In today’s briefing:
- JPX Proposes BIG Changes To TOPIX Rules, Affects IPOs More Than Market
- Blackstone Does a BIG Deal for Infocom (4348) – Minorities Get ¥6,060/Share
- [JAPAN ACTIVISM] – Murakami Group Goes Activisting on Exedy (7278) – Room To Run
- Guzman Y Gomez IPO: Listing & Index Inclusion Timeline
- Hyundai Motor’s Special Shareholder Return Plan Likely Unveiled in August IR Event
- Hong Kong Property: In Need Of A Good Story
- KDDI and Lawson: Loyalty Points Just the Start
- Webtoon Entertainment IPO – Further Thoughts on Valuation – Acquisitions, Buyouts
- Capitol Health (CAJ AU): All-Scrip Non-Binding Merger with Integral Diagnostics
- Guzman Y Gomez IPO Trading – Strong Demand, Not All Shares in Escrow
JPX Proposes BIG Changes To TOPIX Rules, Affects IPOs More Than Market
- In 2021 the JPX established new Listing Rules, and in April 2022 introduced new market segments (Prime/Standard/Growth) to much fanfare. Today, the TSE basically said those changes were meaningless.
- Today, the TSE announced proposed new rules for TOPIX constituent selection. There is a 2-month consultation period, then rules come out end-Sep 2024. Expect few changes from the Proposal.
- NextGen TOPIX will be created October 2026. 3-4 dozen ADDs, 500-600 DELETEs to create an index of 1,100-1,200 names. Some obvious large impacts 2+yrs from now, but this changes IPOs.
Blackstone Does a BIG Deal for Infocom (4348) – Minorities Get ¥6,060/Share
- 15 weeks ago, a specialised media outlet suggested Teijin Ltd (3401 JP) was in process to sell its stake in Infocom Corp (4348 JP).
- I caught up later, after the stock had run up significantly, but writing bullishly here and here. Since then, the stock is up another 33-35%.
- Today we finally got the announced deal. Blackstone will buy the stock at a valuation of ¥280bn, paying ¥6,060/share for the minority stake, and buying back Teijin’s stake at ¥4,340/share.
[JAPAN ACTIVISM] – Murakami Group Goes Activisting on Exedy (7278) – Room To Run
- Late May, Aisin (7259 JP) announced a sell-down of its 34% stake in Exedy Corp (7278 JP) – a big non-dilutive offering, pricing 11% below undisturbed. Exedy announced a buyback.
- Announced on the 27th of May, shares fell sharply the next day, it priced on the 3rd, and offering shares traded on the 10th. Then the price started climbing back.
- My first and second pieces argued that buyback accretion, index impact, and change in register shape all meant it was a buy. Activist Murakami agreed, now he has 6.5%.
Guzman Y Gomez IPO: Listing & Index Inclusion Timeline
- Guzman Y Gomez (0817833D AU) has raised A$335.1m in a primary + secondary offering, valuing the company at A$2.23bn. The stock starts trading on the ASX Ltd (ASX AU) today.
- Just over 54% of the shares are escrowed which means there is a lot of stock that will be available for sale on listing day.
- Guzman Y Gomez (0817833D AU) could be added to the S&P/ASX 300 Index in September and there could be global index inclusions in November and December.
Hyundai Motor’s Special Shareholder Return Plan Likely Unveiled in August IR Event
- Hyundai’s IR team appears to have communicated that a new shareholder return policy would be unveiled at the rescheduled CEO Investor Day in August.
- Hyundai aims to boost shareholder returns above 30% by canceling ₩800B to ₩1T in shares annually. The new dividend strategy won’t debut in August; last year’s three-year plan stands.
- Equal cancellation ratios apply to common and three types of preferred shares. August’s timing, with ISA tax reforms potentially favoring preferred shares, may enhance prefs’ price impact relative to ords.
Hong Kong Property: In Need Of A Good Story
- When property advisors (JLL, Knight Frank, CBRE etc) debate the bottom of Hong Kong’s office/retail market, such commentary is often infused with cautious optimism.
- And for good reason, as vacancies increase, and rents soften.
- Recent press articles and anecdotal evidence suggests market uncertainty lingers, prompting landlords to (further) assess their stance on rents.
KDDI and Lawson: Loyalty Points Just the Start
- KDDI will complete its acquisition of a 50% share in Lawson this month and the chain will then delist.
- KDDI is promising a rapid introduction of services and fresh ideas to leverage its new retail arm.
- It will begin by unifying premium loyalty point membership under the Ponta brand and offer new services that it hopes will help boost share. What out LY.
Webtoon Entertainment IPO – Further Thoughts on Valuation – Acquisitions, Buyouts
- Webtoon Entertainment (WBTN US) is looking to raise up to US$315m in its US IPO, down from an earlier reported float of US$500m.
- Webtoon Entertainment is a global storytelling platform where a community of creators and users discover, create and share new content.
- In our previous notes, we talked about the company’s historical performance, undertook a peer comparison and shared our thoughts on valuation. In this note, we share additional thoughts on valuation.
Capitol Health (CAJ AU): All-Scrip Non-Binding Merger with Integral Diagnostics
- On 17 June, Capitol Health (CAJ AU) disclosed a non-binding merger proposal from Integral Diagnostics (IDX AU) at 0.12849 Integral shares per Capitol share.
- Integral has been granted a four-week exclusivity period that ends on 15 July. The transaction will require approval from the ACCC and Capitol shareholders.
- The offer is attractive compared to historical exchange ratios, trading ranges and peer multiples. At the last close, the gross spread was 11.7%.
Guzman Y Gomez IPO Trading – Strong Demand, Not All Shares in Escrow
- Guzman Y Gomez raised around US$221m in its upsized Australian IPO.
- GYG is a quick service restaurant business with more than 200 restaurants globally. It mainly focuses on fresh, made-to-order, Mexican-inspired food.
- We have looked at the company’s performance and valuation in our past notes. In this note, we talk about the trading dynamics.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Analytics and News
- ✓ Events & Webinars
