In today’s briefing:
- Uniti Group (UWL): New Bidder in the Fray?
- Samsung Family’s Inheritance Tax Situation & Future Block Deals
- StubWorld: Buoyant Henderson As Hong Kong Eases Covid Rules
- Kadokawa – 12m Unit Sales and the Prospect of Live Service
- Doosan Corp: Block Deal Sale of Former Chairman Park & His Sons’ Stakes
- WISE Tour Leisure (TIGER ETF) Rebalancing Preview
- A Merger Between Lotte Confectionery and Lotte Food: An Alpha Generating Event
- FCC/Metrovacesa: Opportunistic Voluntary Partial Offer
Uniti Group (UWL): New Bidder in the Fray?
- A week ago, HRL Morrison made a non-binding, preliminary and highly conditional offer for Uniti Group Ltd (UWL AU) at A$4.5/share in cash, subject to due diligence and other conditions.
- Uniti Group Ltd (UWL AU) traded up 10.7% today to A$4.67/share on high volumes and trading was halted an hour before market close.
- News reports indicate that Macquarie Asset Management and PSP Investments are likely to make an offer at A$5/share. Expect an announcement in the next 24 hours.
Samsung Family’s Inheritance Tax Situation & Future Block Deals
- The family is done with selling stakes in Samsung Life Insurance and Samsung SDS. What remains now is the sale of a 0.33% stake in Samsung Electronics by Hong Ra-hee.
- Hong Ra-hee’s 0.33% stake in Samsung Electronics is highly likely to appear soon. The deadline is April 25th. It will likely cause an impact of 1.5x ADTV.
- Additional stake sales are likely. SDS for sure, and probably more Life. But more SamE? This remains unclear due to the substantially lower controlling stake percentage.
StubWorld: Buoyant Henderson As Hong Kong Eases Covid Rules
- Henderson Land Development (12 HK)‘s shares bounced late last week after the Hong Kong government indicated it would ease strict Covid measures. FY21 results were also released yesterday.
- Preceding my comments on Henderson, 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%.
Kadokawa – 12m Unit Sales and the Prospect of Live Service
- As widely expected From Software’s Elden Ring title has proved a smash success selling 12m units within its first 17 days.
- That puts the game in rare territory and establishes the Kadokawa subsidiary as one of the premier global developers.
- There is also some potential for live services here which could add to the appeal for Sony.
Doosan Corp: Block Deal Sale of Former Chairman Park & His Sons’ Stakes
- The former Doosan Group Chairman Park Yong-Man and his sons will sell 1.296 million shares of Doosan Corp (000150 KS) in a block deal, representing 7.85% of outstanding shares.
- We have a positive view of this block deal sale and we would take the deal.
- Our NAV analysis of Doosan Corp suggests NAV per share of 188,511 won per share, representing a 61% upside from current levels.
WISE Tour Leisure (TIGER ETF) Rebalancing Preview
- WISE Tour is another fast-growing theme index in Korea with an AUM of ₩0.23T. The next rebalancing will be on April 15. So, the rebalancing trading is on April 14.
- Although the flow size of this ETF rebalancing is not substantial, it seems clear that the flow/price (direction) correlation is at a level we should pay attention to.
- Those expected to receive a meaningful flow impact at this point are: (LONG) Hana Tour, GKL, & Yong Pyong Resort / (SHORT) Hanjin KAL, Ananti, & SK Rent A Car
A Merger Between Lotte Confectionery and Lotte Food: An Alpha Generating Event
- On 23 March, it was announced that Lotte Confectionery (280360 KS) (market cap of 744 billion won) will merge with Lotte Food (002270 KS) (market cap of 395 billion won).
- We believe this merger will have a positive impact on the shares of Lotte Confectionery and Lotte Food.
- Lotte Confectionery and Lotte Food are not currently included in the KOSPI200. There will be a growing likelihood that the combined entity could be included in the KOSPI200 index.
FCC/Metrovacesa: Opportunistic Voluntary Partial Offer
- Fomento De Construcciones Y Co (FCC SM) launches an offer to buy 24% of Metrovacesa SA (MVC SM) for €284 million, €7.8/share, cum dividend, in cash (implied EV €1,271.7 million).
- The offer represents 19.4 EV/22e EBITDA, and a whopping c. 50% discount to NAV. Reference shareholders (Santander and BBVA) own 70.21% of Metrovacesa. Gross spread is 3.5%.
- Considering recent underperformance of the shares, most free float shareholders will tender, in my view. Closing of the offer should happen in less than six months. Long and tender.
Before it’s here, it’s on Smartkarma
