In today’s briefing:
- Thai Beverage (THBEV SP): Cheaper than Peers with an Upcoming Catalyst
- Toei Animation (4816) – Shareholder Selldown To Meet Listing Hurdles – Bigly, Heavy, More to Come
- Renesas (6723 JP) To Acquire Altium (ALU AU) In a A$9.1bn Deal
- Renesas’ Transformative Offer For Altium
- S&P/ASX Index Rebalance Preview: Newmont Still Has Nearly A$1bn to Sell
- Outsourcing (2427) MBO Situation – Checking, and Thinking, and Noodling, and Speculating
- Itoki (7972) Mammoth Buyback Coming Imminently After 35% Jump
- Initial Thoughts on Hyundai Motor India IPO
- Sector ETF Rebalancing with Remarkable Price Impact History: ISC In, Wonik IPS Out
- Japan – Shorts & Positioning on Passive Sells
Thai Beverage (THBEV SP): Cheaper than Peers with an Upcoming Catalyst
- Thai Beverage (THBEV SP) has trended lower over the last couple of years and the stock is trading very close to its lows.
- There has been a contraction in multiples and Thai Beverage (THBEV SP) trades cheaper than a lot of its Asia listed peers.
- A potential index inclusion could bring in significant passive inflows and result in a rerating of the stock.
Toei Animation (4816) – Shareholder Selldown To Meet Listing Hurdles – Bigly, Heavy, More to Come
- In December 2021, when companies were required to file statements with the TSE as to plans to meet continuing listing requirements, Toei Animation (4816 JP) had a Plan.
- That plan? Get from a then-current 15.5% Tradable Shares level to 25.0% by 31 March 2025. That was “OK” though later, the TSE asked companies to speed it up.
- Today, shareholders Sony and Bandai Namco announced an equity offering to sell down up to 4.48mm shares in a domestic+overseas offering. It’s big, heavy, and there is more to come.
Renesas (6723 JP) To Acquire Altium (ALU AU) In a A$9.1bn Deal
- Renesas Electronics (6723 JP) has entered a Scheme Implementation Agreement to acquire Altium Ltd (ALU AU) at A$68.5/share implying an equity value of A$9.1bn and an Enterprise Value of A$8.8bn.
- The offer price is a 33.6% premium to the last close and a larger premium to VWAPs ranging from 30 days to 180 days.
- There will be ad hoc inclusions to the S&P/ASX 100 Index and the S&P/ASX 200 (AS51 INDEX) on Altium Ltd (ALU AU)‘s last trading day (expected second half of 2024).
Renesas’ Transformative Offer For Altium
- Renesas Electronics (6723 JP), a supplier of advanced semiconductors, is offering Altium Ltd (ALU AU) shareholders A$68.50/share, in cash, a lifetime high, by way of a Scheme.
- Back in June 2021, Altium rejected a A$38.50/share NBIO, then a A$40/share verbal Offer, from US engineering software giant Autodesk. This was discussed in Altium Ltd (ALU) Rebuffs Autodesk Offer
- This is compelling Offer for Altium. For Renesas, this transaction is a paradigm shift away from its core semiconductors manufacturing ops.
S&P/ASX Index Rebalance Preview: Newmont Still Has Nearly A$1bn to Sell
- With two days left in the review period, there could be 28 adds/deletes across the S&P/ASX family of indices in March.
- There is nearly A$1bn to sell in Newmont (NEM AU) due to the potential S&P/ASX 20 Index deletion and a large decrease in the number of shares held in Australia.
- There could be 2-41 days of ADV to buy in the index inclusions while the impact on the deletions will range between 0.7-24 days of ADV.
Outsourcing (2427) MBO Situation – Checking, and Thinking, and Noodling, and Speculating
- I got a bunch of questions about my Outsourcing comments yesterday in Outsourcing (2427) – Earnings Delay Causes Consternation.
- This piece is intended to clarify what I know (still limited), put parameters around what it might be, and draw lines in the sand which I might later erase.
- This may be nothing. But it may not be. I will try to answer the questions I received in a kind of Q&A format, and I hope that helps.
Itoki (7972) Mammoth Buyback Coming Imminently After 35% Jump
- Two days ago, Japanese manufacturer of ubiquitous office furniture Itoki Corp (7972 JP) announced salutary earnings/presentation(J) results, new MTMP(E) outlines, new shareholder return policy(J), yutai program(J), div hike(J), and buyback(J).
- It was a big day. The stock went limit up on 14 Feb and is +12% today. +25% in two days.
- No single holder holds that much BUT the parameters tell you how this gets done. It’s interesting, but it is important to read the fine print below!
Initial Thoughts on Hyundai Motor India IPO
- Hyundai Motor India has been taking initial steps for an IPO. We believe this IPO could be completed sometime in 4Q 2024.
- Hyundai Motor India Limited (HMIL) IPO offering size is estimated to be at least US$3 billion, which would be one of the largest in India and the world this year.
- If HMIL is valued at US$25 billion and HMC sells a 15% stake, its remaining 85% stake would be worth US$21 billion, representing 55% of HMC’s market cap.
Sector ETF Rebalancing with Remarkable Price Impact History: ISC In, Wonik IPS Out
- Will there be changes in April’s rebalancing? With two weeks left, two names are likely. Wonik IPS may be replaced by ISC Co Ltd, given a ₩150B market cap difference.
- In the previous rebalancing, constituent changes had a notable price impact. Despite a passive flow impact of +1.0x ADTV, HPSP and EO Technics saw about a 15% 3-day return.
- Wonik IPS is estimated to receive -4.0x ADTV, while ISC is expected to receive +1.0x ADTV. This is also quite similar to the previous rebalancing.
Japan – Shorts & Positioning on Passive Sells
- BayCurrent Consulting, Open House, Sumitomo Chemical, Koei Tecmo Holdings, Kose Corp, Oji Holdings, Daiwa House Reit Investment and Tosoh Corp will have passive selling at the close on 29 February.
- Short interest has increased on all these stocks over the last few weeks and there has been big underperformance versus the Nikkei 225 Index and TOPIX Index.
- Cumulative excess volume has increased on the stocks and there will be short covering in the last week of the month.
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