In today’s briefing:
- Hutch Tel (215 HK): Something’s Brewing
- Toyo Cancels Poison Pill At Last Minute – Range to the Upside
- Giordano’s Conditional Offer at HK$1.88
- Kakao Pay’s MSCI Float Should Be 55% at Aug QIR Based on the Case of Kakao Games
- Uniden (6815) MBO – Cornwall Tests Market Norms By Launching a Low-Premium MBO
- DAX/MDAX/SDAX Quiddity Leaderboard Sep 2022: Rheinmetall, HelloFresh, & Other Potential Changes
- Giordano (709 HK): Cheng Family’s Underwhelming Offer
- Launch of Kindex Nuclear Theme Deep Search ETF & Hanaro Nuclear ISelect ETF in Korea
- STOXX Europe Quiddity Leaderboard Sep 2022: 10 ADDs/DELs & Some LONG-SHORT Ideas
- VW Consortium Just Shy of 90% Threshold of Europcar
Hutch Tel (215 HK): Something’s Brewing
- Hutchison Telecommunications (215 HK)‘s share price is up 33% month to date.
- The average volume in June has been 11.9mn shares per day, compared to 3.8mn shares on average over the past year, and 3mn in the past six months.
- Of interest, Southbound buying has accelerated in the last two weeks, with a holding of 0.76% of shares out, up from 0.11% at the beginning of the month.
Toyo Cancels Poison Pill At Last Minute – Range to the Upside
- On 24 May, Toyo Construction (1890 JP) (TC) came out fighting against Yamauchi No.10 Family Office (YFO), presenting a poison pill and accusing YFO of “extreme dishonesty” despite standstill agreement.
- YFO presented hundreds of pages of defence, TC continued to accuse the YFO co-CIO and others of wrongdoing. To me, TC was clearly acting in bad faith.
- After ISS and later Glass Lewis came out against TC’s proposal, YFO continued to ask for the PP to be pulled, TC has finally relented. Now we wait some more.
Giordano’s Conditional Offer at HK$1.88
- Giordano International (709 HK) announced a voluntary conditional offer from the Cheng Yu Tung family at HK$1.88 per share, an 18.2% premium to the undisturbed price.
- The VGO is conditional on the offeror and concert parties holding more than 50% of the voting rights (currently own 24.57%). The VGO price is underwhelming.
- David Webb’s (the retail activist investor) presence on the shareholder register likely deterred a privatisation bid. We think there is a 50% chance that the VGO becomes unconditional.
Kakao Pay’s MSCI Float Should Be 55% at Aug QIR Based on the Case of Kakao Games
- The MSCI immediately included 4.31% owned by Netmarble in Kakao Games’ float by applying one of the exception rules in Sections 3.2.4 or 3.2.5 of the MSCI GIMI Methodology Book.
- The exception rule used here must have been this one: Re-estimating free float figures resulting from the reclassification of shareholders from strategic to non-strategic.
- I can’t find a reason why this practice of the MSCI shouldn’t be equally applied to Alipay’s Kakao Pay stake.
Uniden (6815) MBO – Cornwall Tests Market Norms By Launching a Low-Premium MBO
- Uniden Holdings (6815 JP) is a ubiquitous manufacturer in its niche field of CBs, scanners, radar detectors, and marine radios. It used to be famous for cordless phones.
- That was then. Manufacturing revenues dropped 90% in 20yrs, there were some weird related party transactions, an accounting scandal, and now the company is fixing itself.
- And now value fund Cornwall Capital has launched an MBO at a [checks notes] 2.5% premium to last trade. This is going to be interesting.
DAX/MDAX/SDAX Quiddity Leaderboard Sep 2022: Rheinmetall, HelloFresh, & Other Potential Changes
- In this insight, we take a look at the names leading the race to become ADDs/DELs for the DAX, MDAX, and SDAX Indices for the September 2022 Rebalance.
- Aareal Bank AG (ARL GR) and Deutsche Euroshop Ag (DEQ GR) are currently involved in takeover situations which might also have index change implications.
- Based on current data, Rheinmetall (RHM GR) is leading the race to become a DAX ADD and HelloFresh (HFG GR) is leading the race to become a DAX DEL.
Giordano (709 HK): Cheng Family’s Underwhelming Offer
- The Cheng family has made a voluntary conditional Offer of $1.88/share for Giordano International (709 HK).
- The Cheng’s (and concert parties) control 24.57%. The Offer is conditional on the family getting to more than 50% via tendering.
- The intention is to maintain Giordano’s listing. The Offer Price has not been declared final.
Launch of Kindex Nuclear Theme Deep Search ETF & Hanaro Nuclear ISelect ETF in Korea
- Korea Investment Management will be launching a new nuclear power related ETF called Kindex Nuclear Theme Deep Search ETF on 28 June.
- NH-Amundi Asset Management will also be launching Hanaro Nuclear iSelect ETF on 28 June. Both ETFs are the first ones to focus on the nuclear power related stocks in Korea.
- The launch of these ETFs should have a positive impact on the major nuclear power related stocks including Doosan Enerbility (034020 KS) and Kepco Plant Service & Engineering (051600 KS).
STOXX Europe Quiddity Leaderboard Sep 2022: 10 ADDs/DELs & Some LONG-SHORT Ideas
- In this insight, we take a look at the names leading the race to become ADDs/DELs for the STOXX Europe 600 and EuroSTOXX Indices for the September 2022 Rebalance.
- Based on current rankings, I estimate there to be 10 ADDs/DELs for the STOXX Europe 600 Index including potential M&A-related deletions.
- In addition, I have discussed some LONG-SHORT pairs with interesting potential index flow dynamics.
VW Consortium Just Shy of 90% Threshold of Europcar
- At the expiry of the initial offer period, a total of 87.38% of the share capital was tendered, just shy of 2.62% to implement a squeeze-out.
- The market believes the 90% threshold will be reached, thus enabling the squeeze-out procedure. This means that the additional €0.01/share price supplement should be paid.
- Gross spread is 0.24% (shares trade above the €0.5 offer price) and the estimated annual return is 4.82% (estimated settlement on 11 July). Recommendation is long and tender.
Before it’s here, it’s on Smartkarma
