In today’s briefing:
- EOFLOW/Medtronic Tender: Risk/Reward Profile
- Douzone Bizon: Deeply Oversold, Ready for a Turnaround
EOFLOW/Medtronic Tender: Risk/Reward Profile
- Medtronic Plc (MDT US) aims to acquire Eoflow (294090 KS) through share purchase agreements (SPA), a share subscription agreement (SSA) and a public tender offer at KRW30,000.
- The shares are trading wide to terms due to key risks – regulatory approvals and the minimum acceptance condition (Medtronic owns 53.02% of the post-SSA outstanding shares).
- The regulatory approvals should be forthcoming due to minimum competition issues. The minimum acceptance condition requires a minority acceptance rate of 15.7%, which is achievable due to an attractive offer.
Douzone Bizon: Deeply Oversold, Ready for a Turnaround
- We believe shares of Douzone Bizon are deeply oversold and ready for a turnaround.
- The company is increasingly buying back shares. Treasury shares as a percentage of total outstanding shares increased from 0% at end of 2021 to 9.3% at end of 1Q 2023.
- Korean government’s plans to boost the domestic software industry by spending more than 560 billion won in the software industry is also likely to positively benefit the company this year.
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