In today’s briefing:
- Nidec Goes Hostile On Makino Milling at ¥11,000/Share
- Merger Arb Mondays (06 Jan) – Vesync, Canvest, Get Nice, Fosun Tourism, GAPack, HKBN, Seven & I
- Ohayo Japan | Happy 2025.
- Weekly Deals Digest (05 Jan) – Canvest, Get Nice, CPMC, GAPack, Macromill, ACJennings, LG CNS
- HSTECH Index Rebalance Preview: One Constituent Change & US$884m Trade
- LQ45 Index Rebalance Preview (Jan 2025): Identifying Potential Index Changes
- Nidec (6594) | Sharpens Its Edge in Global Manufacturing
- LG CNS IPO: Valuation Insights
- Insignia Financial (IFL AU): CC Capital Wades In With A $4.30/Share NBIO
- Greatview Aseptic Packaging (468.HK) Update – Newjf’s Offer Should Be Prioritized
Nidec Goes Hostile On Makino Milling at ¥11,000/Share
- This morning, Nidec Corp (6594 JP)announced that it intended to launch a Tender Offer on Makino Milling Machine Co (6135 JP) without the support of Makino management.
- The same pattern as Takisawa Machine Tool (6121 JP). Nidec decides, relying on the METI Guidelines for Corporate Takeovers for procedure, announces, and puts the onus on the Target to accept.
- But shareholders should hope Makino Milling takes a page from the example provided by Chilled & Frozen Logistics Holdings (9099 JP) back in spring 2024. This could get funky.
Merger Arb Mondays (06 Jan) – Vesync, Canvest, Get Nice, Fosun Tourism, GAPack, HKBN, Seven & I
- We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
- Highest spreads: Seven & I Holdings (3382 JP), Get Nice Financial Group Ltd (1469 HK), Arcadium Lithium (LTM AU), ESR Group (1821 HK), Goldlion Holdings (533 HK).
- Lowest spreads: Lifestyle China (2136 HK), Renewable Japan (9522 JP), Macromill, Inc (3978 JP), Fuji Soft Inc (9749 JP), Nec Networks & System Integr (1973 JP).
Ohayo Japan | Happy 2025.
- The Topix ended 2024 up 18%. By comparison, the S&P was up 25% and the Nasdaq up 30%
- Microsoft’s announced a $80 billion in AI data center spending for fiscal 2025
- The Biden administration has blocked Nippon Steel’s $14.9 billion acquisition of US Steel on national security grounds
Weekly Deals Digest (05 Jan) – Canvest, Get Nice, CPMC, GAPack, Macromill, ACJennings, LG CNS
- A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
- ECM developments: LG CNS (LGCNSZ KS) seeks to raise up to US$837 million through a primary/secondary offering.
- Event-Driven developments: Canvest Environmental Protection Group (1381 HK), Get Nice Financial Group Ltd (1469 HK), Greatview Aseptic Packaging (468 HK), Macromill, Inc (3978 JP), Avjennings Ltd (AVJ AU).
HSTECH Index Rebalance Preview: One Constituent Change & US$884m Trade
- The review period for the March rebalance of the Hang Seng TECH Index (HSTECH INDEX) ended on 31 December.
- There could be one constituent change in March. With capping changes, that could lead to a one-way turnover of 2.6% resulting in a round-trip trade of HK$6.88bn (US$884m).
- Horizon Robotics (9660 HK) is also a potential inclusion to the HSCI Index in March, though inclusion in Southbound Stock Connect will only come through in May.
LQ45 Index Rebalance Preview (Jan 2025): Identifying Potential Index Changes
- The review period for the LQ45 Index January rebalance ended 31 December. The changes should be announced the last week of January, becoming effective after the close on 31 January.
- We highlight 4 potential inclusions and 4 potential exclusions for the index at the rebalance. The actual number of changes could be lower at 2-3 a side.
- Nearly all stocks will have over 1x ADV to trade from passive trackers if they are added to or deleted from the index.
Nidec (6594) | Sharpens Its Edge in Global Manufacturing
- Nidec’s tender offer of Makino would strengthen its portfolio, combining advanced machining technologies with automation solutions to lead the global machine tool industry.
- The synergy between Nidec and Makino unlocks cost savings, streamlined operations, and innovative solutions for high-growth sectors like electric vehicles and aerospace.
- We estimate that the deal to acquire Makino would be between 8-13% EPS accretive for Nidec.
LG CNS IPO: Valuation Insights
- LG CNS (LGCNSZ KS), the IT service unit of LG Corp (003550 KS), seeks to raise up to US$837 million through a primary/secondary offering.
- We previously discussed the IPO in LG CNS IPO: The Bull Case and LG CNS IPO: The Bear Case.
- We examine the syndicate’s valuation methodology. Our analysis suggests that LG CNS is attractive in the IPO price range. We would participate in the IPO.
Insignia Financial (IFL AU): CC Capital Wades In With A $4.30/Share NBIO
- Last month, wealth manager Insignia Financial (IFL AU) announced – and subsequently rejected – a A$4.00/share non-binding and indicative proposal from PE outfit Bain Capital.
- The question was whether Bain returned to the well, in a space where Regal (RPL AU) recently binned its Platinum (PTM AU) tie-in; and Perpetual (PPT AU)‘s carve-out has hit a snag.
- Roughly two weeks after that Bain rejection, US-based asset investment manager CC Capital Partners has now tabled a A$4.30/share, in cash, non-binding Offer. That’s probably enough for Insignia to engage.
Greatview Aseptic Packaging (468.HK) Update – Newjf’s Offer Should Be Prioritized
- All Pre-Conditions of Newjf’s Offer have been satisfied. Based on Offer Document, the latest date for posting of the Response Document is Jan.7, 2025. First Closing Date is Jan.21, 2025.
- Newjf will make every effort to complete the acquisition and regain the control of international business so as to protect shareholders’ interests.So, the logic behind the deal is very solid.
- Mengniu’s attitude could be positive. A higher management offer seems more out of reach because the management lacks sincerity. We advise investors not to walk away from Newjf’s Offer easily.
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