In today’s briefing:
- Korea Zinc’s Latest Shareholder Roll & MBK’s Triggers to Sweeten Tender Price
- Tokyo Metro (9023 JP): IPO Listing & Fast-Entry Approved
- The Biggish Sep 2024 “Thursday-Friday Trade”
- KOSDAQ150 Index Adhoc Rebalance: HLB Therapeutics Replaces Jeisys Medical
- STAR50/STAR100 Index Rebalance Preview: Massive Outperformance in Last Two Months; Time to Unwind?
- REA’s Improved Terms For Rightmove
- Why MBK’s Move into Local Hostile Takeover Scene Matters: Focus on SK Inc and Lotte Corp
- Tokyo Metro (9023 JP) IPO: The Bull Case
- Sino-American Silicon GDR Offering – Relatively Large One to Digest, Although Discount Is Attractive
- What Are Locals Saying About Potential Allies to Choi Family in Fight for Korea Zinc?
Korea Zinc’s Latest Shareholder Roll & MBK’s Triggers to Sweeten Tender Price
- MBK is watching for a 1 million share trading volume, as that may prompt neutral institutional investors to sell rather than participate in the tender, triggering a price hike.
- MBK may raise the tender price to ₩900,000, a 35% jump, with a local pension fund CIO suggesting it’s the sweet spot for participation.
- MBK believes securing the minimum target would give them 44% voting rights, enough to push their proposals, indicating they’ll go all-in for that 7% stake in this first attempt.
Tokyo Metro (9023 JP): IPO Listing & Fast-Entry Approved
- Tokyo Metro (TKYMETRO JP) is scheduled to go public on 23 October 2024 with an IPO valuation of ~$4.4bn and a float market cap of ~$2.2bn.
- Fast-Entry for the one Global Index is expected at the close of 29 October 2024 with forecasted demand of ~17.4m shares and ~$133m.
- Quarterly inclusion at the May 2025 review has a higher probability with a slight price rally or an elevated IPO offering price. Forecasted demand is ~23.2m shares and ~$177m.
The Biggish Sep 2024 “Thursday-Friday Trade”
- Every year it’s the same trade. This year it is Thursday and Friday. There is some funkiness to Monday too.
- There is meaningful directional buying on one day, which then kind of gets stretched a bit. This year, circumstances suggest high confidence buying should be at the top end.
- This year, because circumstances, I expect the trade is a lot larger than last year. I’d say ¥1.6trln.
KOSDAQ150 Index Adhoc Rebalance: HLB Therapeutics Replaces Jeisys Medical
- HLB Therapeutics (115450 KS) will replace Jeisys Medical (287410 KS) in the KOSDAQ 150 Index (KOSDQ150 INDEX) next week.
- Passive trackers will need to buy 1.8 days of ADV in HLB Therapeutics (115450 KS) and sell over 4 days of ADV in Jeisys Medical (287410 KS).
- Recent ad hoc inclusions to the KOSDAQ 150 Index (KOSDQ150 INDEX) have jumped post announcement of index inclusion but have sold off after the inclusion.
STAR50/STAR100 Index Rebalance Preview: Massive Outperformance in Last Two Months; Time to Unwind?
- 90% of the way through the review period, there could be 1 change for the SSE STAR50 (STAR50 INDEX) and 5 changes for the STAR100 Index.
- We estimate turnover of 1% for the STAR50 INDEX and 5.5% for the STAR100 Index. The net round-trip trade is CNY 3.2bn (US$453m).
- The forecast add to the SSE STAR50 (STAR50 INDEX) has massively outperformed the forecast deletion from the index over the last two months.
REA’s Improved Terms For Rightmove
- Rightmove PLC (RMV LN), UK’s largest real estate portal, has twice rejected REA Group Ltd (REA AU) cash/scrip non-binding Offers this month.
- REA has upped terms to 341 pence + 0.0422 new REA shares per Rightmove share, or 770p/share, a 39% premium. If completed, Rightmove’s shareholders would own ~20.1% of the MergeCo.
- Thrice rejected? I think Rightmove should engage. REA also has until the 30th September to make a formal Offer. Or walk away.
Why MBK’s Move into Local Hostile Takeover Scene Matters: Focus on SK Inc and Lotte Corp
- The new 100% mandatory tender offer rule could push buyers to lower premiums for major shareholders, potentially increasing hostile takeover attempts as costs get shared with minority shareholders.
- It looks like MBK is eyeing this situation as a chance to redefine their strategy. This really shows how serious MBK is about the Korea Zinc deal.
- Watch for top-tier assets available via hostile takeovers, particularly companies like SK Inc and Lotte Corp, where low shareholder stakes may lead to management conflicts.
Tokyo Metro (9023 JP) IPO: The Bull Case
- Tokyo Metro (TKYMETRO JP), a mass transit operator, is seeking to raise up to US$2.3 billion. Pricing is on 15 October, and the listing is on 23 October.
- Tokyo Metro is held 53.42% by the Minister of Finance and 46.58% by the Tokyo Metropolitan Government.
- The bull case rests on a core high-quality asset, future growth drivers, top-quartile profitability, high FCF generation, and peer-leading dividend payout.
Sino-American Silicon GDR Offering – Relatively Large One to Digest, Although Discount Is Attractive
- Sino American Silicon Products (5483 TT) is looking to raise US$287m in its GDRs offering. Proceeds will be used to purchase overseas raw materials, repay bank loans and purchase machinery.
- Similar to previous GDR listings, the deal has had a long drawn out approval process. Thus, the deal is a very well flagged one.
- The deal is a relatively large one to digest at 15.7 days of the stock’s three month ADV.
What Are Locals Saying About Potential Allies to Choi Family in Fight for Korea Zinc?
- In this insight, we discuss three particular allies that could help the Choi family that have been highlighted by the local media including Hanwha, KIS, and Softbank.
- The Hanwha Group is one of the largest shareholders of Korea Zinc. In addition, Hanwha Group Vice Chairman Kim Dong-Kwan has a close relationship with Korea Zinc Chairman Choi Yoon-Beom.
- Korea Zinc is planning to hold an important press conference on the 24 September to reveal its position on the tender offer of Korea Zinc shares by MBK.
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