In today’s briefing:
- Lee Family to Sell 2.6 Trillion Won in Samsung Companies to Pay for Inheritance Taxes
- Samsung Electronics Placement – Somewhat Well Flagged but Could Have Timed It Better
- TOPIX Inclusions: Who Is Ready (Jan 2024)
- Taisho Pharma (4581) – Slouching Activism May Not Get This Bumped
- Offshore China ETFs Rebalance Preview: Two Changes Expected in March
- Lasertec (6920) Accelerated Block Offering – ¥60bn Likely Easily Taken Up
- Lasertec Placement – Opportunistic Selldown Will Be Easily Digested by the Market
- Pacific Textiles (1382 HK): Material Benefits
- Aequitas 2024 Asia IPO Pipeline – Hong Kong
- A Comprehensive Update on Implementation of Block Deals Pre-Disclosure in Korea
Lee Family to Sell 2.6 Trillion Won in Samsung Companies to Pay for Inheritance Taxes
- Lee family plans to sell additional 2.6 trillion won worth of Samsung Group companies as part of their fourth installment of inheritance taxes.
- This inheritance tax share sale is likely to have a negative impact on Samsung Electronics, Samsung C&T, Samsung SDS, and Samsung Life Insurance.
- This may be just a coincidence but the regulators announced today a temporary ban on stock short selling which should help the Lee family to unload their shares.
Samsung Electronics Placement – Somewhat Well Flagged but Could Have Timed It Better
- KEB Hana Bank, on behalf of the Lee family, is looking to raise up to US$1.6bn via selling 0.5% of Samsung Electronics (005930 KS)
- The deal appears to be somewhat well flagged, however, the timing could have been much better.
- In this note, we will run the deal through our ECM framework and talk about the recent updates.
TOPIX Inclusions: Who Is Ready (Jan 2024)
- Quiddity’s “Who is Ready” series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.
- Furuya Metal (7826 JP) and Visional (4194 JP) are expected to be included in the TOPIX index at the end of January 2024
- There are couple of other pre-event names that we have been tracking for the past few months.
Taisho Pharma (4581) – Slouching Activism May Not Get This Bumped
- Six+ weeks ago, the founding family which controls a 33% stake in cash-rich Taisho Pharmaceutical Holdin (4581 JP) announced a Tender Offer MBO to buy out minorities.
- ¥8,620/Share is 0.85x PBR but the takeover is at 0.72x operating assets with net debt at zero That’s low – comps are 2+x book and twice the EV/EBITDA ratio.
- But the scourge that is cross-holding investors blindly following management means they have 61-63% before this gets started, and only one small firm has voiced an objection.
Offshore China ETFs Rebalance Preview: Two Changes Expected in March
- Based on the close of 8 January, there could be two changes for the iShares A50 China (2823 HK)/ CSOP A50 (HKD) (2822 HK) in March.
- Shaanxi Coal Industry (601225 CH) and China Everbright Bank Co A (601818 CH) could replace Bank Of Ningbo Co Ltd A (002142 CH) and Aier Eye Hospital Group (300015 CH).
- The impact of passive trading will be higher on the inclusions compared to the deletions. Then there are cash and carry positions that will be rebalanced, adding to flow.
Lasertec (6920) Accelerated Block Offering – ¥60bn Likely Easily Taken Up
- Today after the close, there was word of an Accelerated Block Offering by two banks on Lasertec Corp (6920 JP), selling ¥61+bn or US$425mm of shares.
- The Nikkei 225 hit a new 34-year high today, and this caused some tech stocks and high-weights to perform very well vs their peers.
- This should cause the deal to get taken up easily. HOWEVER, it pays to know where the stock is. The register isn’t what volume tells you it might be.
Lasertec Placement – Opportunistic Selldown Will Be Easily Digested by the Market
- MUFG Bank and Mitsubishi UFJ Trust and Banking are looking to raise around US$425m from selling their respective stakes in Lasertec Corp (6920 JP).
- Given the strong momentum on the stock, combined with the wave of shareholders ending their cross-shareholdings in Japan, we would argue that the deal is somewhat expected.
- Despite the remaining overhang on the stock, the deal would be easily digested by the market as well, representing just 0.14 days of the firm’s three month ADV.
Pacific Textiles (1382 HK): Material Benefits
- Back in June 2017, Toray Industries (3402 JP) acquired a 28.03% stake in Pacific Textiles (1382 HK) (@ HK$10/share). Rumours that Toray would take this stake to 50% never unfolded.
- Pacific Textiles is currently trading at HK$1.30/share, its lowest level outside of the GFC.
- Relatively inexpensive, high digit yield and M&A angle, Pacific Textiles remains attractive. This is supported by the recent Offer for Weiqiao (2698 HK) and David Webb taking a 5% stake.
Aequitas 2024 Asia IPO Pipeline – Hong Kong
- In this note, we will take a look at the Asia Pacific IPO pipeline for 2024, starting with Hong Kong.
- This list has been compiled on a best effort basis from tracking the company filings and through various other sources.
- The deals you see in this note are only a part of our full IPO pipeline tracker. Feel free to drop us a message for additional information on these IPOs.
A Comprehensive Update on Implementation of Block Deals Pre-Disclosure in Korea
- The effective date, required by law to start six months post-promulgation, suggests implementation around July this year.
- Enforcement decrees and regulations, under the Financial Services Commission’s purview, must be confirmed before the effective date (within six months post-promulgation). The announcement is likely in early to mid-March.
- Expecting the amendment, there may be a pre-July surge in block deals as major shareholders expedite plans, creating assertive market activity in the first half with potential trading opportunities.
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