In today’s briefing:
- Kito (6409) Goes Private. Again. This Time With KKR, But Watch the Register
- Block Deal Sale of Hyundai Heavy Industries
- NIFTY100 Index Rebalance Preview: Five Potential Changes in September
- Brambles (BXB AU): Where Could CVC’s Bid Come In?
- SK Telecom Nearing Zero Foreign Room & May Spark Alternative Trading for KT Corp
Kito (6409) Goes Private. Again. This Time With KKR, But Watch the Register
- Kito Corporation (6409 JP) was taken private in 2003. It was re-IPOed by Carlyle in 2007 but Konecranes stayed an investor until 2016. Then it unwound.
- Today, Kito announced the best results since pre-covid and forecasts for growth. They also announced KKR unit Crosby would launch a Tender to buy them out at a 62% premium.
- Shareholder structure is highly unusual, and interesting to boot, especially looking at the most recent arrival in the top two. The fact there is a break fee is… telling.
Block Deal Sale of Hyundai Heavy Industries
- After the market close today, Korea Shipbuilding & Offshore Engineering announced that will sell 1.7% of its shares (1.5 million shares) in Hyundai Heavy Industries in a block deal.
- The block deal sale is expected to take place on the morning of 17 May. The block deal price is expected to be 120,650 won.
- We would take this deal as we believe this sale is likely to have a short term positive impact on HHI and increase the free float of HHI.
NIFTY100 Index Rebalance Preview: Five Potential Changes in September
- We are past the halfway mark in the review period for the September rebalance of the NIFTY100 Index. We see five potential changes which should be announced end August.
- There is a high probability of Tata Power (TPWR IN), Indian Railway Catering and Tourism (IRCTC IN), Bharat Electronics (BHE IN) and Mphasis Ltd (MPHL IN) being added to the index.
- High probability deletions are Lupin Ltd (LPC IN), Jubilant Foodworks (JUBI IN), Zydus Lifesciences Ltd (ZYDUSLIF IN), Punjab National Bank (PNB IN) and Steel Authority of India (SAIL IN).
Brambles (BXB AU): Where Could CVC’s Bid Come In?
- Brambles Ltd (BXB AU) is in preliminary discussions for CVC to acquire all shares in the company. Media speculation indicates the bid would be at an Enterprise Value > A$20bn.
- Brambles Ltd (BXB AU) trades cheaper than its peers and a bid at an EV/EBITDA of 9x would imply a buyout price of A$12.84/share, a 23.1% premium to last close.
- At the last traded price of A$11.58/share, there is upside. Especially if other private equity investors enter the fray. Buy on weakness; hedge market risk with ASX200 futures.
SK Telecom Nearing Zero Foreign Room & May Spark Alternative Trading for KT Corp
- What immediate impact will SKT’s zero foreign room have? The recent trading theme that the local market is paying attention to is the alternative purchase of KT instead of SKT.
- The recent driving force behind SKT’s foreign buying is the growing market preference for defensive stocks with high dividend yields. And KT also meets this condition.
- However, SKT’s foreign room may turn around temporarily: 1. SKT’s deletion possibility from the MSCI through a special change and 2. the FTSE investability down-weight at the June QIR.
Before it’s here, it’s on Smartkarma
