Daily Brief Industrials: SHL Japan Ltd, Golden Energy & Resources, Alfen, Carr’s Group PLC, Deere & Co and more

• The parent company of SHL Japan Ltd (4327 JP)‘s largest shareholder is buying out its main customer in Japan. 
• This is an LBO/MBO situation, and friends and family get it to 63% or so. A tiny sliver from others gets it over the hump. 
• Should get done easily, but the corporate governance here is not encouraging. Yes, a premium, but no explanation, and it’s a bit low.

• The Widjaja family’s Offer for Golden Energy (GER SP) back in November has been derided in the press, one outspoken minority shareholder, and (a loosely veiled statement) by Singapore RegCo.
• Now the Securities Investors Association (Singapore) (SIAS) has thrown its hat into the ring and has called on GEAR to improve the Offer for shareholders. 
• The long stop date was surprisingly pushed back five months to satisfy the Exit offer conditions. This delay should avail the family of ample time to bump terms.  

• The March 2023 regular rebalance index changes for the SE600 index and the EUROSTX index were announced yesterday. 
• There are 8 ADDs/DELs for the SE600 index and 5 ADDs and 2 DELs for the EUROSTX index.
• In this insight, we take a closer look at the index flow expectations and the historical performance of SE600 and EUROSTX Rebalance events.

Carr’s Group has issued a detailed trading update giving some preliminary financial metrics on FY22 performance. These show both continuing divisions (Speciality Agriculture and Engineering) beating our EBIT estimates, following a strong finish to the year. The shares remain suspended until management finishes the final stages of the audit process, which it believes are ‘essentially complete’. Our note is based on the initial information in the trading update. We will publish a follow-on update once the full results are announced.

• Deere managed to deliver an all-around beat in the first quarter of the new fiscal year.
• The equipment operations had a 20% margin in the financial results for the quarter.
• The management expects demand to exceed the industry’s ability to deliver for another year.