Daily Brief TMT/Internet: Altium Ltd, ISC Co Ltd, Intel Corp, S2C Limited, Taiwan Semiconductor (TSMC) – ADR, Ansarada Group Ltd, On Semiconductor, Immersion Corporation and more

• Renesas Electronics (6723 JP), a supplier of advanced semiconductors, is offering Altium Ltd (ALU AU) shareholders A$68.50/share, in cash, a lifetime high, by way of a Scheme.
• Back in June 2021, Altium rejected a A$38.50/share NBIO, then a A$40/share verbal Offer, from US engineering software giant Autodesk. This was discussed in Altium Ltd (ALU) Rebuffs Autodesk Offer
• This is compelling Offer for Altium. For Renesas, this transaction is a paradigm shift away from its core semiconductors manufacturing ops.

• Will there be changes in April’s rebalancing? With two weeks left, two names are likely. Wonik IPS may be replaced by ISC Co Ltd, given a ₩150B market cap difference.
• In the previous rebalancing, constituent changes had a notable price impact. Despite a passive flow impact of +1.0x ADTV, HPSP and EO Technics saw about a 15% 3-day return.
• Wonik IPS is estimated to receive -4.0x ADTV, while ISC is expected to receive +1.0x ADTV. This is also quite similar to the previous rebalancing.

• Investment firms are using Ten East to diversify their personal portfolios.
• Business Breakdowns is a podcast series that explores the history, business models, and competitive advantages of different businesses.
• Todd Austin, CIO of Parnassus Investments, discusses Intel’s fall from its iconic status and the factors that contributed to it.

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• Altium Ltd (ALU AU) has entered a scheme implementation deed with Renesas Electronics (6723 JP) at A$68.50 per share, a 33.6% premium to the undisturbed price (14 February).
• The offer will close in 2H, requiring several approvals – FIRB, CFIUS, HSR Act clearance, German Ministry FDI, German Federal Cartel Office clearance, and Turkish Competition Authority.
• The offer price is attractive and 31% above the all-time high, lowering the chance of a competing proposal. At the last close, the gross spread is 3.8%.

• A semiconductor company sponsored by China International Capital Corp. Ltd. (CICC), one of the country’s top investment banks, has been fined over IPO application fraud, the China Securities Regulatory Commission (CSRC) said in a statement Friday.
• S2C Ltd., which specializes in electronic design automation, has been fined 4 million yuan ($563,095) for fraudulent activities in its attempt to list on Shanghai’s tech-heavy STAR Market.
• The move marks the CSRC’s latest effort to enforce strict information disclosure requirements and tough penalties for market violations under its registration-based IPO mechanism.

• TSMC: +16.6% ADR Premium, Still High After CNY Multi-Day Taiwan Market Close
• UMC: 1.3% ADR Premium, Still Historically High After CNY Break
• ChipMOS: +4.2% Premium, Very Rare & High Level, Not Sustainable

• Taiwan Market Surges in Post-CNY Catch-Up, TSMC a Top Gainer Locally
• Key Events Ahead: Nvidia Results Next Week, Key Taiwan Names Reporting
• Taiwan Dual-Listings Monitor: High Spreads to Persist After CNY Break 

• On 13 February, Ansarada Group Ltd (AND AU) entered a scheme implementation deed with Datasite. The offer price is A$2.50 per share, a 19.0% premium to the undisturbed price (12 February).
• The offer requires FIRB approval along with shareholder approval of the inter-conditional scheme and carve-out transaction. 
• The offer price is reasonable and marginally short of the all-time high. At the last close and for an early June close, the gross/annualised spread is 2.5%/8.3%.

• ON Semiconductor concluded the fourth quarter in 2023 with remarkable achievements depicted by its transformation and ability to mitigate headwinds in challenging market conditions.
• The quarter delivered non-GAAP gross margins of 46.7%, surpassing previous expectations.
• Though utilization shrank to 66%, the gross margin reflects significant structural adjustments made over the past three years.

• Immersion (IMMR) reached a licensing settlement with Meta Platforms (META) resulting in a payment of $17.5 million to IMMR
• The initial response to the announcement is likely due to investors’ high expectations based on META’s significant market capitalization and the anticipated scale of returns
• As a result of the cash received, we estimate IMMR to have approximately $6.20 per share in cash and securities, without consideration for fourth quarter of 2023