In today’s briefing:
- Allkem/Livent (AKE AU | LTHM US) Merger Update: MUCH More Than Meets The Eye
- JIC Deal For Shinko Electric Is LIGHT, and There’s Room To Complain, But Will Trade Wide
- NASDAQ 100 Index Rebalance: 6 Regular Changes + 1 Adhoc Change; US$37bn to Trade
- Toyota Cross-Shareholding – To Say a Whole Lot Is Left Would Be a US$26bn Understatement
- Shinko Electric (6967) Takeover: Initial Break/Gap Risk Analysis
- KOSDAQ150 Index Rebalance Preview: Posco DX Listing Transfer
- Whitebox Goes Activist on Samsung C&T
- Vinda (3331 HK): Tanoto’s Firm Offer
- Zozo-Owned Yutori IPO This Month
- Quiddity Leaderboard STAR 50 Mar 24: Four High-Impact Changes Likely; Some Interesting Trade Ideas
Allkem/Livent (AKE AU | LTHM US) Merger Update: MUCH More Than Meets The Eye
- The Allkem/Livent “merger of equals” discussed in Allkem/Livent (AKE AU | LTHM US) Merger Of Lithium Equals Has Index Surprises and Allkem/Livent: Enlarged Charging Unit is on track.
- As of the end of last month, all approvals are received or are expected to be received. The Scheme Booklet is expected next month. Deal is expected to close end-CY2023.
- The deal STILL has interesting side issues with index. Even more interesting than Newcrest/Newmont. This is an update with more detail as we probably have 8-10 weeks left.
JIC Deal For Shinko Electric Is LIGHT, and There’s Room To Complain, But Will Trade Wide
- 29 minutes after I published a long, musing piece on the possibilities of structure and announcement later this week, JIC and Shinko Electric announced 5 minutes before midnight.
- A warning for the future: The Nikkei and every other media outlet got the number wrong. It is NOT a total acquisition cost of “around ¥800bn”. It is under ¥700bn.
- It IS a split deal. And if JIC won with that price, it tells you something about the state of the market and future deals in the space.
NASDAQ 100 Index Rebalance: 6 Regular Changes + 1 Adhoc Change; US$37bn to Trade
- There were 6 inclusions and 6 exclusions for the Nasdaq-100 Stock Index (NDX INDEX) at the annual December reconstitution. Then another ad hoc change was added on top of that.
- Impact on the inclusions ranges from 1-8 days of ADV to buy, while the impact on the deletions varies from 0.7-2.6 days of ADV to sell.
- Apart from the constituent changes, there are expected to be inflows in Tesla Motors and Broadcom and outflows from Apple, Microsoft, Amazon.com and NVIDIA.
Toyota Cross-Shareholding – To Say a Whole Lot Is Left Would Be a US$26bn Understatement
- With Toyota (7203 JP) having sold some of its stake in Denso, KDDI and Harmonic Drive this year, it has firmly set the ball rolling for unwinding some of its cross-shareholding.
- Toyota has a shareholding in around 60 listed companies, with its combined disposable stake worth over US$26bn.
- In this note, we take a look at its stakes in various companies to see which ones could possibly be candidates for further selldowns.
Shinko Electric (6967) Takeover: Initial Break/Gap Risk Analysis
- The JIC Deal for Shinko Electric Industries (6967 JP) has been announced and is, as expected, trading wide.
- There is FUD. There are Flows. Just like JSR (4185). Some of that FUD can be explained by “gap risk” on deal break…. or can it? We look at risks.
- There’s more positioning risk than fundamental risk at this point. And the FUD and Flows have specific timing in this case which makes thing different than JSR. Worth thinking about.
KOSDAQ150 Index Rebalance Preview: Posco DX Listing Transfer
- The KRX has preliminarily approved Posco DX (022100 KS)‘s listing transfer from the KOSDAQ Market to the KOSPI Market.
- Posco DX (022100 KS) has announced that its stock will start trading on the KOSPI Market from the open on 2 January.
- We expect Temc (425040 KS) to replace Posco DX (022100 KS) in the KOSDAQ 150 Index (KOSDQ150 INDEX) at the close on 28 December.
Whitebox Goes Activist on Samsung C&T
- On 14 December, it was reported that US based Whitebox Advisors has started an activist campaign on Samsung C&T (028260 KS).
- Whitebox estimates that Samsung C&T’s stock price is about 68% undervalued compared to its NAV.
- In addition to Whitebox, there are two other foreign investors including Palliser Capital and City of London Investment Management that have requested Samsung C&T to improve corporate governance.
Vinda (3331 HK): Tanoto’s Firm Offer
- Back on the 27 April, personal hygiene play Vinda International (3331 HK) announced its controlling shareholder Essity (ESSITYB SS) would commence a strategic review of its 51.59% ownership.
- That spurred, allegedly, a variety of suitors including Brazil’s Suzano, the world’s largest hardwood pulp producer, Bain Capital, CVC Capital, DCP Capital, and Indonesia’s Tanoto family.
- And the Tanoto’s have now emerged with a HK$23.50 pre-conditional Offer. The key risk is PRC regulatory approval . Elsewhere, this is a done deal.
Zozo-Owned Yutori IPO This Month
- Zozo may lead in online fashion malls but its customer base, while young, is getting older.
- In 2020, it acquired a majority stake in Yutori, a fledgling fashion mall targeting the young, which will now list this month.
- Yutori has grown sales to ¥2.47 billion since launching five years ago. As well as Japan, it sees a major opportunity across Asia given Japanese street fashion popularity there.
Quiddity Leaderboard STAR 50 Mar 24: Four High-Impact Changes Likely; Some Interesting Trade Ideas
- STAR 50 Index is a tech-focused, blue-chip index in Mainland China which tracks the top 50 largest and most liquid names in the STAR market of the Shanghai Stock Exchange.
- In this insight, we take a look at our expectations for potential ADDs and DELs for the STAR 50 index during the March 2024 index rebal event.
- There could be up to four index changes. Some of these are high-conviction changes and some are low-conviction changes.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Analytics and News
- ✓ Events & Webinars
