In today’s briefing:
- Porsche IPO Preview
- Raysum (8890 JP) Mystery Bidder Is a Hedge Fund – And That Makes It More Interesting
- Central Glass (4044 JP) – Huge Buyback Tender, Meant For Murakami-San’s Exit, Not Yours
- But Wait … Even More Penalties In The Link Admin/D&D Situation
- Twitter V. Elon V Twitter: Elon Finally Hits A Vein
- Chubu Steel Plate (5461) – Unusual TOPIX Inclusion Possibility
- True/DTAC Pop As Council Of State Rules NBTC Has No Teeth
- Fengxiang (9977 HK): MGO Expected To Follow Judicial Auction
- Tencent Nearing Our Bear Target to Reverse from Short to Long
- DTAC/True Merger: Council of State’s Decree Paves the Way for Completion
Porsche IPO Preview
- The Porsche IPO is expected to be the second largest IPO ever in Germany. Total proceeds from the IPO will be 18.1 billion to 19.5 billion euros.
- The IPO price range is from 76.50 euros to 82.50 euros per share, which suggests a valuation of 70 billion to 75 billion euros.
- After the IPO, Volkswagen will have an extraordinary shareholders meeting in December to propose to pay 49% of total proceeds to shareholders in early 2023 as a special dividend.
Raysum (8890 JP) Mystery Bidder Is a Hedge Fund – And That Makes It More Interesting
- Raysum Co Ltd (8890 JP) has been in a weird kind of limbo for well over a year. The Chairman/Founder resigned late last year for health reasons.
- The company needed to take action to stay listed on TSE Standard. There was a plan to transfer 60+% of the shares to a foundation, through an odd arrangement.
- Then a hedge fund stepped up and said “I’ll have 64% of the company at a near life-time high.” So now we have an interesting deal. And interesting potential future.
Central Glass (4044 JP) – Huge Buyback Tender, Meant For Murakami-San’s Exit, Not Yours
- Activist Murakami-san and entities spent 4+ years going from 2% to 30% of Central Glass (4044 JP). In that period, they helped management change governance.
- There were buybacks, asset sales, cross-holding sale decisions, and a new Mid-Term Management Plan. The stock went up, so now it is time to get out.
- True to Murakami-san style/form, it is an own-share Tender Offer by the TargetCo which means most other active holders can’t really participate. It’s high-quality greenmailgagement.
But Wait … Even More Penalties In The Link Admin/D&D Situation
- Earlier this week, Link Administration (LNK AU) rejected Dye & Durham’s revised proposal to factor in any redress payments from the UK’s FCA in regards to the Woodford Fund.
- FCA has now assessed an appropriate penalty of £50mn in addition to the previously announced restitution payment of £306.1mn.
- The FCA is all but telegraphing it will default LFSL unless Link steps in. Link says it has made no such commitment. D&D should walk.
Twitter V. Elon V Twitter: Elon Finally Hits A Vein
- Bondholders on alert as a whistleblower complaint gives Elon’s case the substance he lacked as he tries break his agreement to buy Twitter
- But this doesn’t win Elon’s case—he has to prove deliberate fraud, which is far from clear
- It’s much easier for Twitter to prove Elon’s biggest complaint is buyers’ remorse—which isn’t sufficient grounds to terminate the deal.
Chubu Steel Plate (5461) – Unusual TOPIX Inclusion Possibility
- Today, Nagoya Premier-listed Chubu Steel Plate (5461 JP) announced that it had applied today to be listed in Tokyo.
- It is one of very few Japan names not listed in Tokyo. A TSE listing examination will be conducted, and there is a possibility it moves to TSE Prime.
- There are 6 key segment transfer and listing requirements to gain a listing in TSE Prime. Chubu Steel Plate is really close.
True/DTAC Pop As Council Of State Rules NBTC Has No Teeth
- According to media reports, Thailand’s Council of State has ruled the NBTC has no authority to approve or reject the True Corp (TRUE TB) / Total Access Communication (DTAC TB) merger.
- The NBTC can prescribe measures to govern the deal but these appear almost of no consequence.
- The ruling is a positive development for the merger getting over the line. Both stocks enjoyed strong gains today.
Fengxiang (9977 HK): MGO Expected To Follow Judicial Auction
- The controlling shareholders of Shandong Fengxiang Co Ltd-H (9977 HK), a company engaged in chicken breeding, slaughtering, and processing, are unable to meet their debts.
- As such, these shareholders who hold 70.92% of shares out in Fengxiang, via domestic shares, have been forced into a judicial auction, the completion of which may trigger an MGO.
- Taking pointers from Dongzheng Automotive Finance (2718 HK)‘s recent auction means we back out a possible payment around late December – on the assumption an unconditional MGO is triggered.
Tencent Nearing Our Bear Target to Reverse from Short to Long
- Tencent short from 395 is nearing our 282/264 target zone where we see a low to reverse to long as bull divergence matures.
- Tencent 282/264 buy zone (cycle low due in early October) targets 335 once back above 310.
- MACD bull divergence is more constructive and warns of an upside surprise in 2023 (after a Q1 decline) to challenge 395/400 macro pivot resistance.
DTAC/True Merger: Council of State’s Decree Paves the Way for Completion
- The press reports that the Council of State has stated that the regulator, NBTC, can only prescribe measures to govern the Total Access Communication (DTAC TB)/True Corp Pcl (TRUE TB) merger.
- The Council of State decree paves the way for the merger to complete and the launch of the VTOs. The NBTC remedial measures will likely focus on consumer protection measures.
- The current share price ratio is 9.150x vs the swap ratio of 10.221x. At last close, DTAC and True’s gross spread to the VTO price is 4.4% and 1.8%, respectively.
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