In today’s briefing:
- Link’s Ongoing Overtures from DND Underscore Its Value
- StubWorld: Link And D&D Continue Negotiations On Unlisted Ops
- CALB IPO: Trading Debut
- Samsung Electronics: Lee Jae-Yong Orders the Creation of a New Task Force to Raise Shareholder Value
- Elon V. Twitter: Elon Caved…For Sure…Maybe
- Trading Ideas on the Possibility of Samsung Electronics’ Special Shareholder Returns
- We are Not Crashing, It’s Just Volatile
Link’s Ongoing Overtures from DND Underscore Its Value
- Dye & Durham/DND is a persistent bidder and returned with a A$1.27 billion bid for Link Administration (LNK AU)’s CM and BCM businesses. The Board will update next week.
- The latest offer is attractive but curiously, contradicts DND’s previous comments that the FCA would make it challenging to distribute any part sale proceeds.
- Despite the overhang from the FCA fine, DND’s ongoing persistence and the Board’s potential in-specie distribution of the PEXA Group (PXA AU) stake highlight the underlying value.
StubWorld: Link And D&D Continue Negotiations On Unlisted Ops
- In a Musk/Twitter-like on/off/on-again situation, Link Administration (LNK AU) announced it received an improved offer for its corporate markets and Banking & Credit Management (BCM) businesses from Dye & Durham.
- Separately, Link is working with the Australian Tax Office on the in-specie distribution of a minimum of 80% of Link’s holding into PEXA Group (PXA AU).
- Preceding my comments on Link are the current setup/unwind tables for Asia-Pacific Holdcos. These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.
CALB IPO: Trading Debut
- CALB (3931 HK) priced its H Share at HK$38.00 per share to raise net proceeds of HK$9.9 billion (US$1.3 billion). The H Share will start trading tomorrow.
- Grey market prices across various platforms show the shares last traded at HK$37.30-38.00 per share i.e., -2% down to unchanged compared to the IPO price.
- Despite peer multiple derating, the IPO price continues to imply a discount to the median peer CY2023 EV/EBITDA multiple. CALB should be, at least, valued in line with peer multiples.
Samsung Electronics: Lee Jae-Yong Orders the Creation of a New Task Force to Raise Shareholder Value
- On 4 October, it was reported that Samsung Electronics (005930 KS) has set up a task force to raise shareholder value of the company.
- This task force was formed at the order of Samsung’s Vice Chairman Lee Jae-Yong.
- All in all, a major share buyback and cancellations coupled with higher dividends could result in a share price turnaround for Samsung Electronics.
Elon V. Twitter: Elon Caved…For Sure…Maybe
- Elon to Judge: Twitter Lies! Twitter is a fraudster! I am NOT buying Twitter!
- Also Elon: Never mind. Carry on. Twitter: Riiiight. We’ll see.
- Elon’s Bankers: WUT? WE HAVE TO SELL “CCC” LBP BONDS NO ONE WANTS TO BUY?
Trading Ideas on the Possibility of Samsung Electronics’ Special Shareholder Returns
- 1P/Ord LONG/SHORT betting on a 1P-skewed buyback does not look very desirable. The Lee family’s financial needs are short-term, so there is no need for a 1P-skewed buyback.
- Given that the 1P discount rate has stabilized again, a strategy betting on the mean reversion does not seem very timely either.
- We should look at the possibility that false expectations for a special year-end dividend will further deepen futures backwardation. This situation can lead to quite a juicy spot/futures spread opening.
We are Not Crashing, It’s Just Volatile
- Listening to sentiment alone would lead investors to believe we are 50% down on the S&P 500 and we have another 50% to go.
- But, this simply is not true. When benchmarking the markets recent price action by sector, this bear market, on a technical basis, has the hall marks of every market bottom since 2000.
- Recollecting Howard Marks book, “Mastering the Market Cycle”, there was a particular part that was of importance.
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