In today’s briefing:
- KEPCO (9503 JP): Index Implications of US$3.5bn Primary + Secondary Offering
- Seven & I Holdings (3382 JP): Evaluating the Potential MBO
- Kadokawa (9468 JP): Take Profits as a Sony Privatisation Rumours Surface
- NIFTY200 Momentum30 Index Rebalance Preview: More Changes with New F&O Stocks
- [JAPAN Activism]: Murakami Target Mitsui Matsushima (1518 JP) Getting Sold Down For a Reason
- Arcadium Lithium (ALTM US/LTM AU): Scheme Vote on 23 December as Risks Mount
- KOSPI 200 & KOSDAQ 150 December Rejig Lineup
- Adani Group’s Indictment: Bribery, Fraud, and the Global Fallout
- KOSPI200 Index Rebalance: Adds in Line; Couple of Deletes Are Surprises
- Kansai Electric US$3.5bn Deal Updates – Has Delivered a Decent Correction, as Compared to past Deals
KEPCO (9503 JP): Index Implications of US$3.5bn Primary + Secondary Offering
- Kansai Electric Power (9503 JP) is looking to raise up to US$3.5bn via a primary offering and a sale of Treasury shares. Pricing date is between 26-29 November.
- Kansai Electric Power (9503 JP) is among the better performing stocks from the Electric Utilities industry and trades at higher valuations compared to its peers.
- There will be a fair bit of passive buying with around 29% of the offering being bought at the time of settlement of the shares.
Seven & I Holdings (3382 JP): Evaluating the Potential MBO
- Seven & I Holdings (3382 JP) did not dispute the NHK article’s claims that the founding family aims to raise buyout funds by the end of the fiscal year.
- Since 13 November, there have been conflicting press reports on the MBO offer price. The NHK article’s implied offer price of JPY3,082 seems the most credible.
- The MBO’s aggressive completion timeline pressures Alimentation Couche-Tard (ATD CN) to respond by either overbidding, working with the founding family at the back-end or walking away.
Kadokawa (9468 JP): Take Profits as a Sony Privatisation Rumours Surface
- Kadokawa Dwango (9468 JP) shares rose 16% after Reuters reported that Sony Corp (6758 JP) is in talks to acquire it. Kadokawa confirmed an initial letter of intent.
- The privatisation interest is unsurprising as Kadokawa’s publishing arm, acclaimed intellectual properties, and positioning in the anime industry would be attractive to Sony.
- The upside is limited as the last close reflects a significant takeover premium. There is a risk if a binding proposal emerges, it could be takeunder like Bain/T-Gaia.
NIFTY200 Momentum30 Index Rebalance Preview: More Changes with New F&O Stocks
- There could be 17 changes for the Nifty200 Momentum 30 Index that will be implemented at the close on 30 December. Some changes from earlier following 45 new F&O stocks.
- If all changes are on expected lines, one-way turnover is estimated at 61.5% and that will result in a one-way trade of INR 63.4bn (US$752m).
- The potential inclusions to the index have outperformed the potential deletions since the start of June. This trend could continue for a couple of weeks till the changes are announced.
[JAPAN Activism]: Murakami Target Mitsui Matsushima (1518 JP) Getting Sold Down For a Reason
- Mitsui Matsushima (1518 JP) was trading ¥2,800-3,200 earlier this year before Murakami-san bought a large stake. All the news of coal shut down and cash pile were in the price.
- After he bought, the stock popped. It fell back, went sideways in a range, and for 5 weeks has been falling in a straight line.
- There’s a reason for that. But it may not be a great reason. And the stock is in a great place.
Arcadium Lithium (ALTM US/LTM AU): Scheme Vote on 23 December as Risks Mount
- The Arcadium Lithium (ALTM US) scheme meeting relating to Rio Tinto Ltd (RIO AU)’s US$5.85 offer is on 23 December. The transaction is expected to close in mid-2025.
- The high current 12.3% spread reflects risk related to regulatory and shareholder approvals. The numerous required regulatory approvals pose a risk to completion and/or timing.
- Despite depressed lithium prices, the offer remains unattractive on several fronts. Blackwattle, which opposes the offer, could rally others to force a bump. Rio conceding to a bump is uncertain.
KOSPI 200 & KOSDAQ 150 December Rejig Lineup
- KOSPI 200 & KOSDAQ 150 Dec reshuffle looks set—official lineup drops post-close today.
- Passive flows for KOSPI 200 and KOSDAQ 150 are estimated at 40T KRW and 3.5T KRW, based on typical flow sizes until the effective date.
- These predictions combine my sim results with reliable local intel. The accuracy’s solid enough to start pulling the trigger on trades.
Adani Group’s Indictment: Bribery, Fraud, and the Global Fallout
- Gautam Adani and executives indicted in U.S. for bribery, fraud, and obstructing justice tied to renewable energy projects worth billions.
- Allegations spotlight governance risks, promoter-driven models, and transparency issues in Indian conglomerates, threatening investor trust in Adani Group and renewable energy sectors.
- Adani Group issued media statement saying that charges in indictment are baseless and denied.
KOSPI200 Index Rebalance: Adds in Line; Couple of Deletes Are Surprises
- There will be 4 additions and 5 deletions for the Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) at the next rebalance to be implemented at the close on 12 December.
- The 4 adds are exactly in line with our forecast but a couple of the deletions are surprises. Those two names were close deletes though.
- The are some large shorts on a few deletes and there could be covering over the next few weeks as borrows are recalled and as the stocks drop.
Kansai Electric US$3.5bn Deal Updates – Has Delivered a Decent Correction, as Compared to past Deals
- Kansai Electric Power (9503 JP) plans to raise up to US$3.5bn (including over-allocation) to partly fund its investment plans.
- In our earlier note, we talked about the placement and ran the deal through our ECM framework.
- In this note, we talk about the updates and share price performance since then.
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