In today’s briefing:
- Newcrest: Shareholder Vote On 13th Oct
- IJTT (7315 JP) – Truly Offensive Takeover Price Gets Bumped, Offensively
- Japan – Increasing Shorts on Some Interesting Stocks
- Newmont’s Upcoming (March 2024) ASX Selldown
- Index Rebalance & ETF Flow Recap: STAR50, SET50, AMFI, KOSDAQ150
- SBI To Buy Gumi (3903) Shares To Up Stake to Near 30% (And Try To Avoid Impairment)
- Merger Arb Mondays (25 Dec) – JSR, Benefit One, IRC, Adbri, Link, A2B, Probiotec, Lithium Power
- Meldia DC (1739 JP) – Open House Group Cleans Up Sanei Architecture Sub in TOB.
- ABB’s Offer For Symbio (SYM AU): 7th Feb Shareholder Vote
- IRC Limited (1029 HK): A Wide Spread as the Conditional Offer Opens
Newcrest: Shareholder Vote On 13th Oct
- After being granted due diligence, Newmont (NEM US) firmed an all-scrip Offer on the 15 May for Newcrest (NCM AU) at 0.400 new Newmont shares for each Newcrest share held.
- The Offer, by way of a Scheme, permits Newcrest to pay a special franked dividend of up to $US1.10/share on top of the Offer terms.
- The Scheme Booklet has now been lodged with ASIC. Newcrest shareholders vote on the transaction on the 13 October. The record date for the special dividend is the 19 October.
IJTT (7315 JP) – Truly Offensive Takeover Price Gets Bumped, Offensively
- IJTT Co., Ltd. (7315 JP) was perhaps one of the lower-priced parent takeovers (Isuzu remains central to the bidder post-buyout) at 0.46x book. Today, the last day, it got bumped.
- The new price is ¥850/share vs ¥812/share. +4.7% and a whopping 0.48x book now. ¥850 is where the stock traded just before the announcement. It immediately jumped to ¥875/share.
- It appears Isuzu is not getting any more money out of this, but they should be OK. They are buying back in at 0.48x book. With leverage.
Japan – Increasing Shorts on Some Interesting Stocks
- There are a bunch of stocks that have underperformed the Nikkei 225 (NKY INDEX) and their peers and could be deleted from global passive portfolios early next year.
- The deletion from passive portfolios will lead to a liquidity event at the end of February where passive trackers will need to sell multiple days of ADV.
- Shorts have started to increase on some of the stocks and there will be further positioning as we near the liquidity event.
Newmont’s Upcoming (March 2024) ASX Selldown
- As warned in Newcrest-Newmont Merger: Fancy Index Shenanigans in October, the merger construct meant flowfront, index flowback, then later index flowback.
- We are now between the second and third events. The data on the third is there, but it won’t be obvious to everyone.
- There should be a large, not publicly announced, downweight on Newmont (NEM AU) in the March 2024 index review for the major local indices.
Index Rebalance & ETF Flow Recap: STAR50, SET50, AMFI, KOSDAQ150
- The adhoc KOSDAQ 150 Index rebalance and the regular Nifty200 Momentum30 Index rebalance will be implemented on Thursday and the SET 50 Index rebalance will be implemented on Friday.
- The review cutoff period for a whole bunch of indices ends on 29 December and the announcement of the results and implementation will take place early next year.
- There were big inflows to China ETFs and to Emerging Market ETFs including iShares Core Emerging Mar (IEMG US), Vanguard Emerging Markets (VWO US) and iShares Emerging Markets (EMXC US).
SBI To Buy Gumi (3903) Shares To Up Stake to Near 30% (And Try To Avoid Impairment)
- Today after the close, SBI Holdings (8473 JP) made an announcement it would buy (up to) 3.0mm shares of Gumi Inc (3903 JP) shares between tomorrow and end-March 2024.
- SBI already owns 8.8mm shares, and this would bring them close to 30.0%.
- SBI did not specifically say they would buy on market, but the next 400,000 shares would require a large shareholder filing amendment.
Merger Arb Mondays (25 Dec) – JSR, Benefit One, IRC, Adbri, Link, A2B, Probiotec, Lithium Power
- 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 – Irc Ltd (1029 HK), Orecorp Ltd (ORR AU), Shinko Electric Industries (6967 JP), JSR Corp (4185 JP), Adbri (ABC AU), Probiotec Ltd (PBP AU), Volpara Health.
- Lowest spreads – Tietto Minerals Ltd (TIE AU), A2B Australia (A2B AU), IJTT Co., Ltd. (7315 JP), T&K Toka Co Ltd (4636 JP), Tokyo Rakutenchi (8842 JP), Pact Group.
Meldia DC (1739 JP) – Open House Group Cleans Up Sanei Architecture Sub in TOB.
- Open House (3288 JP) took over Sanei Architecture Planning (3228 JP) this past autumn when banks forced the issue over the former CEO/owner’s mafia ties discovered in an investigation.
- Seedheiwa (1739 JP) now better known as Meldia DC, is ~60% held by Sanei Architecture Planning, and 3% by Mr Koike. It has debt. So it needs cleaning up too.
- This is too light for minorities, and even lighter for whole co, but it’s a done deal.
ABB’s Offer For Symbio (SYM AU): 7th Feb Shareholder Vote
- On the 1st November, cloud communication software outfit Symbio Holdings (SYM AU) backed Aussie Broadband Pty Ltd (ABB AU)‘s reduced cash/scrip Offer of A$2.99-$3.04/share, and entered into a Scheme agreement.
- Superloop Ltd (SLC AU), which had previously made two cash/scrip Offers for Symbio, promptly walked.
- Symbio’s Scheme Meeting has now been tabled for the 7 Feb, with implementation expected on the 28 February. The IE is supportive. This is done – and trading tight.
IRC Limited (1029 HK): A Wide Spread as the Conditional Offer Opens
- The Irc Ltd (1029 HK) IFA opines that a mandatory conditional offer from Nikolai Levitskii (Chairman and 30.61% shareholder) at HK$0.118 per share is fair and reasonable.
- The offer is open, with the first closing date of 12 January 2024. The offer is conditional on the offeror and concert parties representing more than 50% of voting rights.
- While the offer is light, satisfying the minimum acceptance condition is possible. The risk/reward profile is favourable as the upside (25.5% spread) outweighs the downside (5.3% to the undistributed price).
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