In today’s briefing:
- Toshiba – Tendering Now Recommended
- Toshiba (6502 JP): Risk/Reward as Board Unconvincingly Recommends JIP’s Offer
- Toshiba’s Board Buckles Under – As Things Stand, Board Supports and Recommends JIP Offer
- Amman Mineral IPO: Offering Details & Index Inclusion
- Tian An China Investments (28 HK): Trading Halt, Privatisation by Allied Group?
- Merger of PGA Tour, DP World Tour, & LIV Golf – Impact on Fila Holdings and Acushnet
- Liberty/Telenet: Opening of Acceptance Period
Toshiba – Tendering Now Recommended
- Toshiba announced today that its board had shifted stance on JIP’s upcoming tender and would recommend shareholders tender.
- The special committee will review its opinion on the tender offer and based on that the company will offer another opinion when the tender commences.
- Despite peers rising 13-30% since April an offer price increase still looks unlikely.
Toshiba (6502 JP): Risk/Reward as Board Unconvincingly Recommends JIP’s Offer
- Toshiba Corp (6502 JP) Board now recommends shareholders accept Japan Industrial Partners (JIP)’s pre-conditional tender offer of JPY4,620 per share. The Board also effectively rules out a bump.
- The Board unconvincingly recommends the offer in part on the premise that the IFA’s DCF valuation is unrealistic due to punchy forecasts and positive feedback from stakeholders.
- The Board fails to consider that the peers have materially re-rated, the offer’s price ratio remains unattractive and the declining premium of the offer’s implied multiple vs peers’ multiples.
Toshiba’s Board Buckles Under – As Things Stand, Board Supports and Recommends JIP Offer
- In March, when the JIP Offer for Toshiba Corp (6502 JP) was announced, the Toshiba Board supported the Offer but declined, at the time, to recommend it to shareholders.
- “[The price] has clearly not reached the level at which it is possible to recommend to general shareholders that they tender their shares at this time.” That was then.
- 10 weeks later and the Board has a Revised Opinion. It has recommended the Offer for reasons which smack of resignation rather than appropriate deliberation. Investors beware.
Amman Mineral IPO: Offering Details & Index Inclusion
- Amman Mineral Internasional (1416286D IJ) is offering 7.288bn shares in its IPO at a price range of IDR 1650-1775/share to raise between US$808-870m and valuing the company between US$8.08-8.7bn.
- The stock will not get fast entry to global indices or local Indonesia indices (IDX30 Index/ LQ45 Index/ IDX80 Index).
- With listing planned for 5 July, the earliest index inclusion will be in December and there are no near-term passive flows expected for the stock.
Tian An China Investments (28 HK): Trading Halt, Privatisation by Allied Group?
- Tian An China Investment (28 HK) and Allied (373 HK) entered a trading halt “pursuant to The Hong Kong Code on Takeovers and Mergers.” Allied owns 55.72% of Tian An.
- It is likely that Allied Group is seeking to privatise its subsidiary Tian An. Tian An’s other substantial shareholders have a history of sell-downs which facilitate an offer.
- Allied Properties (H.K.) (56 HK)/APL’s partial offer for Tian An in 2011 and Allied’s privatisation of APL in 2020 point to a 20.8%-34.3% premium or HK$5.01-5.57 per share offer.
Merger of PGA Tour, DP World Tour, & LIV Golf – Impact on Fila Holdings and Acushnet
- In the past several days, one of the biggest news in the global sports industry has been the merger of PGA Tour, DP World Tour, and LIV Golf.
- We believe that this merger is likely to have a positive impact on the global golf industry, including on Fila Holdings (081660 KS) and Acushnet Holdings (GOLF US).
- If this merger successfully completed this year, there is a good possibility of a pick-up in golf related equipment sales and profits for Acushnet and Fila Holdings starting 2024.
Liberty/Telenet: Opening of Acceptance Period
- Telenet has announced the publication of the prospectus. The Board of Directors of Telenet has prepared a response memorandum in which it sets out its recommendation of the Offer.
- The offer is opportunistic and optically generous, with neither interloper risk nor sweetening to be expected. I believe most investors will cash out. Liberty could eventually drop the acceptance threshold.
- Given the ambiguity surrounding both the company and the sector in Belgium, I still think Liberty might acquire Telenet for almost a bargain. Spread is 2.38%/19.8% (gross/annualised).
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