In today’s briefing:
- Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for March
- Tam Jai (2217 HK): Toridoll (3397 JP)’s Excellent Offer
- Tam Jai (2217 HK): Toridoll (3397 JP)’s Scheme Privatisation at HK$1.58
- CVC Extends Macromill (3978) Bid and Invites Two Funds To Reinvest – More Interesting Than You Think
- Goodman Group (GMG AU): Much Bigger Index Impact of US$2.5bn Equity Offering
- JX Advance Metals Pre-IPO – The Positives – Transforming
- JX Advanced Metals (5016 JP) IPO: The Bull Case
- S&P/ASX Index Rebalance Preview: Changes Stable as Adds Outperform Deletes Bigly
- PEC Ltd. (PEC SP): Privatisation Offer From Liberty Group
- Xtapli Placement – Questionable Timing. An AI Momentum Play, at Best
Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for March
- Post market close on Friday, Hang Seng Indexes will announce the changes for the Hang Seng Index (HSI INDEX) that will be implemented at the close on 7 March.
- With no constituent changes, one-way turnover will be 2.75% with 3 stocks being capped downward. This gives the index committee the opportunity to add more stocks without significantly increasing turnover.
- The return of the high and medium probability inclusions has matched the performance of the Hang Seng Index over the last few months, Shorts have climbed in some names.
Tam Jai (2217 HK): Toridoll (3397 JP)’s Excellent Offer
- After Tam Jai (2217 HK) was suspended, in Tam Jai (2217 HK) Suspended: Expect Toridoll (3397 JP) To Make An Offer I expected an Offer from TORIDOLL Holdings (3397 JP).
- I also thought an Offer price ~HK$1.50/share would be welcome, but wasn’t hopeful. We got both – a Scheme from Toridoll at HK$1.58/share (best & final).
- Clean deal. Just a question of timing. Docs may be delayed to incorporate FY25E (Mar Y/E) financials.
Tam Jai (2217 HK): Toridoll (3397 JP)’s Scheme Privatisation at HK$1.58
- Tam Jai International (2217 HK) announced a scheme privatisation offer from TORIDOLL Holdings Corporation (3397 JP) at HK$1.58 per share, a 75.6% premium to the last close price.
- The key condition is the scheme approved by at least 75% disinterested shareholders (<10% disinterested shareholders rejection). No disinterested shareholder holds a blocking stake.
- The offer price is final. While 53% below the IPO price, the offer is attractive compared to peer multiples and historical trading ranges. This is a done deal.
CVC Extends Macromill (3978) Bid and Invites Two Funds To Reinvest – More Interesting Than You Think
- Today, the closing date of the Tender Offer for Macromill, Inc (3978 JP) by CVC saw the tender offer extended by an extra 10 days with new news.
- Price had been declared final. One very large shareholder had said they would not tender. Two more were negotiating. Those two will now tender and reinvest in the back end.
- This does not mean the tender offer is a done deal, but it is worth examining.
Goodman Group (GMG AU): Much Bigger Index Impact of US$2.5bn Equity Offering
- Goodman Group went into a trading halt and then announced results and an underwritten equity placement of A$4bn (US$2.54bn) to pursue growth opportunities across logistics and data center operations.
- The stock has dropped since CIC’s stake sale in December but still continues to handily outperform peers.
- There will be some passive buying in the stock at the time of share settlement and more a few days later to mop up around 37% of the offering.
JX Advance Metals Pre-IPO – The Positives – Transforming
- JX Advance Metal’s (JXAM) parent, ENEOS Holdings (5020 JP), is looking to raise around US$2.6bn via selling more than half of its stake in JXAM in its Japan IPO.
- JXAM engages in business activities primarily focused on the development, manufacture and sale of materials made from copper and rare metals, which are used in the semiconductor and ICT fields.
- In this note, we talk about the positive aspects of the deal.
JX Advanced Metals (5016 JP) IPO: The Bull Case
- JX Advanced Metals (5016 JP) is a global leader in the semiconductor and ICT materials sector. It is seeking to raise up to US$2.6 billion.
- JXAM is a wholly owned subsidiary of ENEOS Holdings (5020 JP). After the listing, it is expected to become an equity-method affiliate of ENEOS.
- The bull case rests on its leading market position, focus businesses’ improving performance, improving profitability, shift to cash generation, and low leverage.
S&P/ASX Index Rebalance Preview: Changes Stable as Adds Outperform Deletes Bigly
- Nearing a few days left in the review period, there could be 39 adds/deletes across the S&P/ASX family of indices in March.
- Passive trackers will need to trade a lot of stock in the forecast changes, with the impact being especially large for the changes to the S&P/ASX 200 and S&P/ASX 300.
- Except for the S&P/ASX 200 (AS51 INDEX) that is heavily tracked, the performance of the forecast changes to the other indices has been very stable with adds outperforming deletes bigly.
PEC Ltd. (PEC SP): Privatisation Offer From Liberty Group
- PEC Ltd. (PEC SP), a plant and terminal engineering specialist, has (finally) announced an Offer from Allied Energy Services, an engineering entity under the Liberty Group.
- Liberty is offering S$0.84/share (not final) – including a AS$0.20/share special dividend – a 12.8% premium to undisturbed; but really more like a >35% premium.
- Irrevocables from the board of 63.38% have been secured. Looks pretty clean. Assuming late May payment, pay up to S$0.79/share for a 6%/15% gross/annualised spread.
Xtapli Placement – Questionable Timing. An AI Momentum Play, at Best
- Xtapli is looking to raise around US$242m via a primary placement, after having raised US$145m in Jan 2025.
- QuantumPharm is a R&D platform, utilizing quantum physics-based first-principles calculation, advanced AI, high-performance cloud computing, and scalable and standardized robotic automation to provide drug and material science R&D solutions.
- In this note, we will talk about the placement and run the deal through our ECM framework.
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