In today’s briefing:
- Hamamatsu Photonics (6965) – Toyota Selling Yet Another Cross-Holding
- Sanrio (8136 JP) – Kitty Behaving Badly
- Goodman Group (GMG AU) Placement: Limited Index Flows
- 7&I (3382 JP) – Ito-San MBO Plan Includes 7-Eleven US IPO… Which LeadsTo A Modest Proposal
- Auckland Airport (AIA NZ) Placement: Potential Index Flows
- Latest Scoop on President Yoon’s Impeachment Motion and How to Play It in the Market
- ESR Group (1821 HK): Consortium’s Scheme Cash/Scrip Privatisation Offer
- Ecopro BM (247540 KS): Index Implications as KOSPI Transfer Nears
- Auckland Airport Placement – NZ$1.3bn (US$770m) Cleanup Sale Will Remove the Overhang
- ESR (1821 HK): HK$13.00/Share Offer
Hamamatsu Photonics (6965) – Toyota Selling Yet Another Cross-Holding
- Today after the close we got news that after a year-plus of Hamamatsu Photonics Kk (6965 JP)‘s sliding stock price, Toyota Motor (7203 JP) is selling their 5+% stake.
- The offering is standard. Probably prices 9 Sep 2024. HP’s amended buyback program and probable index upweights offset most of the offering size over the next several months.
- So investors have to decide whether they want to catch the falling knife.
Sanrio (8136 JP) – Kitty Behaving Badly
- Sanrio (8136 JP) announced a deal last week which I discussed in Sanrio (8136 JP) Large Secondary Offering – Don’t Say Hello Kitty! Too Soon. Next day it fell sharply.
- There was shorting involved, and since then the stock has rallied 18% to clear the undisturbed price which itself was an all-time high, up 5% in the previous two days.
- There is some LO buying, some HF covering, but a LOT of day-traders. In five days the stock has traded 903% of its Maximum Real World Float. That’s a lot.
Goodman Group (GMG AU) Placement: Limited Index Flows
- China Investment Corp owns 7.84% of Goodman Group (GMG AU) and is looking to sell 50.4m shares (2.64% of shares out) at a price range of A$37.55-37.6/share, a tiny discount.
- Goodman Group (GMG AU) has run away from its peers over the last couple of years and there could be a move lower in the stock following the placement.
- There will be limited passive buying in the short-term coinciding with the placement. There will be some more passive buying in February.
7&I (3382 JP) – Ito-San MBO Plan Includes 7-Eleven US IPO… Which LeadsTo A Modest Proposal
- A Bloomberg article late in the trading session today said the Seven & I Holdings (3382 JP) MBO proposal by Ito family scion Ito Junro includes a US assets IPO.
- The idea? IPO proceeds would help pay down MBO debt to Japanese banks. Seven & i would retain a stake. This is not dissimilar to Berkshire Hathaway buying a stake.
- But more directly, this leads us back to 7&I (3382) – What If… A Modest Proposal. Possible strategic mistake by Ito-san here. ACT should act on this.
Auckland Airport (AIA NZ) Placement: Potential Index Flows
- Auckland City Council is looking to sell 163.23m shares of Auckland Intl Airport (AIA NZ) in a clean-up trade. This is big at NZ$1.3bn and 64 days of ADV.
- The placement was expected by the market and the stock has run up despite that. The stock is in a trading halt and should open lower.
- There will be passive buying at the time of settlement of the placement shares and that will mop up around 15% of the offering.
Latest Scoop on President Yoon’s Impeachment Motion and How to Play It in the Market
- The key point is Saturday—watch if eight ruling party lawmakers defect. Hahn Dong-hoon may push for an early election, with 15 loyalists backing him, so it’s definitely possible.
- I’d bet on the ruling party leader pivoting, accepting impeachment, and pushing for an early election. Time to scout beneficiaries and set up an aggressive trading play.
- Short-Term, I’m eyeing Kakao affiliates, under-the-radar IT stocks, and those likely to benefit from corporate governance changes. Low birth rate-related sectors are also set for strong upside.
ESR Group (1821 HK): Consortium’s Scheme Cash/Scrip Privatisation Offer
- ESR Group (1821 HK)’s preconditional scheme offer from the consortium is either cash (HK$13.00), scrip or a combination of cash/scrip. The offer is final.
- The precondition relates to several regulatory approvals. The precondition satisfaction does not carry the same risk as the China Traditional Chinese Medicine (570 HK) deal break.
- The irrevocable (31.03% of outstanding shares) ensure that shareholders with blocking or close to blocking stakes are supportive. This is a done deal, with timing the key risk.
Ecopro BM (247540 KS): Index Implications as KOSPI Transfer Nears
- Eight months after shareholders approved the transfer from the KOSDAQ to the KOSPI market, Ecopro BM (247540 KS) has submitted the application for section transfer to the KRX.
- Given historical precedent, the transfer could take place in February. Ecopro BM‘s deletion will mean an inclusion to the KOSDAQ150 Index to maintain the number of index constituents at 150.
- Ecopro BM (247540 KS) will be deleted from the KOSDAQ 150 Index leading to passive selling and some short covering. Then will come the inclusion to the KOSPI 200 Index.
Auckland Airport Placement – NZ$1.3bn (US$770m) Cleanup Sale Will Remove the Overhang
- Auckland Council is looking to raise NZ$1.3bn (US$772m) from selling its entire stake in Auckland Intl Airport (AIA NZ).
- Overall, the selldown will be a large one for the stock to digest at 10% of shares outstanding and 62 days of three month ADV.
- In this note, we run the deal through our ECM framework and comment on deal dynamics.
ESR (1821 HK): HK$13.00/Share Offer
- HK$13.00/Share (deemed final). That’s the key takeaway here as the Starwood/Warburg Pincus Consortium (finally) tables a firm offer, by way of a pre-conditional Scheme.
- Pre-Conditions are extensive, with a long stop date of the 4th September 2025.
- HK$13.00 is below prior expectations of a HK$14+ handle. But with irrevocables of 30.79% of the register (and 51.24% of Scheme shares), this is done. A scrip option is afforded.
💡 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
