In today’s briefing:
- [JAPAN ACTIVISM] Palliser Gets ISS/GL Nods for Keisei AGM Proposals – How Will The Swing Vote Swing?
- In Court Today With Segantii
- Helios Techno Holding (6927) TOB – Today Could Be The Day
- Tatsuta Electric (5809 JP) Crunch Time = Bump Time?
- Sciclone Pharmaceuticals (6600.HK) Privatization Update – Some “Unstable Factors” During Voting
- ASX200 Index Adhoc Rebalance: Judo Capital to Replace CSR; Positioning Appears Light
- Tatsuta Electric (5809 JP): Eneos Finally Secures SAMR Approval but Needs to Bump
- A8 New Media (800 HK): A Scheme with a 162% Takeover Premium
- Mao Geping Cosmetics Pre-IPO – Riding on the Founder’s Reputation
- Proposed Merger Between Rebellions and Sapeon – To Challenge Nvidia
[JAPAN ACTIVISM] Palliser Gets ISS/GL Nods for Keisei AGM Proposals – How Will The Swing Vote Swing?
- In Oct2023, activist Palliser Capital launched a campaign on well-known “stub trade” Keisei Electric Railway Co (9009 JP) (1.6% stake). The proposal? Monetise OLC, invest for growth, be shareholder friendly.
- Keisei responded 3+mos ago: buyback and 1% OLC stake sale but said OLC would remain an equity affiliate. Palliser re-engaged in late April (Japanese/English and two AGM agenda items). Keisei objected.
- Palliser made their case, Glass Lewis and ISS support Palliser. Palliser likely cannot win. The goal here isn’t to win though. It is to get enough to raise management consciousness.
In Court Today With Segantii
- Although this note does not encapsulate a trade idea, the fallout from the Capital Management Limited’s (Segantii) insider dealing case has impacted certain event trades, as the fund winds down.
- On the 2nd May, the SFC commenced criminal proceedings against Segantii, its founder/ director/CIO Simon Sadler, and former trader Daniel La Rocca.
- In the Eastern Magistrates’ Court this morning, we heard the prosecution’s request to transfer the case to the District Court.
Helios Techno Holding (6927) TOB – Today Could Be The Day
- Rs Technologies (3445 JP) announced a TOB on Helios Techno Holding (6927 JP) 12 days ago. At a 74% premium, but that was too cheap. I discussed it here.
- Shares went limit up for two days then traded huge volume the first full day last Wednesday. The lowest trade so far in open trading is 3% through terms.
- 57% of Shares Out Ex-Treasury have traded in five days. Anyone who bought 5% on Day 1 has to file a Large Shareholder Report today.
Tatsuta Electric (5809 JP) Crunch Time = Bump Time?
- ENEOS Holdings (5020 JP) announced a deal to buy out their affiliate Tatsuta Electric Wire & Cable (5809 JP) 18 months ago. The TOB was expected to start June 2023.
- June 2023 came around and China’s SAMR still hadn’t approved. ENEOS provided quarterly updates in Sep and Dec and monthly updates since. The May update was different.
- The May update cut the “re-update” schedule to mid-month June. There are reasons to look at what has changed since the Dec 2022 announcement.
Sciclone Pharmaceuticals (6600.HK) Privatization Update – Some “Unstable Factors” During Voting
- Some shareholders have confirmed to be acting in concert at the Court Meeting, but long-term investors may vote against the privatization because they are not satisfied with the Cancellation Price.
- The success rate of SciClone’s privatization is lower than that of China TCM and L’Occitane. If fails, there’s a high probability that the share price will fall back to HK$14/share.
- The current share price cannot provide decent returns. Together with exchange rate risk, potential failure risks, etc., there’s no need for investors to take risks at this share price level.
ASX200 Index Adhoc Rebalance: Judo Capital to Replace CSR; Positioning Appears Light
- CSR Ltd (CSR AU) is expected to stop trading on 19 June following the acquisition by Cie De Saint-Gobain (SGO FP).
- Judo Capital (JDO AU) will be added to the S&P/ASX 200 (AS51 INDEX) at the close on 19 June to replace CSR Ltd (CSR AU).
- There has been short covering in Judo Capital over the last 3 months and there does not appear to be enough positioning for the index inclusion yet.
Tatsuta Electric (5809 JP): Eneos Finally Secures SAMR Approval but Needs to Bump
- 18 months after announcing the offer, ENEOS Holdings (5020 JP) secured SAMR approval for the Tatsuta Electric Wire & Cable (5809 JP) tender offer at JPY720 per share.
- The tender offer is expected to be launched on 21 June, subject to securing the recommendation from the special committee and the Board.
- A bump is required due to the material market rerating since 21 December 2022. An offer of JPY828, a 15.1% premium to the current offer, implies a P/B of 1x.
A8 New Media (800 HK): A Scheme with a 162% Takeover Premium
- A8 New Media (800 HK) disclosed a Cayman scheme privatisation offer from Mr Liu Xiaosong (Founder, Chairman, CEO) at HK$0.36 per share, a 162.8% premium to the last close price.
- The massive premium is unsurprising, as A8’s EV has been negative since April 2023 due to headwinds from the weak Chinese leasing sector and uncertainty about cash use.
- The high takeover premium, no shareholder holding a blocking stake, and low AGM minority participation rate point to a done deal. However, this is a small-cap illiquid stock.
Mao Geping Cosmetics Pre-IPO – Riding on the Founder’s Reputation
- Mao Geping Cosmetics is looking to raise around US$300m in its upcoming Hong Kong IPO.
- Mao Geping Cosmetics (MGC) operates in the premium beauty segment. Operating via its two brands, MAOGEPING and Love Keeps, MGC offers a wide range of color cosmetics and skincare products.
- In this note, we look at the company’s past performance.
Proposed Merger Between Rebellions and Sapeon – To Challenge Nvidia
- On 12 June, SK Telecom (017670 KS) confirmed that its affiliate Sapeon plans to merge with its competitor Rebellions by end of this year.
- Sapeon and Rebellions’ largest global competitor is Nvidia. A key aim of the merger is to challenge Nvidia and try to take away its global dominance in AI chips.
- If the combined Sapeon and Rebellion can take away just 1% market share resulting in 1% of Nvidia’s market cap, this would suggest valuation of US$31 billion.
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