In today’s briefing:
- Tata Motors ADS Delisting – Here We Go Again – Lots of Fun To Be Had!
- MSCI Nov 2022 SAIR: In-Line; Plus a Few Surprises
- Uzabase (3966) Agrees to Carlyle Takeover
- Tata Motors (TTM) To Delist ADSs: Details & Potential Trades
- Nexon Q3 In-Line-Ish, Underperformance Achievement Unlocked, Buyback Language Odd
- OZ Minerals (OZL) – Copper and Comps Have Caught Up
- Perpetual Rejects EQT/BPEA/Regal’s Revised Offer But Seeks Pendal Merger Delay
- Axis Bank (AXSB IN): Last of the SUUTI Selldown Removes Overhang
- Axis Bank Placement – Second Deal for the Month but This Is Very Well Flagged
- Golden Energy (GER SP): Widjaja Family’s Low-Balled Offer
Tata Motors ADS Delisting – Here We Go Again – Lots of Fun To Be Had!
- Yesterday, with earnings, Tata Motors Ltd (TTMT IN) announced that it would delist its ADS, making an application on or around 13 January.
- This sounds relatively benign because since 2004 when the ADS was listed, local funding capacity has increased substantially. It may no longer be needed.
- But it is MUCH more interesting than that. There is lots of fun to be had here.
MSCI Nov 2022 SAIR: In-Line; Plus a Few Surprises
- MSCI announced the changes as part of the November SAIR. For Asia Pacific, there are 48 adds and 55 deletes (including one nationality change).
- The deletion of Wharf Holdings (4 HK) is the biggest surprise. The stock should trade weak given the large flow and days of ADV to sell.
- There are listing changes for BeiGene (BGNE US), Li Auto (LI US), Xpeng (XPEV US) and Hutchison China MediTech Ltd (HCM US) to their Hong Kong listed lines.
Uzabase (3966) Agrees to Carlyle Takeover
- Carlyle has launched a bid for business news and data service owner Uzabase Inc (3966 JP). The bid is far below the price of a couple years ago.
- But the price clears the 2022 high by 1 tick. Some will be OK with this, but some may not be.
- At a 72% premium, optically it appears attractive, but given circumstances, it is not a total knockout, though I don’t know who would come in.
Tata Motors (TTM) To Delist ADSs: Details & Potential Trades
- Post market close yesterday, Tata Motors Ltd (TTMT IN) announced that it intended to delist Tata Motors ADR (TTM US) and terminate its ADS program.
- The easiest option for most ADS holders will be to sell the ADS. That could take the ADS lower and to trade at a discount to the underlying shares.
- Sell Tata Motors ADR (TTM US) outright or sell the ADS/buy Tata Motors Ltd (TTMT IN) for an arb trade.
Nexon Q3 In-Line-Ish, Underperformance Achievement Unlocked, Buyback Language Odd
- Nexon (3659 JP) reported Q3 earnings and full-year forecasts today. Revenue came in at the bottom end of August guidance, despite the higher-than-forecast USD/yen rate.
- The forecast for full-year is below consensus. This may be seen as disappointing. The stock may fall on this.
- But a buyback announcement and relative valuation suggests time to cover the short.
OZ Minerals (OZL) – Copper and Comps Have Caught Up
- In August, BHP Group Ltd (BHP AU) launched a $25/share bid – a price it saw as attractive and what target OZ Minerals Ltd (OZL AU) saw as opportunistic.
- Copper had fallen, and peer stock prices had fallen too. Since then, copper has rebounded and peers have too so what was a 25-30% premium no longer exists.
- This means the price of OZL should “enjoy” different dynamics going forward.
Perpetual Rejects EQT/BPEA/Regal’s Revised Offer But Seeks Pendal Merger Delay
- Perpetual Ltd (PPT AU) has announced – and subsequently rejected – a revised non-binding proposal from EQT/BPEA/ Regal Partners (RPL AU) of A$33/share, up from the initial Offer of $30/share.
- PPT factored in the value, high conditionality, transaction, and execution risks, and determined the proposal was not in the best interests of shareholders.
- Against PPT’s request for a delay, Pendal (PDL AU) will proceed to the first court hearing for this week to convene a Scheme Meeting, which may occur in mid-December.
Axis Bank (AXSB IN): Last of the SUUTI Selldown Removes Overhang
- The Administrator of the Specified Undertaking of the Unit Trust of India (SUUTI) is offering 46.53m shares of Axis Bank Ltd (AXSB IN) at a floor price of INR 830.63/share.
- This will take SUUTI’s stake in Axis Bank Ltd (AXSB IN) to zero and remove an overhang on the stock.
- Coming in close to Bain’s partial stake sale last week, the stock could trade heavy. But Axis Bank Ltd (AXSB IN) still trades cheaper than peers.
Axis Bank Placement – Second Deal for the Month but This Is Very Well Flagged
- The Government of India (GoI) aims to raise around US$500m via selling a 1.4% stake in Axis Bank Ltd (AXSB IN).
- This won’t be the first selldown by GoI as it has been reducing its stake since 2019. We have covered a number of the past deals in the name.
- In this note, we will run the deal through our ECM framework and comment on other deal dynamics.
Golden Energy (GER SP): Widjaja Family’s Low-Balled Offer
- Golden Energy & Resources (GER SP) has proposed in-specie-ing its holding in Golden Energy Mines (GEMS IJ), subsequent to which the Widjaja family will undertake an Exit Offer.
- Ex-GEMS, the family is Offering S$0.16/share. That’s insulting. And the Offer was announced after GEAR’s share price had fallen 26%. The Exit Offer has been declared final.
- GEAR’s jewel is the stake in GEMS, and shareholders are afforded future exposure. However, the stub ops are worth considerably more than S$0.16/share.
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