In today’s briefing:
- Benefit One (2412 JP): Thoughts on the Potential Minority Offer Price
- Last Week in Event SPACE: Pasona/Benefit One, EOFlow, Swire Pacific, Hankook & Co, Toyo Construction
- Index Rebalance & ETF Flow Recap: NKY, TW Div+, ASX200, NZX50, Mom30, Top10EW, MVW, Rakuten Bank
- ECM Weekly (10th Dec 2023) – Toyota, Denso, Rakuten, Evolution, IRCON, REPT, UBTech, Entero
- The Goose that Takes Out the Golden Egg Dies. Manager Should Explain How the Goose Can Grow Bigger
Benefit One (2412 JP): Thoughts on the Potential Minority Offer Price
- Dai Ichi Life Insurance (8750 JP)‘s pre-conditional tender offer for Benefit One Inc (2412 JP) has a total value of JPY285,733 million (JPY1,800 per share).
- The offer structure is that Pasona Group (2168 JP) will receive JPY1,800 less TOB tax benefits. Minorities will receive JPY1,800 plus the proportionate share of Pasona’s TOB tax benefits.
- Our estimated minority offer price is JPY2,086 per share, which is 15.9% higher than the JPY1,800 floor price and 9.1% higher than the last close price.
Last Week in Event SPACE: Pasona/Benefit One, EOFlow, Swire Pacific, Hankook & Co, Toyo Construction
- Dai Ichi Life (8750 JP)‘s proposal suggests more upside to Benefit One (2412 JP)‘s minorities than originally thought, and less upside (but still a chunk) to Pasona Group (2168 JP).
- It’s all over for EOFlow (294090 KS), as Medtronic Plc (MDT US) folds it tent.
- Cho Hyun-Sik (eldest son of Cho Yang-Rae, Chairman of Hankook & Company (000240 KS) has joined MBK Partners in making a partial Tender Offer for Hankook & Co.
Index Rebalance & ETF Flow Recap: NKY, TW Div+, ASX200, NZX50, Mom30, Top10EW, MVW, Rakuten Bank
- There were a lot of rebalance implementations in China on Friday, plus a few upcoming index changes that were announced during the week.
- There are a lot of implementations this week, with KOSPI 200 and KOSDAQ 150 on Thursday and then others across a bunch of countries on Friday.
- There were big inflows to Tracker Fund of Hong Kong (2800 HK) during the week taking units outstanding to a new high. ETF inflows continue even as the market drops.
ECM Weekly (10th Dec 2023) – Toyota, Denso, Rakuten, Evolution, IRCON, REPT, UBTech, Entero
- Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
- In the IPO space, Sino-Synergy Hydrogen Energy Technology (9663 HK) and Dekon Food didn’t do much even as other are lining up to try their luck.
- On the placements front, Japan and India flows continue like there is no tomorrow.
The Goose that Takes Out the Golden Egg Dies. Manager Should Explain How the Goose Can Grow Bigger
- In the long run, making Oriental Land, which is more profitable, a consolidated subsidiary through TOB would contribute to expanding Keisei’s corporate value.
- Keisei’s foreign shareholder ratio is 27.4%. It seems premature for the rotating president to change at once the company’s tradition of maintaining 40-year relationship with Oriental Land as an affiliate.
- Keisei should explain how it will develop its relationship with affiliate to increase corporate value, and what its business strategy would be if it were to sell its shareholding instead.
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