In today’s briefing:
- September Nikkei 225 Review – Lasertec, Mercari, Nitori IN, Expected DELETEs Out (Matsui the Biggie)
- NTT’s Partial Offer for Intage (4326) Part Deux – Refining Pro-Ration Expectations
- STAR50 Index Rebalance Preview: Bigger Tracking AUM = Bigger Impact
- T&K Toka (4636 JP): Possible Offer Scenarios as Dalton Ups Its Stake
- ARM Holdings IPO Trading – Sold Hope, Now for Some Reality
- ARM Holdings IPO Trading: Structurally Set up for a First-Day Pop, but Then What?
- Kenedix J-REIT Family Merger – Still Room (And Time) To Move
- Golden Eagle Energy (SMMT IJ): Trading Wide To Terms
- The New Aisin (7259) MTP – Selling Crossholdings, Eventually
- IMAX China (1970 HK): Risk as Scheme Vote on 10 October
September Nikkei 225 Review – Lasertec, Mercari, Nitori IN, Expected DELETEs Out (Matsui the Biggie)
- Today, somewhat earlier than expected), the Nikkei Index Team announced the changes to the Nikkei 225.
- Lasertec Corp (6920 JP), Mercari (4385 JP), and Nitori Holdings (9843 JP) are added. Nippon Sheet Glass (5202 JP), Mitsui E&S Holdings (7003 JP), and Matsui Securities (8628 JP) removed.
- That triggers flows of about ¥480bn a side, and some big, big changes. The announcement helps understand new process better.
NTT’s Partial Offer for Intage (4326) Part Deux – Refining Pro-Ration Expectations
- Last week I wrote about NTT’s Partial Offer for Marketing Consultant Intage (4326) – (with a spurious hyphen at the end).
- In the last couple of days, there have apparently been a few blocks printed on the tape. I have received questions about pricing and pro-ration.
- So here I provide a set of 11 possible pro-ration cases, and suggest ways for traders and investors to think about the risks and possibilities.
STAR50 Index Rebalance Preview: Bigger Tracking AUM = Bigger Impact
- The review period for the December rebalance ends 31 October. We expect the changes to be announced 24 November with the implementation taking place after the close on 8 December.
- We expect the index committee to continue using a 6-month minimum listing history resulting in one change to the index.
- One way turnover is estimated at 1.6% resulting in a one-way trade of CNY 2,259m. The impact on the deletion will be much larger than that on the inclusion.
T&K Toka (4636 JP): Possible Offer Scenarios as Dalton Ups Its Stake
- Nippon Active Value Fund/Michael 1925/Dalton has increased their T&K Toka Co Ltd (4636 JP) shareholding from 22.23% to 23.77% of outstanding shares (22.25% to 23.79% of ownership ratio including share options).
- T&K Toka shares have traded above Bain’s JPY1,400 pre-conditional offer, fuelling speculation of a bump. A rival proposal at least 5% above triggers the “Counter Tender Offer” clause.
- The four possible scenarios with declining probabilities are: Bain calls Dalton’s bluff, Bain marginally bumps, Dalton launches a rival offer or Dalton rollovers its stake into a privatised T&K Toka.
ARM Holdings IPO Trading – Sold Hope, Now for Some Reality
- Softbank Group (9984 JP) raised around US$4.9bn via selling some of its stake in ARM Holdings (ARM US)‘ US IPO.
- ARM develops and licences high-performance, low-cost, and energy-efficient CPU products and related technology, which is used by semiconductor companies and OEMs to develop their own products.
- In our previous notes, we looked at the company’s past performance and valuation. In this note, we talk about the trading dynamics.
ARM Holdings IPO Trading: Structurally Set up for a First-Day Pop, but Then What?
- ARM Holdings (ARM US) has priced its IPO at US$51.00 per ADS, at the top end of the price range. Softbank Group (9984 JP) will raise gross proceeds of US$4.9bn.
- We previously discussed the IPO in ARM Holdings IPO: The Bull Case, ARM Holdings IPO: The Bear Case and ARM Holdings IPO: Unattractive Price Range.
- The ARM IPO is structurally set up for a first-day pop. Beyond the first-day euphoria, ARM will face the daunting task of delivering bullish estimates to justify the IPO price.
Kenedix J-REIT Family Merger – Still Room (And Time) To Move
- In mid-June, three months ago yesterday, Kenedix Office Investment Co (8972 JP), Kenedix Retail REIT (3453 JP), and Kenedix Residential Investment (3278 JP) announced a three-way merger for Nov1.
- All three popped in price, and peaked three weeks later, both outright and vs Peers. Then it fell sharply back.
- It is worth looking at the new Combined “KDX” entity on a pro-forma basis. There should be more to go.
Golden Eagle Energy (SMMT IJ): Trading Wide To Terms
- On the 26 July, Geo Energy Resources (GERL SP) announced an agreement to acquire a majority stake in coal miner Golden Eagle Energy (SMMT IJ) (GEE).
- Via an S&P, GEO intends to buy a 58.7% stake in Golden Eagle from Indonesian conglomerate Rajawali Group for US$154.1mn.
- The completion of the S&P, which is subject to Indonesia’s OJK and Geo shareholder approval, will trigger an MTO at IDR 1,255/share.
The New Aisin (7259) MTP – Selling Crossholdings, Eventually
- Toyota Group autoparts maker Aisin Seiki (7259 JP) today announced a new Medium-Term Plan. They plan to shift their business away from “entrusted” business, towards BEV, Brakes, and “Safe/Comfort Entry”
- They aim to grow revenues 25% from 2021 to 2025 and an additional 10-20% by 2030.
- They also aim to improve investment and capital efficiency, and that’s where we can look at the interesting possibilities.
IMAX China (1970 HK): Risk as Scheme Vote on 10 October
- IMAX China Holding (1970 HK)‘s scheme document is out, with the court meeting scheduled for 10 October. The IFA considers IMAX Corp (IMAX US)‘s HK$10.00 offer fair and reasonable.
- The key condition is approval by at least 75% of disinterested shareholders (<10% of all disinterested shareholders rejection). No independent shareholder holds a blocking stake.
- A recovering box office, early indications of an effort to rally retail NO votes and a high minority participation rate in AGMs pose a risk. The risk/reward profile is unfavourable.
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