 per GEMS share) and the delisting proposal (S$0.160).
- For minorities, the good news is that the distribution share ratio is in line with the control ratio and offers are at a premium to historical share prices/multiples.
- The bad news is that the distribution cash alternative is unattractive and the delisting offer values GEAR at a discount to the Stanmore Coal (SMR AU) stake adjusted for debt.
Super High Premium Buyout for Totoku Electric (5807) By Carlyle
- Yesterday, Carlyle announced a buyout of Totoku Electric (5807 JP) at ¥5,660/share, which was a cool 155% premium to Tuesday’s close of ¥2,215. The stock was limit up today.
- It will be limit up tomorrow, and the next day. And probably the next day.
- This is a very interesting outcome. But it is actually not as expensive as it “looks.”
Origin Energy (ORG AU): Indicative Proposal from Brookfield & MidOcean; Index Implications
- A Brookfield/MidOcean consortium has made a conditional, non-binding, indicative proposal to acquire 100% of the shares in Origin Energy (ORG AU) at A$9/share in cash.
- The offer values Origin Energy (ORG AU)‘s equity at A$15.5bn and is a 54.9% premium to the last close. The premium is over 50% even using longer term VWAPs.
- There will be changes to the S&P/ASX family of indices to maintain the number of index members. We will know more once an indicative timeline is published.
PB Fintech (Policy Bazaar) Lockup Expiry – US$1bn+, Stock Down 60% but Everyone Is in the Money
- In Nov 2021, PB Fintech raised around US$793m in its India IPO, via selling a mix of primary and secondary shares. The lock-up on its pre-IPO shareholder will expire soon.
- The company operates two platforms: Policybazaar operates in India’s online insurance product and service industry; and Paisabazaar platform operates in India’s online credit industry.
- In this note, we will talk about the upcoming lockup expiry.
Nexon Q3 In-Line-Ish, Underperformance Achievement Unlocked, Buyback Language Odd
- Nexon (3659 JP) reported Q3 earnings and full-year forecasts today. Revenue came in at the bottom end of August guidance, despite the higher-than-forecast USD/yen rate.
- The forecast for full-year is below consensus. This may be seen as disappointing. The stock may fall on this.
- But a buyback announcement and relative valuation suggests time to cover the short.
Uzabase (3966) Agrees to Carlyle Takeover
- Carlyle has launched a bid for business news and data service owner Uzabase Inc (3966 JP). The bid is far below the price of a couple years ago.
- But the price clears the 2022 high by 1 tick. Some will be OK with this, but some may not be.
- At a 72% premium, optically it appears attractive, but given circumstances, it is not a total knockout, though I don’t know who would come in.
Axis Bank (AXSB IN): Last of the SUUTI Selldown Removes Overhang
- The Administrator of the Specified Undertaking of the Unit Trust of India (SUUTI) is offering 46.53m shares of Axis Bank Ltd (AXSB IN) at a floor price of INR 830.63/share.
- This will take SUUTI’s stake in Axis Bank Ltd (AXSB IN) to zero and remove an overhang on the stock.
- Coming in close to Bain’s partial stake sale last week, the stock could trade heavy. But Axis Bank Ltd (AXSB IN) still trades cheaper than peers.
Perpetual Rejects EQT/BPEA/Regal’s Revised Offer But Seeks Pendal Merger Delay
- Perpetual Ltd (PPT AU) has announced – and subsequently rejected – a revised non-binding proposal from EQT/BPEA/ Regal Partners (RPL AU) of A$33/share, up from the initial Offer of $30/share.
- PPT factored in the value, high conditionality, transaction, and execution risks, and determined the proposal was not in the best interests of shareholders.
- Against PPT’s request for a delay, Pendal (PDL AU) will proceed to the first court hearing for this week to convene a Scheme Meeting, which may occur in mid-December.
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