In today’s briefing:
- Meituan (3690 HK): Impact of Tencent’s In-Specie Dividend
- Tencent Distribution of Meituan Shares Official – Impact and Index Implications
- KOSDAQ150 Index Rebalance: 11 Changes with a Couple of Surprises
- Nikkei 225 March 2023 Review Quiddity Leaderboard (Nov 2022)
- Halcyon Agri: Hainan Rubber’s Conditional MGO
- OZ Minerals (OZL AU): BHP Ups Offer by 13%; This Should Get Done
- Delhivery IPO Lockup Expiry – US$2.8bn Lockup Release, with Softbank the Largest Holder
- Pendal/Perpetual: Revised Terms As Supreme Court Orders Scheme To Proceed
- OZ Minerals (OZL AU) And BHP Have a Deal – Investors Have an OTM Option on Copper
- Good Morning Japan | Hopes Dashed but Resilience Evident
Meituan (3690 HK): Impact of Tencent’s In-Specie Dividend
- Tencent (700 HK) has announced that it will pay an interim dividend via an in-specie distribution of the bulk of its holding in Meituan (3690 HK).
- Passive FTSE and MSCI trackers will receive shares in Meituan (3690 HK) from their Tencent (700 HK) holdings and they will not need to trade anything in the market.
- First it was JD.com Inc. (9618 HK), now it is Meituan (3690 HK). The market will be looking for other stocks held by Tencent (700 HK) that could be next.
Tencent Distribution of Meituan Shares Official – Impact and Index Implications
- In mid-August at mid-day, a Reuters article suggested Tencent (700 HK) would seek to divest its $24bn stake in Meituan (3690 HK) this year. The stock fell 9% that afternoon.
- The general underlying suggestion was that regulators wanted them to sell. Other articles suggested later both aspects were “untrue”
- With Q3 earnings, Tencent today announced a Jan23 distribution (Mar23 settlement) of 958,121,562 Meituan shares (1 for every 10 Tencent shares held). There are significant flow and index implications.
KOSDAQ150 Index Rebalance: 11 Changes with a Couple of Surprises
- There are 11 inclusions and 11 exclusions for the KOSDAQ 150 Index (KOSDQ150 INDEX) at the December rebalance to be implemented at the close on 8 December.
- We had forecast most of the changes (10 adds and 9 deletes), so there are a few surprises. The inclusion of SillaJen Inc (215600 KS) is the biggest one.
- The adds to the index become short sell eligible from the open of trading on 9 December while the deletions will not be short sell eligible from the same time.
Nikkei 225 March 2023 Review Quiddity Leaderboard (Nov 2022)
- Early predictions for the March 2023 Nikkei rebalance (TBA early Feb) are little changed. One way turnover would still be about 1.4%. I see 3 ADDs and 3 DELETEs.
- The 3 ADDs should be Oriental Land (4661), Renesas Electronics (6723), and Japan Airlines (9201). The 3 DELETES Toho Zinc (5707), Toyobo (3101), and Nippon Light Metal (5703).
- Oriental Land is the one to watch in March. The Sep 2023 rebalance and subsequent ones are smaller in size but more interesting in impact.
Halcyon Agri: Hainan Rubber’s Conditional MGO
- Halcyon Agri (HACL SP) has announced Sinochem, its largest shareholder with 65.2%, has entered into a SPA to sell 36% of shares out to China Hainan Rubber Industry (601118 CH).
- Upon completion of the SPA, Hainan Rubber will make an MGO, conditional on a 50% tendering acceptance. Sinochem has provided an undertaking not to tender its remaining 29.2% stake.
- The Offer Price? The SPA price is US$0.315/share and the Offer Price will be the SGD equivalent at the close of the SPA.
OZ Minerals (OZL AU): BHP Ups Offer by 13%; This Should Get Done
- BHP Group has made a revised conditional, non-binding and indicative proposal to acquire all shares in OZ Minerals Ltd (OZL AU) at A$28.25/share, 13% higher than its earlier offer.
- The OZ Minerals Board has agreed to give BHP Group Ltd (BHP AU) exclusive due diligence access for 4 weeks and intends to unanimously recommend the revised proposal.
- Barring a competing proposal, this is BHP Group‘s best and final price – expect the stock to trade close to A$28/share today.
Delhivery IPO Lockup Expiry – US$2.8bn Lockup Release, with Softbank the Largest Holder
- In May 2022, Delhivery raised around US$680m in its India IPO, the company is backed by a host of financial investors, the largest being Softbank.
- Delhivery is an online logistics service provider which covers express parcel delivery, heavy goods delivery, part truckload (PTL) freight, truckload (TL) freight, supply chain solutions, cross border solutions etc.
- In this note, we will talk about the upcoming lockup expiry.
Pendal/Perpetual: Revised Terms As Supreme Court Orders Scheme To Proceed
- Under the revised terms, Pendal (PDL AU) shareholders will receive 1 Perpetual (PPT AU) share for every 7 Pendal shares plus $1.65/share cash versus 7.50 Pendal shares and $1.976 cash.
- Separately, the Supreme Court of NSW ruled that Perpetual cannot delay the Scheme on the expectation of a more favourable Offer for the company.
- The first court hearing for the Scheme has been deferred until next week to seek orders convening the Scheme Meeting and for the despatch of the Scheme Booklet to shareholders.
OZ Minerals (OZL AU) And BHP Have a Deal – Investors Have an OTM Option on Copper
- After nearly 3 months of no talks and movement, then a flurry of both, BHP Group Ltd (BHP AU) and OZ Minerals Ltd (OZL AU) have an agreed Revised Proposal.
- OZ Minerals Board has agreed to support the Revised Proposal at A$28.25/share, a 13% bump, subject to due diligence provided on an exclusive basis for four weeks.
- A fully-franked dividend or capital return will be allowed (Scheme price to be adjusted). This will probably trade tight. One owns a call option on copper for probably 3-4 months.
Good Morning Japan | Hopes Dashed but Resilience Evident
- Good Morning Japan: We strive to provide the very best breaking macro, stock and thematic overnight news that will impact your trading day in Japan. FOLLOW US to keep abreast!
- OVERNIGHT: Hawkish Fed speak weigh on markets but digested as signs of economic weakening-housing, shipping; Markets and Tech resilient. AMAT 1Q guidance supportive; FTX debacle: “Complete failure of controls !”
- JAPAN: Flat open indicated; JPYUSD ¥140 handle; Likely takes the lead from the US; Expect supportive bids into weekend with AMAT guidance
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