In today’s briefing:
- BHP Group – A Tale of Two Rebals? Maybe… But Maybe Not
- Clearing up Misunderstandings About LG Energy K200 Fast Entry & Likely Deletion Stock
- Recruit (6098) Buyback – Big, But Meh…
- What Now For BEA After Elliott Walks?
- Charter Hall (CHC AU)’s Offer for Irongate Group (IAP AU)
BHP Group – A Tale of Two Rebals? Maybe… But Maybe Not
- The BHP Group index rebal on the S&P/ASX was bigger than most thought.
- The BHP Group index rebal on the PLC line in the UK on the FTSE UK series, MSCI and FTSE Europe, and Stoxx indices was smaller than most expected.
- But the funding and reverse funding excess volume tells a different story.
Clearing up Misunderstandings About LG Energy K200 Fast Entry & Likely Deletion Stock
- LG Energy has the second-largest market cap on KOSPI. For Fast Entry to fail, the price must lose 90% of its current value. So, Fast Entry is a foregone conclusion.
- The review period ends on February 21. The implementation date is March 11, and the announcement will likely be made public around February 24-25.
- The stock with the lowest market cap from May to October last year will leave the Index. The victim is Dongwon F&B, beating Nexen Tire by a very narrow margin.
Recruit (6098) Buyback – Big, But Meh…
- Recruit announced a buyback of up to 34 million shares in an own share tender offer to take place at a price below the current market price.
- This kind of tender offer is almost always meant for Japanese corporate holders as it rarely makes sense for others to participate.
- This is mildly EPS accretive, BVPS decretive, quite ROE accretive, but Recruit can’t really use this method for the rest of its cross-holdings.
What Now For BEA After Elliott Walks?
- Bank of East Asia (23 HK) announced last Friday it intends to buy back 8.43% of shares out from Elliott Investment Management for HK$2.9bn ($373mn), paying HK$11.19/share.
- The share buyback is expected to result in a 6% increase in the consolidated net asset value per share.
- Conditions to the buyback appear straightforward. BEA is trading cheap at 0.3x P/B.
Charter Hall (CHC AU)’s Offer for Irongate Group (IAP AU)
- Charter Hall (CHC AU) has come over the top to bid A$1.9/stapled security for Irongate Group (IAP AU). That’s 10.5% higher than the last bid from 360 Capital (TGP AU).
- Charter Hall (CHC AU) have also signed an MOU with 360 Capital (TGP AU) that takes 360 Capital out of any bidding war.
- At a 23.4% premium to pro forma NTA, we think the Irongate Group (IAP AU) Board will give the partnership due diligence access and the deal should complete.
Before it’s here, it’s on Smartkarma
