In today’s briefing:
- Mapletree Merger: All-Cash Option; Current Prices Mean No Passive Flows
- Toshiba – The New CEO And The Company Culture
- Caymans To Decapitate The Headcount
- Qube Holdings BIG (7+%?) Off-Market Buyback
- WISE Media Contents (TIGER ETF) Rebalancing Preview
- Link Admin (LNK AU): Scheme On Track as Proposal Emerges For RSS Business
- Block Deal Sale of Celltrion & Celltrion Healthcare by ION Investment
- Link’s Privatisation by DND on Track to Complete in June/July
- Block Deal Sale of Samsung SDS by the Lee Family to Pay for Inheritance Taxes
- Krafton & KakaoBank: Potential MSCI Upweights in May
Mapletree Merger: All-Cash Option; Current Prices Mean No Passive Flows
- Mapletree Commercial Trust (MCT SP) have added a cash-only option for Mapletree North Asia Commercial Trust (MAGIC SP) unitholders in addition to the scrip-only and cash-and-scrip options.
- At current prices, Mapletree North Asia Commercial Trust (MAGIC SP) unitholders will take the cash-only option. That means no passive flows following the implementation of the scheme.
- At current prices, the entire preferential offering is likely to be taken up by MIPL. The increase in shares will be offset by a lower FIF/investability weight – no inflows.
Toshiba – The New CEO And The Company Culture
- The Nikkei had an interesting article today on Toshiba’s new CEO and the company’s underlying culture.
- It addresses some inconsistencies we have seen in terms of demonstrated competence at lower levels vs. a certain lack thereof at the top.
- Ultimately though we suspect that what it reveals points to a lower chance of a privatisation
Caymans To Decapitate The Headcount
- The Cayman Islands is seeking to eliminate the “headcount test” for Schemes of Arrangement.
- Such an amendment will provide greater certainty for Hong Kong Schemes, wherein 59% of all listed companies are Cayman Islands incorporated.
- This development arrives a tad late for Razer Inc (1337 HK), which is trading wide to terms, exactly on account of the fact it could potentially fail the headcount test.
Qube Holdings BIG (7+%?) Off-Market Buyback
- Qube Holdings (QUB AU) saw a near 5% block sold Friday after the close at a small discount – likely the long-awaited CPPIB cleanup trade.
- This morning, the company announced a A$400mm off-market buyback, with record date 29 March, giving appropriate investors time to build a position.
- This should be something like 7.2-7.8% buyback, leading to 7.5-8.5% EPS accretion for 2023.
WISE Media Contents (TIGER ETF) Rebalancing Preview
- WISE Media Contents rebalances every quarter in January, April, July, and October. The effective date for the upcoming rebalancing is April 15.
- The gap between the rebalancing weight change estimations based on the float-adjusted market caps and the actual implementation of the ETF operator (TIGER) is not significant.
- Following stocks are worth paying attention: (Short) Jyp Entertainment, S.M.Entertainment, Studio Dragon, Jcontentree, and SBS Contents Hub / (Long) CJ ENM, DearU, D&C Media, Genie Music, and IHQ
Link Admin (LNK AU): Scheme On Track as Proposal Emerges For RSS Business
- Link Administration Holdings (LNK AU) announced that all applications for regulatory approvals have been submitted. The Scheme explanatory booklet will be submitted to ASIC this week.
- Separately, discussions with LCFH have not resulted in an agreement for the sale of Link’s BCM business. Additionally, a proposal from FNZ Group for the RSS business was rejected.
- The ACCC and FCA approvals are the key risks to the deal completing.
Block Deal Sale of Celltrion & Celltrion Healthcare by ION Investment
- After the market close today, it was announced that ION Investment will partially sell its stakes in Celltrion and Celltrion Healthcare for about 560 billion won in a block deal.
- The block deal price ranges are at 6 to 9 percent discount to current prices of Celltrion and Celltrion Healthcare.
- We would take this take this deal due to settling of the accounting issue, more reasonable valuations, and sizeable block deal discount range.
Link’s Privatisation by DND on Track to Complete in June/July
- Link Administration Holdings (LNK AU) notes that the Dye & Durham (DND) privatisation scheme remains on track for a June/July completion. Scheme document will be submitted to the ASIC shortly.
- Link also noted that it was unable to reach a binding agreement with LC Financial Holding for the sale of the BCM business.
- Key hurdles are ACCC clearance and the Woodford investigation. We would be buyers up to A$5.2 per share (implies 70% deal probability).
Block Deal Sale of Samsung SDS by the Lee Family to Pay for Inheritance Taxes
- The Samsung Group owner Lee family wants to partially sell their stake in Samsung Sds worth 390 billion won in a block deal.
- The block deal sale involves 3.02 million shares of Samsung SDS or 3.9% of outstanding shares.
- We would avoid this block deal as the company may face continued overhang sale issue in the next 1-2 years.
Krafton & KakaoBank: Potential MSCI Upweights in May
- KakaoBank (323410 KS) is currently included in the MSCI Korea Index at a FIF of 20%. That could increase to 35% at the May SAIR.
- Krafton Inc (259960 KS) is currently included in the MSCI Korea Index at a FIF of 45%. That could increase to 55% at the May SAIR.
- We estimate passive MSCI trackers will need to buy US$222m of KakaoBank (323410 KS) and US$83m of Krafton Inc (259960 KS) at the close on 31 May.
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