In today’s briefing:
- Fancl (4921) TOB – Kirin (2503) Does the Inevitable and Takes Out Minorities. Lightish But…
- Fancl (4921 JP): Kirin (2503 JP)’s Light JPY2,690 Tender Offer
- Block Deal Sale of 3.6% Shares of Enchem
- Great Eastern Holdings (GE SP): Playbook as OCBC Offer Declared Final, IFA Opines NOT Fair
- (Mostly) Asia-Pac M&A: Fancl, Jeisys Medical, A8 New Media, Bapcor, Helios Techno,Tatsuta Electric
- MV Australia A-REITs Index Rebalance: Abacus Storage King Deleted (Finally!)
- MV Global Rare Earth/Strategic Metals Index Rebalance: Two Deletions & Other Changes
- MV US Listed Semiconductor 25 Index Rebalance: US$1bn to Sell in NVIDIA
- Weekly Deals Digest (16 Jun) – Sun Corp, Fancl, Tatsuta, Great Eastern, A8, Webtoon, Shift Up
- Last Week in Event SPACE: Keisei Electric, CMCDI, Sigma Healthcare, Sun Corp, Segantii
Fancl (4921) TOB – Kirin (2503) Does the Inevitable and Takes Out Minorities. Lightish But…
- Kirin Holdings (2503 JP) bought a 33% stake from the founder and several others in August 2019. Five years later, they are coming back for the rest.
- The price here is ¥2,690/share which is a 42.7% premium from yesterday’s close. Kirin paid 20+% more in 2019. Earnings fell, but they paid 37x NTM. This is 32x.
- This is lightish… but… this should get done. Activism would be difficult. There are enough shareholders who should be OK getting out. This should trade tight.
Fancl (4921 JP): Kirin (2503 JP)’s Light JPY2,690 Tender Offer
- Fancl Corp (4921 JP) recommended Kirin Holdings (2503 JP)’s tender offer of JPY2,690, a 42.7% premium to the undisturbed price.
- The timing looks opportunistic as Fancl’s shares are down 20% YTD. The offer period is from 17 June to 29 July.
- While the offer is attractive vs peer multiples, it is light vs historical trading ranges. Securing the required acceptance rate could prove challenging as the offer price is light.
Block Deal Sale of 3.6% Shares of Enchem
- After the market close on 14 June, it was reported that Woori PE/other investors will be selling 705,384 shares of Enchem in a block deal, representing 3.6% of outstanding shares.
- The block deal discount rate ranges from 6.9% to 8.92%, resulting in potential block deal sale price of 270,500 won to 276,500 won.
- We would not subscribe to this block deal and we are concerned about the valuations of Enchem after a sharp share price appreciation this year.
Great Eastern Holdings (GE SP): Playbook as OCBC Offer Declared Final, IFA Opines NOT Fair
- Great Eastern Holdings (GE SP) IFA opines that the OCBC (OCBC SP) S$25.60 offer is NOT fair but reasonable as it is below the valuation range of S$28.87-S$36.19 per share.
- In response, OCBC declared the price final, and the final closing date is 12 July. Great Eastern will likely breach free float requirements and be suspended when the offer closes.
- The offer will likely follow the Boustead Projects/Boustead Singapore blueprint, where SGX RegCo eventually (took seven months) enabled dissenters to receive a fair offer with a 24% uplift.
(Mostly) Asia-Pac M&A: Fancl, Jeisys Medical, A8 New Media, Bapcor, Helios Techno,Tatsuta Electric
- I tally 50 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
- Three new deals discussed this week: Fancl (4921 JP)‘s Tender offer, A8 New Media (800 HK)‘s Scheme, and Jeisys Medical (287410 KS)‘s delisting offer. Bain also approached Bapcor (BAP AU).
- Key updates took place on: Sigma Healthcare (SIG AU), Alumina (AWC AU), Greatview Aseptic Packaging (468 HK), Helios Techno (6927 JP), and Tatsuta Electric Wire & Cable (5809 JP).
MV Australia A-REITs Index Rebalance: Abacus Storage King Deleted (Finally!)
- Abacus Storage King (ASK AU) will be deleted from the Vaneck Vectors Australian Property ETF (MVA AU) in June. There are float changes and capping changes too.
- Estimated one-way turnover is 3.33% and will result in a one-way trade of A$19m. There are a couple of stocks with over 1x ADV to trade.
- There has been a recent spike in shorts on Abacus Storage King (ASK AU) but passive selling will be larger than the short interest.
MV Global Rare Earth/Strategic Metals Index Rebalance: Two Deletions & Other Changes
- Core Lithium Ltd (CXO AU) and Piedmont Lithium (PLL US) will be deleted from the VanEck Rare Earth/Strategic Me (REMX US) at the close on 21 June.
- Constituent changes, float changes and capping changes result in an estimated one-way turnover of 6.4% and in a one-way trade of US$28m.
- The largest inflows will be in Sociedad Quimica y Minera de Chile (SQM US), Pilbara Minerals (PLS AU), Arcadium Lithium (ALTM US), Lithium Americas (LAC US) and Sigma Lithium (SGML).
MV US Listed Semiconductor 25 Index Rebalance: US$1bn to Sell in NVIDIA
- There are no constituent changes for the VanEck Vectors Semiconductor (SMH US) ETF in June but there are a lot of float and capping changes.
- There is US$1bn to sell in NVIDIA Corp (NVDA US) while there will be passive buying in Advanced Micro Devices (AMD US) and Intel Corp (INTC US).
- The selling in NVIDIA Corp (NVDA US) will offset part of the potential passive buying from Technology Select Sector SPDR (XLK US) and other similar ETFs.
Weekly Deals Digest (16 Jun) – Sun Corp, Fancl, Tatsuta, Great Eastern, A8, Webtoon, Shift Up
- A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
- ECM developments: MMG (1208 HK) US$1.2 billion rights issue. Shift Up (462870 KS) and Webtoon Entertainment (WBTN US) IPOs.
- Event-Driven developments: Sun Corp (6736 JP), Fancl Corp (4921 JP), Tatsuta Electric Wire & Cable (5809 JP), Great Eastern Holdings (GE SP), A8 New Media (800 HK), Bapcor.
Last Week in Event SPACE: Keisei Electric, CMCDI, Sigma Healthcare, Sun Corp, Segantii
- The Palliser/Keisei Electric Railway Co (9009 JP) is an unconvincing trade. Avoid being long Keisei vs Oriental Land (4661 JP) except in short-term impact events. Avoid the drift trade also.
- On the subject of activism, keep an eye on China Merchants China Direct Investments (133 HK)‘s 20th June AGM. If Kan’s re-election is rejected, this stock should gain more momentum.
- A Sigma Healthcare (SIG AU)/Chemist Warehouse merger carried regulatory risk. And now the ACCC has raised a raft of concerns.
💡 Before it’s here, it’s on Smartkarma
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