In today’s briefing:
- Newcrest/Newmont – More Selling on the NCM Means More Buying on NEM, And Settlement Logistics Matter
- Medtronic’s M&A of Eoflow Timeline Postponed
- Yuanta/P-Shares Taiwan Div Plus ETF Rebalance Preview: In-The-Money; Turnover & Trade Remain High
- Keisei Electric: Activists Arrive As Expected
- EOFlow/Medtronic: Signs of Life
- Gina Can’t “Liontown” SQM’s Bid For Azure
- Key Points to Consider at This Stage Regarding the Year-End Ex-Dividend Play
- Ecopro Innovation Is Selling Ecopro BM Shares
- Increasing Probability of Kakao Corp Losing Its Controlling Shareholding of Kakao Bank
- What To Make Of Hollysys’ Latest Offer
Newcrest/Newmont – More Selling on the NCM Means More Buying on NEM, And Settlement Logistics Matter
- Today saw 65mm shares of Newcrest Mining (NCM AU) print at the close and 85+mm shares crossed in blocks post-close. There was another 15mm shares traded in additional excess volume.
- That suggests a certain lack of “risk taking” by passive managers, increasing today’s trade in NY.
- Furthermore, the settlement logistics appear to indicate an interesting trade to do 7 November (worth checking with your custodian/broker).
Medtronic’s M&A of Eoflow Timeline Postponed
- On 25 October, Eoflow announced that the M&A of Eoflow by Medtronic has been postponed.
- The closing date for Eoflow’s stock transfer agreement with Medtronic has now been changed to 3 January 2024.
- Although we believe Medtronic will continue to pursue Eoflow, the M&A tender offer price could be lowered to about 26,000 won, which would be nearly 20% higher than current price.
Yuanta/P-Shares Taiwan Div Plus ETF Rebalance Preview: In-The-Money; Turnover & Trade Remain High
- Using data from the close on 25 October, there could be 6 adds and 5 deletes to the Yuanta/P-Shares Taiwan Dividend Plus ETF in December.
- There will also be capping and funding flows that will lead to a one-way turnover of 19.5% and a one-way trade of US$1.39bn.
- A long adds/ short deletes trade is up double digits over the last three weeks and there are a few trade adjustments based on the new rankings.
Keisei Electric: Activists Arrive As Expected
- Just as we suspected earlier in the year, there is now talk of an impending investor activism campaign targeting Keisei Electric Railway Co (9009 JP).
- The activist is Palliser Capital, a multi-strategy fund based in London and run by former employees of Elliott Management, a company well-known for its activist campaigns in Japan.
- Their proposal is simple and straightforward, requesting for a 35% reduction in Keisei Electric’s Oriental Land holding.
EOFlow/Medtronic: Signs of Life
- When EOFlow (294090 KS) was suspended on the 11th October, and ceased global sales, either the Medtronic (MDT US) deal was (largely) toast; or it was a tactical move.
- I’m firmly in the latter camp. Insulet‘s lawsuit was expected. And completing the transaction enables the more financially and legally resource-rich MDT to become the party to the litigation.
- The SPA between Jesse Kim and MDT was expected to complete on 25 October. That was not a hard date. It has now been pushed out to 3 January 2024.
Gina Can’t “Liontown” SQM’s Bid For Azure
- When lithium mining play Azure Minerals (AZS AU) was halted this week “regarding a potential change of control transaction“, Sociedad Quimica y Minera (SQM/B CI) was the obvious suitor.
- This was confirmed this morning with a A$3.52/share Offer, a 44.3% premium to undisturbed, by way of a Scheme. A concurrent conditional off-market takeover at A$3.50/share is also present.
- $3.50 is locked in, no matter what. Gina may take her stake up to 19.9%, but it won’t affect the A$3.50 floor. But it may kickstart a competitive bidding situation.
Key Points to Consider at This Stage Regarding the Year-End Ex-Dividend Play
- The pivotal question now is the number of these companies that will effectively defer their year-end ex-dividend date to April next year.
- The most reliable way to accurately confirm this would be to check how many of them will publicly announce the dividend reference date two weeks before the December year-end deadline.
- This will serve as the most critical indicator in determining whether this year’s year-end flow trading event, the most significant in Korea, will recur.
Ecopro Innovation Is Selling Ecopro BM Shares
- On 26 October, it was announced that Ecopro Innovation is selling 160k shares of Ecopro BM shares (0.2% of outstanding shares), representing about 32 billion won.
- Although the percentage of shares is small relative to its outstanding shares, this additional selling is likely to further negatively impact Ecopro BM’s shares in the near term.
- Ecopro BM’s shares have seen a significant drop in price over the past few months, but its current P/E (87.3x in 2023) and EV/EBITDA (46.9x in 2023) multiples remain unattractive.
Increasing Probability of Kakao Corp Losing Its Controlling Shareholding of Kakao Bank
- In this insight, we discuss the increasing probability of Kakao Corp (035720 KS) losing its controlling shareholding of KakaoBank (323410 KS).
- The FSS Chairman Lee Bok-Hyun emphasized that the FSS may punish Kakao Corp for a potential stock manipulation of S.M.Entertainment amid the M&A tender offer process earlier this year.
- At this point, the higher probability event appears to be a combination of fine and Kakao Corp selling at least 10% of its stake in Kakao Bank to another company.
What To Make Of Hollysys’ Latest Offer
- Hollysys (HOLI US), a leading automation control system solutions provider in China, has been subject to at least six indicative Offers since December 2020, ranging from US$15.47/share to $US$25/share.
- Yue Xu and Lei Fang, the co-chief operating officers of Hollysys, who previously tabled a NBIO of US$23.00/share in August 2021, have now pitched a US$25/share proposal.
- What is different this time? >32% of the share registry has banded together to demand changes. That’s dramatically different vs previous Offers.
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