In today’s briefing:
- Yuexiu Rights – The Trading Pattern Fits
- JAPAN BUYBACKS – Alfresa (2784) Cheap Stock, Uncheapening, Goes Big
- Newcrest Backs Newmont’s US$19bn Offer
- Checking on Dongwon Industries’ KS200 Deletion Situation After Last Friday’s Share Cancellation Plan
- GLP J-REIT Placement – Could Be Another Addition to Its History of Well-Performing Deals
- MVIS Australia Equal Weight Index Rebalance: Potential Deletes & Capping Changes
- Penguin International (PBS SP): Dymon Asia’s Unconditional and Final Offer of S$0.83
- Newcrest Mining (NCM AU): Binding Offer from Newmont
- Quiddity Leaderboard-DAX Jun 23: Two Changes for the MDAX Index
- InvoCare (IVC AU): TPG’s Revised $13/Share Non-Binding Offer
Yuexiu Rights – The Trading Pattern Fits
- The Yuexiu Property (123 HK) Rights start trading today. Last day is next Monday. There is a general pattern to the flows and it behooves investors to be aware.
- There is a pattern to these trades which is worth understanding.
- In this case, I expect it is worth going long Yuexiu Rights vs Short peer basket equity earlier in the cycle.
JAPAN BUYBACKS – Alfresa (2784) Cheap Stock, Uncheapening, Goes Big
- Born of a merger between two not-very-well-known businesses 20 years ago, Alfresa Holdings (2784 JP) is still not very well known. It is in a boring, low-margin business.
- The highest EBIT margin in the past two decades was…. 1.8%. ROE was in the 8-10% range for 2016-2020 but has since fallen below, as PBR has fallen below 1.0x.
- Today, we got an amended Mid-Term Management Plan, a new dividend policy, and buyback of 10% of shares out based on last price. It’s worth looking in the details.
Newcrest Backs Newmont’s US$19bn Offer
- On the 11 April, Newmont Mining (NEM US) bumped the all-scrip terms for Newcrest Mining (NCM AU) to 0.400 Newmont shares – from 0.380 – for each Newcrest share held.
- Exclusive due diligence was granted and now a firm Offer, by way of a Scheme, has been agreed.
- The Offer permits Newcrest to pay a special franked dividend of up to $US1.10/share on top of the Offer terms.
Checking on Dongwon Industries’ KS200 Deletion Situation After Last Friday’s Share Cancellation Plan
- It is highly likely that Dongwon Industries will be removed from the KOSPI 200 index in this June review.
- Additionally, based on the confirmed cancellation timeline, the possibility of reinstatement during the December review seems unlikely.
- As a result, it would be wise to maintain shorting position strategies that factor in this information.
GLP J-REIT Placement – Could Be Another Addition to Its History of Well-Performing Deals
- GLP J-REIT (3281 JP) is looking to raise around US$220m through a primary follow-on offering. The deal is a large one to digest, at 17 days of three month ADV.
- The proceeds will be used to acquire three new properties and obtain a 30% co-ownership interest in a fourth one.
- In this note, we’ll run the deal through our ECM framework and comment on deal dynamics.
MVIS Australia Equal Weight Index Rebalance: Potential Deletes & Capping Changes
- There are unlikely to be any inclusions to the index in June while there are three stocks that are close to the deletion threshold.
- Even if there are no constituent changes, there will be capping changes that will result in one-way turnover of over 4% and a one-way trade of A$78m.
- Short interest on AMP Ltd (AMP AU) has been increasing as the stock has dropped and a further decline in the stock could lead to deletion.
Penguin International (PBS SP): Dymon Asia’s Unconditional and Final Offer of S$0.83
- Penguin International (PBS SP) disclosed a revised and final voluntary unconditional offer from Dymon Asia, Executive Chairman and Managing Director at S$0.83, a 16.9% premium to the undisturbed price.
- Unlike the previous offer, the final offer will not be reduced for the FY22 dividend. The final offer price is attractive and represents a 10-year share price high.
- An attractive offer makes it also likely that the offeror hits the 90% compulsory acquisition threshold, which requires a minority acceptance rate of around 44%.
Newcrest Mining (NCM AU): Binding Offer from Newmont
- Newcrest Mining (NCM AU) has entered a SID with Newmont Mining (NEM US) at 0.400 Newmont shares per Newcrest share + US$1.10 special dividend + ordinary dividends (FY2023 dividend of US$0.20).
- The proposal is subject to shareholder approval from both sets of shareholders along with regulatory approvals (FIRB, US, Canada, Papua New Guinea).
- The offer is attractive in terms of historical prices and VWAP exchange ratios but carries the volatility risk around Newmont shares and FX rates.
Quiddity Leaderboard-DAX Jun 23: Two Changes for the MDAX Index
- In this insight, we take a look at Quiddity’s estimates for the names leading the race to become ADDs/DELETEs for the DAX, MDAX, and SDAX Indices.
- As things stand, there will not be any ADDs or DELs from the DAX index or the SDAX index.
- There could be two ADDs/DELs for the MDAX index in the June 2023 rebalance.
InvoCare (IVC AU): TPG’s Revised $13/Share Non-Binding Offer
- On the 7 March, PE outfit TPG took a 17.8% stake in InvoCare (IVC AU), Australia’s leading funeral services provider, and also pitched a A$12.65/share non-binding Offer via a Scheme.
- The Indicative proposal was subject to the completion of due diligence. InvoCare rejected the proposal on the 27 March. On the 24 April, TPG withdrew its NBIO.
- TPG has returned with a revised A$13/share, inclusive of a A$0.60/share fully franked dividend. If the proposal becomes a binding transaction, InvoCare’s Board intends to unanimously recommend it.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
