In today’s briefing:
- Dai-Ichi Life (8750) Proposes a Full Takeover of Benefit One (2412), Overbidding M3
- New Benefit One Deal Recalculated, More Benefit for All, Less for One
- TOPIX Inclusions: Who Is Ready (Nov 2023)
- Ecopro Materials KOSPI 200 Fast Entry Assessment: With K Car as the Outgoing Constituent
- Ecopro Materials: Overshooting Share Price and Upcoming End of Lockup in December
- Pasona Is Up Bigly. More To Come
- 2024 Major IPOs Pipeline in Korea
- NIFTY200 Momentum30 Index Rebalance: 18 Changes a Side, 58% Turnover, Momentum Intact
- Kasumigaseki Capital (3498 JP) – An Offering Worth Examining
- REPT BATTERO Energy IPO – Fastest Growth, Lowest Margins, No Valuation Discount
Dai-Ichi Life (8750) Proposes a Full Takeover of Benefit One (2412), Overbidding M3
- Today post-close, life insurer Dai Ichi Life Insurance (8750 JP) announced plans to launch a Tender Offer to buy out all minorities in Benefit One Inc (2412 JP) at ¥1,800/share.
- M3’s Partial (55%) Tender at ¥1,600/share ending next week is obviously a question.
- This is GREAT news for M&A in Japan. It’s good for holders of Benefit One and Pasona Group (2168 JP) too.
New Benefit One Deal Recalculated, More Benefit for All, Less for One
- The deal from Dai-Ichi Life for Benefit One Inc (2412 JP) appears language I did not get the first time around. The JPY 1800/share price is a proposed combined value.
- The deal would then lower the TOB price to Pasona, and share the benefits from that lower price to Benefit One minorities.
- That suggests more upside to Benefit One than I originally thought, and less upside (but still a chunk) to Pasona.
TOPIX Inclusions: Who Is Ready (Nov 2023)
- Quiddity’s “Who is Ready” series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.
- Our main pre-event candidate CELSYS (3663 JP) has outperformed TOPIX by ~12.6% since 1 Sep (when it was highlighted) and 6 Nov 2023.
- There are three TOPIX Inclusion events confirmed for the end of November and two other interesting pre-event names we are closely monitoring.
Ecopro Materials KOSPI 200 Fast Entry Assessment: With K Car as the Outgoing Constituent
- The fast entry screening spans from November 17th to December 7th. Given its current market cap, we should anticipate the potential success of fast entry.
- The implementation date will coincide with the effective day of the December rebalancing, which is December 15th. There are precedents of successfully achieving fast entry with such a tight schedule.
- The setup will be challenging due to the short selling ban. Nevertheless, with an existing position, there may be value in a market timing approach.
Ecopro Materials: Overshooting Share Price and Upcoming End of Lockup in December
- In this insight, we discuss the upcoming end of lockup in December for Ecopro Materials and why we believe Ecopro Materials’ share price will be much lower in 6-12 months.
- A combination of the potential inclusion in KOSPI Fast Entry plus the temporary ban on short selling of stocks in Korea has helped to push up Ecopro Materials’ share price.
- However, despite this sharp share price run-up, we think the risk-reward is horrible on this stock in terms of bigger downside risk in the next 6-12 months.
Pasona Is Up Bigly. More To Come
- After M3 Inc (2413 JP) announced an intention to buy 51.16%-55.00% of Benefit One Inc (2412 JP) via a partial Tender Offer at ¥1,600, Pasona Group (2168 JP) took off.
- Now Dai Ichi Life Insurance (8750 JP) has countered with an unsolicited ¥1,800/share Offer of Equity Value; TOB followed by a Benefit One buyback to mop up Pasona’s stake.
- The big news is how tax would be applied under Dai Ichi’s deal structure, which should see Pasona’s net proceeds significantly exceed those under M3’s Offer.
2024 Major IPOs Pipeline in Korea
- This is our 9th “Annual Edition of the Major Korean IPOs Pipeline Preview” at Smartkarma.
- This insight will feature 50 of the biggest potential IPOs in Korea in 2024.
- These 50 IPOs in Korea are likely to represent more than 80% of all capital raised through IPOs in Korea next year.
NIFTY200 Momentum30 Index Rebalance: 18 Changes a Side, 58% Turnover, Momentum Intact
- There are 18 changes for the Nifty200 Momentum 30 Index that will be implemented at the close on 28 December. We had forecast all the index changes.
- Estimated one-way turnover is 57.7% resulting in a one-way trade of INR 21.75bn (US$261m). 8 stocks have over 1x ADV to trade; 21 stocks have atleast 0.5x ADV to trade.
- The adds have continued to outperform the deletes and the index and there could be further outperformance heading into year-end and buying from passive trackers.
Kasumigaseki Capital (3498 JP) – An Offering Worth Examining
- Kasumigaseki Capital is a small cap consulting real estate speculator/developer. They have an interesting, aggressive model. People will recognise the model from pre-GFC but this one is structured better.
- The company had planned explosive growth and in October, brought growth plans forward and guidance way up. Now there is an offering to fund that growth.
- It appears to also be an offering to get a very large short position out of a risk of potential squeeze. For that, I expect this goes smoothly.
REPT BATTERO Energy IPO – Fastest Growth, Lowest Margins, No Valuation Discount
- REPT BATTERO Energy is looking to raise around US$300m in its Hong Kong IPO.
- REPT BATTERO Energy (REPT) is a lithium-ion battery manufacturer in China, focusing on R&D, production, and sales of EV/ESS lithium-ion battery products such as battery cells, modules and packs.
- We have looked at the company’s past performance in our previous notes. In this note, we talk about valuations.
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