In today’s briefing:
- Thinking About Topcon (7732) And the New METI-Enabled Bad Cop-Good Cop Routine
- A Proxy Fight for Korea Zinc in January 2025
- Sanrio (8136 JP) Placement: Price Likely Determined Today; What Next?
- CPMC (906 HK): Why This Is Still A Buy
- AMFI Stock Reclassification Preview (Dec 2024): Recent Large IPOs Lead to Big Downward Shift
- Fosun Tourism (1992 HK): Scheme Buyback at HK$7.80 (95% Premium)
- TOPIX Inclusions: Who Is Ready (Dec 2024)
- Shanghai Fosun Pharmaceutical (2196.HK) – Performance Pain Points and Henlius’ Privatization Outlook
- Fosun Tourism (1992 HK): Fosun Int’l’s Indirect Takeover
- Talabat Holding (TALABAT UH): IPO Fast-Entry to Be Delivered with Caution
Thinking About Topcon (7732) And the New METI-Enabled Bad Cop-Good Cop Routine
- A Bloomberg article today said Topcon Corp (7732 JP) is weighing takeover bids received from KKR and EQT. ValueAct has been pressuring the company for 18mos (5+% in May23)
- ValueAct has apparently been pushing the company to divest assets and concentrate on core ops, or go private (and have someone else do it).
- This is further evidence of the METI-enabled “Bad Cop-Good Cop Routine” which could expand M&A and governance activity dramatically.
A Proxy Fight for Korea Zinc in January 2025
- There is likely to be a proxy fight for the control of Korea Zinc (010130 KS) between MBK/Young Poong alliance and Chairman Choi/Bain Capital alliance in January 2025.
- Young Poong Precision announced that it will acquire 39,254 shares of Korea Zinc. Post this purchase, Young Poong Precision will own a 2.11% stake in Korea Zinc (up from 1.92%).
- FSS Governor Lee Bok-Hyun mentioned that the FSS is seriously reviewing a potential accounting issue related to environmental pollution at Young Poong.
Sanrio (8136 JP) Placement: Price Likely Determined Today; What Next?
- The Sanrio (8136 JP) placement is likely to be priced today. With the stock 8.8% lower from undisturbed, expect a small discount to today’s close.
- The stock has traded as expected over the last 9 trading days – a sharp drop followed by a strong upward move and then profit taking.
- We expect there will be strong interest in the placement and oversubscription could lead to upside from here. Shorts have increased and will look to cover into the placement.
CPMC (906 HK): Why This Is Still A Buy
- Back on the 29th August 2024, CPMC Holdings (906 HK) announced ORG Technology Co., Ltd. A (002701 CH) had secured SAMR approval. Mofcom and NDRC approvals subsequently followed.
- The pre-condition long stop date is the 6th January. SAFE is the outstanding pre-condition. Separately, Zhang Wei’s 22.01% irrevocable expired on the 5th December – with no HKEx announcement.
- Quite a lot to pack in with 16 business days to the pre-con long stop. Sounding out people involved with the transaction would be ideal. So that’s what I did.
AMFI Stock Reclassification Preview (Dec 2024): Recent Large IPOs Lead to Big Downward Shift
- We see 7 stocks moving from MidCap to LargeCap, 11 stocks moving from LargeCap to MidCap, 4 stocks from SmallCap to MidCap, and 11 stocks from MidCap to SmallCap.
- From the new listings, 4 stocks are expected to be added to Large Cap, 3 stocks to Mid Cap, and multiple stocks to Small Cap.
- There are multiple stocks among the AMFI changes that will be changes for the NSE Nifty Next 50 Index (NIFTYJR INDEX) and/or Nifty Midcap 150 Index in March.
Fosun Tourism (1992 HK): Scheme Buyback at HK$7.80 (95% Premium)
- Fosun Tourism (1992 HK) disclosed a share buyback of the company through a scheme of arrangement at HK$7.80, a 95.0% premium to the last close price of HK$4.00.
- The key condition is the scheme be approved by at least 75% of disinterested shareholders (rejection by <10% of disinterested shareholders).
- The timing is arguably opportunistic, as the shares are down 31% YTD. Nevertheless, the high takeover premium and a potential scrip option lower the vote risk.
TOPIX Inclusions: Who Is Ready (Dec 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.
- Reently-Listed Tokyo Metro (9023 JP), Rigaku Holdings (268A JP), and Intermestic (262A JP) were added to the TOPIX index at the end of November 2024.
- Our long-term pre-event candidate Japan Eyewear Holdings (5889 JP) has applied for a Section Transfer to the Prime Market which means there could be TOPIX Inclusion in the near future.
Shanghai Fosun Pharmaceutical (2196.HK) – Performance Pain Points and Henlius’ Privatization Outlook
- Fosun Pharma is just “a platform” and its performance mainly relies on the contributions of subsidiaries. However, such investment-driven business model has led to the current performance difficulties.
- Although the motivation/underlying logic for Fosun Pharma to privatize Henlius are solid, we don’t know how this privatization ranks in terms of strategic significance of capital operations within Fosun’s system.
- If, for example, Fosun Pharma finds more important acquisitions/capital expenditures, the priority of Henlius’ privatization could fall. So, we think if it takes too long, there may be more uncertainties.
Fosun Tourism (1992 HK): Fosun Int’l’s Indirect Takeover
- When Fosun Tourism (1992 HK), a leisure-focused integrated tourism group, was suspended pursuant to the Takeovers Code, the obvious Offeror, by way of a Scheme, was Fosun International (656 HK)
- Not quite. We do have a Scheme, but it’s being enacted by way of a buyback. Fosun Int’l still abstains from voting, but will control 100% if the Scheme completes.
- The Cancellation Price is $7.80/share (not declared final), a punchy 95% premium to undisturbed. I previously speculated a 100% premium was not out of the question. Clean deal.
Talabat Holding (TALABAT UH): IPO Fast-Entry to Be Delivered with Caution
- Talabat Holding (TALABAT UH) is expected to be listed on 10 December 2024, on the Dubai Financial Market at a valuation of ~$10.3bn.
- Fast-Entry is forecasted to be announced for the one Global Index at the close of 10 December and traded on 20 December in conjunction with the review.
- Uncertainty regarding the Fast-Entry arises due to lack of shareholder information in the Institutional Offering which can result in the float market cap being determined as invalid.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Analytics and News
- ✓ Events & Webinars
