In today’s briefing:
- Quiddity Leaderboard KOSPI 200 Dec 24: Up to 4 ADDs & 5 DELs Possible
- Fuji Soft (9749 JP): Checkmate as KKR Switches to a Two-Stage Tender
- Why Samsung Fire Is Shaping Up to Be the Hottest Dividend Play Ahead of the Value-Up Disclosure
- M3 (2413 JP) Launches Partial Offer To Take Control of Elan (6099 JP)
- StubWorld: Swire Trading “Cheap” As Cathay Squares Government Debt
- Elan Corporation (6099 JP): M3 (2413 JP)’s Partial Tender Offer
- Korea Investment Securities to Step up as the White Knight for Choi Family at Korea Zinc
- Kuaishou Placement – US$480m Secondary Block Deal a Small One to Digest
- Intuitive Machines (LUNR): Poised for Lunar Leadership with Major NASA Contract!
- Digging into the News Flow on KIS Jumping in as the White Knight for Choi in the Korea Zinc Deal
Quiddity Leaderboard KOSPI 200 Dec 24: Up to 4 ADDs & 5 DELs Possible
- KOSPI 200 is a Korean blue-chip index that tracks the 200 largest and most-liquid names listed in the KOSPI section of the Korea Exchange (KRX).
- In this insight, we take a look at the names leading the race to become ADDs and DELs during the upcoming semiannual review in December 2024.
- We expect up to four ADDs and five DELs for the KOSPI 200 index during this index rebal event based on the latest available data. And we have a trade.
Fuji Soft (9749 JP): Checkmate as KKR Switches to a Two-Stage Tender
- KKR has rejigged its Fuji Soft Inc (9749 JP) tender offer into a two-stage offer at an unchanged JPY8,800 price. The first stage has no minimum acceptance condition.
- The first stage is designed to facilitate KKR’s acquisition of 3D and Farallon shares, which have tendered and will not withdraw their tenders without KKR’s consent.
- By securing 3D/Farallon’s shares, KKR has effectively blocked a Bain tender offer. Bain could launch a partial offer but it would be constrained by the tradeable share ratio criteria.
Why Samsung Fire Is Shaping Up to Be the Hottest Dividend Play Ahead of the Value-Up Disclosure
- With the 15% ownership cap complicating buybacks, Samsung Fire’s more likely to roll out a dividend-focused value-up play instead.
- They’ve flagged a mix of shareholder returns and investments, but the big question is how much will be funneled into returns this year.
- If Samsung Fire hits a 50% shareholder return this year, DPS could jump to ₩23,000–₩25,000 with a 6.5% yield, potentially boosting the stock price by 20–30%.
M3 (2413 JP) Launches Partial Offer To Take Control of Elan (6099 JP)
- M3 Inc (2413 JP) will buy 50.1-55.0% of Elan Corp (6099 JP). Three principals+family have agreed to tender 50.1%. The premium is not huge. This is not an ATH.
- There will be synergies. I am a little surprised by the deal+price (CEO is young, why sell so cheaply so early?) but it should be good for the TargetCo.
- There are possible post-tender complications on a high participation rate. I expect those can be cured relatively easily.
StubWorld: Swire Trading “Cheap” As Cathay Squares Government Debt
- Swire Pacific (19 HK) is coming up “cheap” on my monitor vs. Swire Properties (1972 HK) and Cathay Pacific (293 HK), after Cathay settles its Hong Kong government tab.
- Preceding my comments on Swire and Cathay 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%.
Elan Corporation (6099 JP): M3 (2413 JP)’s Partial Tender Offer
- Elan Corp (6099 JP) announced a partial tender offer and capital and business agreement with M3 Inc (2413 JP). M3 aims to make Elan a consolidated subsidiary.
- The offer is for a minimum of 30.4 million (50.10% ownership ratio) and a maximum of 33.3 million shares (55.00% ownership ratio) at JPY1,040, 24.0% premium to the undisturbed price.
- Irrevocable from tendering shareholders will satisfy the minimum acceptance condition. The offer is unremarkable, suggesting a final proration materially above the minimum of 56.07%.
Korea Investment Securities to Step up as the White Knight for Choi Family at Korea Zinc
- Hankyung Business Daily reported that Korea Investment Securities (KIS) is in a serious discussion with the Choi family of Korea Zinc to step up as a white knight.
- KIS/Choi family are considering a plan to launch a counterbid against Jang family and MBK by investing around 2 trillion won+ along with other private equity funds.
- It is probable that tender offer price of Korea Zinc could be raised by 15-25% due to a likely counterbid and current price trading 7% higher than tender offer price.
Kuaishou Placement – US$480m Secondary Block Deal a Small One to Digest
- DCM Investments is looking to raise US$484m via selling its remaining stake in Kuaishou Technology (1024 HK).
- While the current block deal isn’t entirely well flagged per se, it appears that DCM has since been trimming its stake on the open market.
- In this note, we run the deal through our ECM framework and comment on deal dynamics.
Intuitive Machines (LUNR): Poised for Lunar Leadership with Major NASA Contract!
- Intuitive Machines is at the forefront of space exploration, specializing in lunar services and infrastructure, with a strong reliance on governmental contracts such as NASA.
- The company’s recent $4.82 billion Near Space Network contract with NASA solidifies its standing as a critical player in the burgeoning space economy.
- Intuitive Machines is uniquely positioned in the market with its lunar lander capabilities, data transmission services, and autonomous lunar operations.
Digging into the News Flow on KIS Jumping in as the White Knight for Choi in the Korea Zinc Deal
- The key issue is if KIS can form a consortium. PEFs are saying the timeline is too tight and are concerned about the unclear exit strategy.
- To make this work, PEFs need Choi’s 15.65% Korea Zinc stake as collateral, but much of it is already tied up, limiting cash-raising potential.
- They’ll likely continue to leak news to boost the price and buy time. But this will also push MBK to sweeten their offer sooner.
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