In today’s briefing:
- 7&I (3382JP) – Spanners in the Works: FTC Blocks Another US Retail Merger and 7-11 Japan Sales Slump
- 7&I (3382 JP) – Share Price Dipping Deeper Means Dipping Toes Deeper
- NEC Networks (1973 JP) Next To Last Showdown – NEC Lowers Minimum, Bumps Tiny, Ignores Synergies
- Henlius (2696 HK): Interesting Shareholder Movements with the Vote on 22 January
- Pentmaster (1665 HK): Malaysian Parent’s Offer For Pseudo Dual-Listing
- ECM Weekly (22nd Dec 2024) – LG CNS, Kioxia, Vishal Mega, IGI, Sai Life, Ventive, Paras
- Malaysia Airports (MAHB MK): IFA Says NOT Fair, But Reasonable; And To Accept Terms
- Unloved Japan Roundup-Rohm, Taiyo Yuden, Kose
- (Mostly) Asia-Pac M&A: Beenos, Insignia, Henlius, GAPack, Fuji Soft, Goldlion, Malaysia Airports
- Ping An Healthcare and Technology (1833 HK) – Cash Dividend Or Scrip Dividend?
7&I (3382JP) – Spanners in the Works: FTC Blocks Another US Retail Merger and 7-11 Japan Sales Slump
- Recent reports suggest an MBO if firming up, with partial sale of US to ACT and even the Japan CVS business so a big value solution for all concerned.
- Not so fast: an ACT purchase of 7-11 US looks more likely to be blocked given yesterday’s ruling on the merger of grocery giants Kroger and Albertsons.
- The valuation of the Japan business may need a correction too if the last six months of poor numbers continue – given this is because of price perception, they may.
7&I (3382 JP) – Share Price Dipping Deeper Means Dipping Toes Deeper
- Seven & I Holdings (3382 JP) shares are in a lull here. Winter doldrums without news as the Ito consortium gets its ducks in a row and 7&i sells York.
- Alimentation Couche-Tard (ATD CN) is waiting patiently. They have the ability to wait, and to fund, and pay up.
- An article/show is causing a dip today on top of last week’s weakness. This is a dip to buy.
NEC Networks (1973 JP) Next To Last Showdown – NEC Lowers Minimum, Bumps Tiny, Ignores Synergies
- On Friday, NEC Corp (6701 JP) raised the price for its Tender Offer on Nec Networks & System Integr (1973 JP) from ¥3,250 to ¥3,300.
- It also lowered the minimum to 10.153mm shares (6.82%). It had proposed to do so earlier but NESIC demanded a bump, and NEC didn’t want to.
- Now it’s bumped. That’s the “final price.” But it still does not include “a fair allocation of a portion of the value that cannot be realised without an acquisition.”
Henlius (2696 HK): Interesting Shareholder Movements with the Vote on 22 January
- Shanghai Henlius Biotech (2696 HK)’s IFA opines that Shanghai Fosun Pharmaceutical (Group) (2196 HK)’s HK$24.60 offer is fair and reasonable. The vote is on 22 January.
- The key condition is approval by at least 75% of independent H Shareholders (<10% of all independent H Shareholders rejection). There are recent movements in H Share substantial shareholders.
- Key shareholders should be supportive of the cash/scrip offer. At the last close and for a 15 February payment, the gross/annualised spread is 2.9%/16.9%.
Pentmaster (1665 HK): Malaysian Parent’s Offer For Pseudo Dual-Listing
- In Pentamaster Corp: In The (EV) Driver’s Seat in February last year, I discussed Pentamaster Corp (PENT MK)‘s supply of semiconductors testers to the electric vehicle business.
- A quirk of PENT was that its pseudo dual-listed twin – Pentamaster International (1665 HK) – trades at a significant discount.
- In a not altogether surprising move, PENT is now seeking to take PI private by way of a Scheme at HK$1.00/share, including a HK$0.07/share dividend.
ECM Weekly (22nd Dec 2024) – LG CNS, Kioxia, Vishal Mega, IGI, Sai Life, Ventive, Paras
- Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
- On the IPO front, all of the India listings managed to do well, while Kioxia Holdings (285A JP) managed to provide steady returns as well.
- On the placements front, there were only a few deals in India, led by Mankind Pharma.
Malaysia Airports (MAHB MK): IFA Says NOT Fair, But Reasonable; And To Accept Terms
- Back on the 15th May, a consortium (Khazanah Nasional, EPF, the Abu Dhabi Investment Authority, and Global Infrastructure Partners) collectively holding 41.22%, launched an Offer for Malaysia Airports (MAHB MK).
- After some political gymnastics, MAHB squared away the necessary regulatory approvals, and a firm Offer was made on the 15th November. The Offer Doc dispatched on the 6th December.
- In the Circular on Friday, the IFA said NOT fair – with reference to a SOTP; but reasonable referencing historical market pricing and that no competing Offer will emerge.
Unloved Japan Roundup-Rohm, Taiyo Yuden, Kose
- Solar power will be cheaper than fossil fuels and EVs will be cheaper than ICE vehicles, but you can’t make either without the parts that Rohme excels in.
- Tesla is up 201% on speculation about its FSD, but Taiyo Yuden, which makes critical parts in FSD systems is down systems, is down 43%.
- Kose is down 49%, largely on China woes, but China is no longer big enough to be a problem, and Japan and other regions growth should start to take over.
(Mostly) Asia-Pac M&A: Beenos, Insignia, Henlius, GAPack, Fuji Soft, Goldlion, Malaysia Airports
- I tally 51 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
- Two new deals this week: Goldlion Holdings (533 HK)‘s Scheme, and Beenos Inc (3328 JP)‘s Tender Offer.
- Key updates/news took place on: Insignia Financial (IFL AU), Shanghai Henlius Biotech (2696 HK), GAPack (468 HK), Fuji Soft (9749 JP), Macromill (3978 JP) and Malaysia Airports Holdings (MAHB MK).
Ping An Healthcare and Technology (1833 HK) – Cash Dividend Or Scrip Dividend?
- Hopson Development (754 HK) is cash-strapped and it will most likely choose cash dividend, which would increase the likelihood that Glorious Peace’s shareholding ratio will increase to more than 50%.
- If PAGD’s share price is higher than HK$6.12, there is arbitrage opportunity. Since Ping An may hope other shareholders to choose cash dividends, future stock price may fall below HK$6.12
- A risk point is Ping An can actually wait for other shareholders to make their choices before making the final decisions based on the stock price situation at that time.
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