In today’s briefing:
- L’Occitane (973 HK): Here We Go Again
- China ETF Inflows & Impact: Concentrated, Then Diversified; Central Huijin Steps Up
- Dai-Ichi Life for Benefit One (2412) – We Have a Deal! Bumped Small
- Pasona (2168) – Less Wrong Than Before But How Wrong Still Depends on Nambu-San
- TCM (570 HK): We’ve Been Here Before
- Benefit One (2412 JP): Dai-Ichi Life (8750 JP) Prevails with a JPY2,173 Offer
- Investigating Potential Block Deals Involving Korea’s Financial Holding Companies
- Quiddity Leaderboard KOSPI 200 Jun 24: L&F (066970) Likely To Miss Out on Fast Entry in March
- Thai Credit Bank IPO Trading – Half the Deal Already Spoken For, the Other Half Should Be Liquid
- Welbe (6556 JP): Polaris Capital-Backed MBO Tender Offer at JPY1,089
L’Occitane (973 HK): Here We Go Again
- From 2018 onward, French beauty retailer L’Occitane (973 HK) has apparently drawn interest from the likes of Advent International and its controlling shareholder Chairman Reinold Geiger – amongst others.
- There is substance to these “Offers” – Geiger confirmed in August 2023 he was contemplating a conditional voluntary general Offer. He holds 72.65% of shares out according to the HKEx.
- The latest news, with no definitive source, is that Blackstone is mulling the possibility of teaming up with Geiger on a buyout.
China ETF Inflows & Impact: Concentrated, Then Diversified; Central Huijin Steps Up
- Nearly US$37bn has flowed into mainland China listed ETFs since 2 January and could be driven by the National Team supporting the market. Central Huijin has announced their ETF buying.
- Most of the inflows have been focused on large cap indices including CSI 300, SSE50, CSI 500, CSI 1000, ChiNext, STAR50 and Chinext50 indices.
- While the inflows were initially focused on the CSI 300, there has been a diversification recently with big inflows to the SSE50, CSI 500, CSI 1000 and ChiNext indices.
Dai-Ichi Life for Benefit One (2412) – We Have a Deal! Bumped Small
- Post-Close, the Nikkei carried a breathless headline that Dai Ichi Life Insurance (8750 JP) had agreed a deal for Pasona Group (2168 JP)‘s stake in Benefit One Inc (2412 JP).
- Not long afterwards, TDNet Filings provided Benefit One results, a change to BeneOne’s Opinion on the M3 Offer, and Board Resolution to Support/Recommend DIL’s TOB, now at ¥2,173 and ¥1,526/share.
- Looks like a done deal. And this will also likely delay the start of the DIL Bid to 26-28 February timeframe.
Pasona (2168) – Less Wrong Than Before But How Wrong Still Depends on Nambu-San
- Today, Dai Ichi Life Insurance (8750 JP) announced a TOB for Benefit One Inc (2412 JP) having agreed a deal with Pasona Group (2168 JP) to sell into a buyback.
- Pasona will get ¥1,526/share, and having agreed, it announced the expected special profit to be booked in the FY to 31 May 2024.
- At ¥113.6bn on a consolidated basis (¥122.3bn on parent), less ¥1.165bn of associated costs, that’s ¥112.4bn at the lower end. That’s ¥2,870/share. Then there’s the rest of the business.
TCM (570 HK): We’ve Been Here Before
- China Traditional Chinese Medicine (570 HK) (“TCM”) is the traditional Chinese medicine arm of SASAC-managed China National Pharmaceutical Group Corporation (CNPGC), one of the largest healthcare groups in China.
- By my reckoning, TCM has fielded three Offers in the past decade, all from Sinopharm Hongkong, an indirect wholly-owned subsidiary of CNPGC and TCM’s major shareholder.
- TCM was suspended “pursuant to the Code on Takeovers and Mergers” earlier today. The Real McCoy? A no-deal again from CNPGC/Sinopharm? And why didn’t the last Offers complete?
Benefit One (2412 JP): Dai-Ichi Life (8750 JP) Prevails with a JPY2,173 Offer
- Benefit One Inc (2412 JP) has recommended Dai Ichi Life Insurance (8750 JP)’s revised offer of JPY2,173, a 2.4% and 90.1% premium to the previous offer and undisturbed price, respectively.
- The Board and Pasona Group (2168 JP) secured the highest price. M3 Inc (2413 JP) tabled an alternative proposal but Pasona had concerns about the plan’s tax treatment.
- Based on the irrevocables, the minimum acceptance condition requires a 31.6% minority acceptance rate, achievable due to the high premium and the competitive bidding process.
Investigating Potential Block Deals Involving Korea’s Financial Holding Companies
- Stake sales by Affinity and Bearing PE are attractive due to the absence of special partnerships with Shinhan Financial Group, indicating favorable exit potential at current stock prices.
- KB Financial draws attention due to Carlyle’s ₩240B EB investment in 2020. Carlyle can now convert to shares at ₩48,000/share, yielding 37.08%.
- Woori Financial is intriguing. IMM PE and Eugene PE hold stakes, investing ₩450B and ₩386B respectively. Their yields are 32.55% and 10.45% respectively. No constraints on divestment.
Quiddity Leaderboard KOSPI 200 Jun 24: L&F (066970) Likely To Miss Out on Fast Entry in March
- KOSPI 200 is a Korean blue-chip index that tracks the 200 largest and most-liquid names listed in the KOSPI section of the Korea Exchange (KRX).
- In this insight, we take a look at the names leading the race to become ADDs and DELs during the upcoming semiannual review in June 2024.
- There could be up to four changes in the KOSPI 200 index in the run up to the June 2024 index rebal event including an intra-review fast entry change.
Thai Credit Bank IPO Trading – Half the Deal Already Spoken For, the Other Half Should Be Liquid
- Thai Credit Bank PCL (3674238Z TB) raised around US$281m in its Thailand IPO.
- TCB is a commercial bank that focuses on providing business loans to small and medium-size enterprises (SMEs), nano loans and micro credits to merchants, and home loans for individual customers.
- We had looked at the firm’s past performance and shared our thoughts on TCB’s valuation in earlier notes. In this note, we will look at the trading dynamics.
Welbe (6556 JP): Polaris Capital-Backed MBO Tender Offer at JPY1,089
- Welbe Inc (6556 JP) has recommended a Polaris Capital-sponsored MBO tender offer of JPY1,089 per share, a 30.0% premium to the undisturbed price (8 February).
- The transaction is a two-step acquisition through a cash tender offer and subsequent squeeze-out. The lower limit of the tender offer is set at a 46.67% ownership ratio.
- Based on the irrevocables, the minimum acceptance condition requires a 30.1% minority acceptance rate. While a knockout offer, the acceptance condition is achievable.
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