In today’s briefing:
- Infocom (4348 JP): Blackstone’s Rumoured JPY260bn Bid to Acquire Teijin’s Stake
- SG Holdings to Launch TOB on C&F Logistics (9099) At A Whopping ¥5,740/Share – HUGE Governance Win
- Chilled & Frozen Logistics (9099 JP): SG Holdings’ Stunning JPY5,740 Offer
- GAPack (468 HK): Shandong Xinjufeng Offer Progesses
- End of Mandatory Lock-Up Periods for 45 Companies in Korea in June 2024
- Portfolio Watch – Adjusting equity and commodity risks as the reflation story stalls
- (Mostly) Asia-Pac M&A: Huafa Prop, Asia Cement, QV Equities, Sciclone, Chilled & Frozen Logistics
- Weekly Deals Digest (02 Jun) – Infocom, CF Logistics, Asia Cement, GA Pack, Huafa, Shift Up
- Last Week in Event SPACE: Mitsui Matsushima, China Merchants,Kansai Paint, Teijin, Sciclone Pharma
- Mainland Connect NORTHBOUND Flows (To 31 May 2024): Net Sell Flows on Weak Gross Volumes
Infocom (4348 JP): Blackstone’s Rumoured JPY260bn Bid to Acquire Teijin’s Stake
- Bloomberg reports that Blackstone (BX US) has agreed to acquire Teijin Ltd (3401 JP)’s 55% stake in Infocom Corp (4348 JP) at a rumoured valuation of JPY260 billion.
- The potential minority offer price depends on whether the rumoured valuation refers to market cap or enterprise value and whether Teijin will share TOB tax benefits.
- The most likely scenario is that the valuation refers to the market cap, with Teijin sharing TOB tax benefits, resulting in a minority offer of around JPY5,720 per share.
SG Holdings to Launch TOB on C&F Logistics (9099) At A Whopping ¥5,740/Share – HUGE Governance Win
- Chilled & Frozen Logistics Holdings (9099 JP) was near an all-time high in late March when it closed at ¥2,041 the day AZ-Com Maruwa Holdings (9090 JP) bid ¥3,000/share.
- That was hostile, and C&F’s Board reacted swiftly, looking for a market check and competitive process. It got one. It was VERY successful in getting the best bid.
- SG Holdings (9143 JP) has bid ¥5,740 – a very full multiple and 91% higher than AZ-Com’s price. I don’t expect an overbidder. Huge governance win for Japan minorities.
Chilled & Frozen Logistics (9099 JP): SG Holdings’ Stunning JPY5,740 Offer
- Chilled & Frozen Logistics Holdings (9099 JP) has recommended SG Holdings (9143 JP)’s JPY5,740 tender offer, a 91.3% premium to AZ-Com Maruwa Holdings (9090 JP)’s JPY3,000 hostile offer.
- SG Holdings’ offer premium is stupendous. However, the offer values C&F at a CY2024 EV/EBITDA of 27.2x vs. Alps Logistics (9055 JP) offer at a CY2024 EV/EBITDA of 29.2x.
- The Board deserves credit. AZ-COM Maruwa is unlikely to engage in a bidding war as SG Holding’s offer has the Board’s recommendation and comes with a hefty takeover premium.
GAPack (468 HK): Shandong Xinjufeng Offer Progesses
- On the 9th May, Shandong Xinjufeng (301296 CH) (XJF) made a pre-conditional voluntary general Offer at $2.65/share (best & final), contingent on a 50% acceptance. Final/special dividends to be added.
- GAPack(468 HK) has made it clear that XJF is a competitor of GAPack. And Mengniu (2319 HK) may review its relationship if pre-cons are satisfied/waived; or the Offer gets up.
- XJF has announced the necessary applications have been sent to NDRC, MoC, and SAMR; and it prepping for a shareholder meeting to approve the Offer.
End of Mandatory Lock-Up Periods for 45 Companies in Korea in June 2024
- We discuss the end of the mandatory lock-up periods for 45 stocks in Korea in June 2024, among which 5 are in KOSPI and 40 are in KOSDAQ.
- These 45 stocks on average could be subject to further selling pressures in June and could underperform relative to the market.
- The top three market cap stocks including those of which at least 1% of outstanding shares could be sold in June include Hanwha Ocean, LS Materials, and Komico.
Portfolio Watch – Adjusting equity and commodity risks as the reflation story stalls
- Hello everyone, and welcome back to our weekly portfolio watch, where we shed light on the most important factors driving our Macro and Crypto portfolio over the past week.
- Macro Portfolio – Reflation bets have lost momentumWe have been banging the drum on a combination of slightly higher prices and a continuation of the rebound in manufacturing on a more global scale, placing bets in broad commodities and cyclical equities like Materials.
- The recent rally in BCOM has however been put to a halt over the past week, and it looks like we are in for a smaller correction in industrial metals, where clustering risks have turned more profound in copper and silver especially, as right about everyone has placed longs in the copper July contract.
(Mostly) Asia-Pac M&A: Huafa Prop, Asia Cement, QV Equities, Sciclone, Chilled & Frozen Logistics
- I tally 51 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
- One new deal was discussed on Smartkarma this week:Huafa Property Services Group (982 HK)‘s Scheme. Asia Cement China (743 HK) also suspended pursuant to the Takeovers Code.
- Key updates took place on: QV Equities (QVE AU), Boral (BLD AU), Greatview Aseptic Packaging (468 HK), Sciclone Pharmaceuticals (6600 HK), and Chilled & Frozen Logistics Holdings (9099 JP).
Weekly Deals Digest (02 Jun) – Infocom, CF Logistics, Asia Cement, GA Pack, Huafa, 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: Shift Up (462870 KS) seeks to raise up to US$320 million.
- Event-Driven developments: Asia Cement China (743 HK), Greatview Aseptic Packaging (468 HK), Huafa Property Services Group (982 HK), Chilled & Frozen Logistics Holdings (9099 JP), Infocom Corp (4348 JP).
Last Week in Event SPACE: Mitsui Matsushima, China Merchants,Kansai Paint, Teijin, Sciclone Pharma
- Colour me perplexed. Murakami Group ran up Mitsui Matsushima (1518 JP)‘s share price in acquiring 29%. The pattern was clear, but one assumes everyone in-group was on the same page.
- Two activist shareholders. And long only upping its stake. Heavily discounted China Merchants China Direct Investments (133 HK) is in play.
- A HUGE new buyback for Kansai Paint (4613 JP). Really big. Buy Kansai Paint vs Nippon Paint. One can buy the pop. One can buy any dips after the pop.
Mainland Connect NORTHBOUND Flows (To 31 May 2024): Net Sell Flows on Weak Gross Volumes
- The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.
- Last week saw NORTHBOUND net SELL RMB 5.7bn of A-shares on lower gross volumes. NORTHBOUND bought Zijin, Yangtze Power, and renewables and sold SOEs.
- Ongoing questions as to whether the NORTHBOUND volumes to the buy side are all foreigners. Some suspect there is national team buying mixed in, as was expected from earlier announcements.
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