In today’s briefing:
- MACA: Thiess’ Unsurprising Bump. NRW’s Move, If Any
- MACA’s Revised Thiess Offer Makes an NRW Rival Offer Increasingly Unlikely
- US Inflation Reduction Act: Bifurcated Impact on Korean Chaebols (Hyundai, LG, Hanwha, SK & Samsung)
- Berli Jucker (BJC TB) – Well-Packaged Recovery Proxy
- AST SpaceMobile Vs Starlink: The Race for Global Connectivity
- Hanjin Kal Club Deal: Shorting on Waning Proxy Fight & Flow Trading on MSCI Inclusion
- Otis Corp: Major Drivers
MACA: Thiess’ Unsurprising Bump. NRW’s Move, If Any
- Back on the 26th July, diversified contractor MACA Ltd (MLD AU) announced a friendly off-market cash offer from fellow contractor Thiess, at A$1.025/share, a 28.1% premium to the undisturbed price.
- The Bidder’s Statement was dispatched on the 9 August. After rejecting NRW Holdings (NWH AU)‘s non-binding proposal (implied consideration of $1.085/share), MACA dispatched the Target Statement on the 25 August.
- Thiess has now lifted its all-cash Offer to A$1.075/share – a 34.4% to undisturbed. MACA is trading marginally through the revised terms. The first closing date is the 12 September.
MACA’s Revised Thiess Offer Makes an NRW Rival Offer Increasingly Unlikely
- Theiss has improved its MACA Ltd (MLD AU) offer from A$1.025 to A$1.075 per share. The offer is conditional on 90% minimum acceptances, FIRB approval and no prescribed occurrences.
- Theiss increased its shareholding to 15.90% of outstanding shares due to acceptances from MACA founders and directors. This is a stumbling block to a potential NRW Holdings (NWH AU) scheme.
- While the value of NRW’s default option remains higher than Thiess’ revised offer, it is increasingly unlikely that NRW will start a bidding war.
US Inflation Reduction Act: Bifurcated Impact on Korean Chaebols (Hyundai, LG, Hanwha, SK & Samsung)
- The US Inflation Reduction Act (IRA) is likely to have a bifurcated impact on key Korean companies including Hanwha Solutions (009830 KS) and Hyundai Motor (005380 KS).
- IRA is likely to have a positive impact on Hanwha Solutions, CS Wind, LG Energy Solution, and Samsung SDI and negative impact on Hyundai Motor Group.
- The impact of the IRA could last for a few more trading days although it is difficult to tell exactly how long the bifurcated impact by the IRA will last.
Berli Jucker (BJC TB) – Well-Packaged Recovery Proxy
- Berli Jucker (BJC TB) 2Q2022 results saw continue momentum to sales from the recovery in Thailand and Vietnam with some impacy from higher raw material costs on margins.
- It packaging supply chain saw a strong recovery from both glass bottling and aluminium cans with the latter seeing the biggest rebound. Retail under BigC also saw strong growth.
- Berli Jucker remains a top proxy for the recovery in domestic consumption in both Thailand and Vietnam through its packaging plus for the retail recovery in Thailand through BigC.
AST SpaceMobile Vs Starlink: The Race for Global Connectivity
- Elon Musk’s Starlink recently announced plans to enter the global carrier market, spooking shareholders of space-based cellular operator AST SpaceMobile.
- AST, which went public through a SPAC in 2021, has plans to commercialise global space based telecommunications, but has notably struggled due to technical challenges.
- AST Shareholders have feared that the Starlink announcement risked overshadowing the company’s upcoming launch and also possibly beat the company to market, despite the latter having a significant head start.
Hanjin Kal Club Deal: Shorting on Waning Proxy Fight & Flow Trading on MSCI Inclusion
- Bando sold all of its 17% stakes through a club deal. Of this, about 3.8% went to LX Pantos. The remaining 13% found a new home among several institutional investors.
- Outright shorting for Hanjin Kal seems to require a bit more cautious approach. That’s because there is still no definitive information on the owners of the 13% stake.
- If the price correction does not go as harshly as expected and expectations for a proxy battle resurface, we should consider switching to flow trading aimed at MSCI inclusion.
Otis Corp: Major Drivers
- Otis had a decent quarter with growth in organic sales and expansion in margins though it failed to meet market expectations on the revenue front.
- In the quarter, the net sales were down mainly because of the wide strengthening of the U.S. dollar.
- The service business of Otis grew sales and expanded margins.
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