In today’s briefing:
- Azure Min (AZS AU): Trading Wide Ahead Of 8th April Vote
- Riso Kyoiku (4714) Partial Tender (¥320/Sh) Followed by Third Party Dilution To Get Hulic to 51%
- HSCEI Index Rebalance Preview: One Change or Two in June?
- Riso Kyoiku (4714 JP): Hulic (3003 JP)’s Partial Tender Offer
- Sep24 Nikkei 225 Rebal – Now 1 ADD, 1 DELETE; Fastie+TEL Still Where the Fun Is
- Azure Minerals (AZS AU): FIRB Approval Concerns Are Overdone
- APM (APM AU): Madison Dearborn’s “Disappointing” NBIO
- Samsung Electronics: Block Deal Sale of 5.2 Million Shares by Lee Boo-Jin
- Samsung Electronics Placement – Better Timing This Time Around
- S-REITs: Climate Disclosures and Inclusion in ESG-Related Equity Indexes
Azure Min (AZS AU): Trading Wide Ahead Of 8th April Vote
- Back on the 19th Dec, Sociedad Quimica y Minera (SQM/B CI)/Hancock offered Azure Minerals (AZS AU) shareholders A$3.70/share by way of a Scheme, a ~52% premium to the undisturbed price.
- Creasy Group (12.64%) and Delphi Group (10.15%) gave irrevocables. Mineral Resources (MIN AU)‘s 14.5% stake was unclear; but they exited on the 21 Feb. “Arbitrageurs should arb. Corporations should Corp“.
- The Transaction Booklet is now out with a Scheme Meeting on the 8th April. The IE says fair. Expected implementation on the 18 April.
Riso Kyoiku (4714) Partial Tender (¥320/Sh) Followed by Third Party Dilution To Get Hulic to 51%
- Today, cram school operator Riso Kyoiku (4714 JP) and 20% owner real estate developer Hulic Co Ltd (3003 JP) amended their Capital and Business Alliance agreement.
- Hulic will buy 25.5% of shares out in a Partial Offer at +43.5% vs last. Then post-tender, they will buy shares at last from the company to go to 51.%
- The founder will sell his 10%. The rest is interesting. It’s a high ROE high div stock. Some own it from higher. Pro-ration is tough to estimate. But we try.
HSCEI Index Rebalance Preview: One Change or Two in June?
- SenseTime Group (20 HK) is a potential deletion in June while Zijin Mining Group Co Ltd H (2899 HK) is a potential inclusion.
- For yet another review, BeiGene (6160 HK) is a close add with the Velocity Test determining if the stock will be added to the index or not.
- Estimated one-way turnover at the rebalance is 2.95% resulting in a one-way trade of HK$1.6bn. Official capping will be based off the close of trading on 4 June.
Riso Kyoiku (4714 JP): Hulic (3003 JP)’s Partial Tender Offer
- Riso Kyoiku (4714 JP) announced a partial tender offer and third-party allotment with Hulic Co Ltd (3003 JP), the largest shareholder. Hulic aims to make Riso Kyoiku a consolidated subsidiary.
- The offer is for a maximum of 39.4 million shares (23.15% post-allotment ownership ratio) at JPY320 per share, a 46.8% premium to the undisturbed price (5 April).
- Irrevocable (from the founder and Chairman) represents a 9.26% post-allotment ownership ratio. The offer is light, but there is no minimum acceptance condition.
Sep24 Nikkei 225 Rebal – Now 1 ADD, 1 DELETE; Fastie+TEL Still Where the Fun Is
- The March 2024 rebal is done and dusted. When announced, there were 2 prospective DELETEs for Sep 2024. Now there is only one expected DELETE, Nippon Paper Industries (3863 JP).
- The one likely inclusion is therefore Ryohin Keikaku (7453 JP). But there is more fun afoot with Fast Retailing (9983 JP) and Tokyo Electron (8035 JP).
- The two stocks – of totally different sectors – interact somewhat, both in determining Nikkei 225 direction, and their relative potential selldowns.
Azure Minerals (AZS AU): FIRB Approval Concerns Are Overdone
- Azure Minerals (AZS AU) shareholders have overwhelmingly approved the dual-track bid from Sociedad Quimica y Minera de Chile (SQM US) and Hancock. The scheme offer is A$3.70 per share.
- The shares fell 7%, seemingly due to concerns about FIRB approval sparked by FIRB’s request for an extension on 3 April and today’s AFR article on China’s Australian lithium holdings.
- FIRB approval should be forthcoming due to Tianqi Lithium (9696 HK) small indirect interest in Andover, Lithium Power International (LPI AU) precedent, and SQM and Tianqi’s strained relationship.
APM (APM AU): Madison Dearborn’s “Disappointing” NBIO
- On the 28th Feb, PE-outfit CVC Asia Pacific bumped its NBIO to A$2.00/share, and was granted exclusive due diligence. On the 27th Mar, CVC said they were “unable to proceed“.
- Today, the 8th April, Madison Dearborn Partners, holding ~29%, has pitched an non-indicative, non-binding Offer at A$1.40/share, in cash, by way of a Scheme. An unlisted scrip option is available.
- A key condition is APM Human Services (APM AU)‘s executive-chair Megan Wynne, founding related parties, and key management, electing scrip. The Independent Board Committee reckons the Offer Price is disappointing.
Samsung Electronics: Block Deal Sale of 5.2 Million Shares by Lee Boo-Jin
- After the market close on 8 April, it was reported that Lee Boo-Jin will sell 5,247,140 shares of Samsung Electronics in a block deal (up to 443 billion won).
- The expected block deal sale price is 83,700 to 84,500 won per share, which represents a discount rate of up to 0.95% compared to the closing price on 8 April.
- We are positive on this block deal sale and on Samsung Electronics. We would take the deal.
Samsung Electronics Placement – Better Timing This Time Around
- KEB Hana Bank, on behalf of Lee Boo-Jin, is looking to raise up to US$325m via selling 0.1% of Samsung Electronics (005930 KS).
- The deal appears to be somewhat well flagged and the company recently reported better operating numbers for 1Q24.
- In this note, we will run the deal through our ECM framework and talk about the recent updates.
S-REITs: Climate Disclosures and Inclusion in ESG-Related Equity Indexes
- New SGX climate-related disclosure requirements based on ISSB’s standards are more stringent than current requirements, most notably regarding mandatory Scope 3 emissions reporting.
- The implications for S-REITs are significant. Real Estate is one of the most emissions-intensive sectors, and Scope 3 emissions comprise 85-95% of total emissions for real estate companies.
- Motivated by a strong “business case” for best-in-class climate performance and transparency, many S-REITs are ahead of the curve, evidenced by prominence in climate-related indexes.
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