In today’s briefing:
- Toshiba (6502) – Effissimo’s Pledge Isn’t One. It Is a Signalling Device.
- Tabcorp (TAH AU): Spin-Off Upside & Index Implications
- Nikkei 225 Rebalance Day – Shinsei Dip Chance?
- China Conch (586 HK): Post-Spinoff Blues
- Toyo Construction (1890) Funkier Still
Toshiba (6502) – Effissimo’s Pledge Isn’t One. It Is a Signalling Device.
- Raymond Zage’s letter was super interesting in terms of its nuance, as discussed in Toshiba Board Ructions as Independent Director Goes Rogue.
- In Toshiba Coin Toss Is Neither Heads Nor Tails as Both Proposals Fail, I discussed that this opens the door to exploring combinations of ideas.
- Today Effissimo filed an amended LSR to say they’d sell their shares to a Bain Tender Offer if launched. The statement, and the break clause are informative, and more nuanced.
Tabcorp (TAH AU): Spin-Off Upside & Index Implications
- If approved, Tabcorp Ltd (TAH AU) will spin-off the Lotteries and Keno business (The Lottery Corporation; TLC) from the Wagering & Media and Gaming Services business (new Tabcorp).
- Based on peer valuations, we see an upside of 11% from the last price. The Scheme Meeting is on 12 May and the Second Court Hearing on 20 May.
- TLC should remain in all major indices, while new Tabcorp Ltd (TAH AU) could be deleted from the S&P/ASX 50 Index and the MSCI Australia Index.
Nikkei 225 Rebalance Day – Shinsei Dip Chance?
- The Nikkei 225 Rebalance to boot Shinsei Bank (8303 JP) and add Orix Corp (8591 JP) occurs today at the close.
- The announcement was not a surprise per se, but BOTH have outperformed their Peer Baskets since the announcement, ORIX by a long ways.
- ORIX is a bigger deal, Shinsei is worth buying a dip.
China Conch (586 HK): Post-Spinoff Blues
- In my last note, I thought China Conch Venture Holdings (586 HK) (CCV) appeared fully-priced. If I had been long CCV, I recommended getting out.
- CCV shed HK$11.35/share after going ex- the China Conch Environment Protection Holdings (587 HK) (CCEP) water treatment in-specie spin-off. CCEP closed at HK$9.77/share on its first day of trading.
- CCV is trading back to around levels prior to the announcement of the spin-off. Separately, CCEP appears to be trading rich relative to waste treatment peers.
Toyo Construction (1890) Funkier Still
- Toyo Construction (1890 JP) situation changes day by day. In three days we have three Large Shareholder Report filings as The Expected Activist ducked out, replaced by A New Entrant.
- Now one has to consider what the rest of this week has looked like.
- And we wonder who it is, but reading between the lines can get you to a place where one might see what the aim is.
Before it’s here, it’s on Smartkarma
