In today’s briefing:
- Toyota Cross-Shareholding – To Say a Whole Lot Is Left Would Be a US$26bn Understatement
- Infocom (4348 JP): Rumoured Tender Offer as Teijin Seeks to Exit
- Logisteed/KKR Bid BIGLY for Alps Logistics (9055). A Gobsmacking Price/Multiple
- Nissin (9066) – Super Big Buyback Race-Walks the Governance Walk – Super Cheap Logistics Biz
- GAPack (468 HK): Mengniu & Bi Weigh Options On Shandong Xinjufeng’s VGO
- Great Eastern (GE SP): OCBC’s S$25.60 Unconditional Offer
- Netmarble Plans to Sell 2.6% Stake in HYBE Through PRS (Price Return Swap).
- Eoflow Announced that US Federal Court Has Decided to Suspend the Effect of 1st Injunction Decision
- Zeekr IPO Trading – Not as Cheap as It Looks but Float Is Tiny
- Hong Kong Buybacks Weekly (May 10th): Meituan, Hang Seng Bank, Swire Pacific
Toyota Cross-Shareholding – To Say a Whole Lot Is Left Would Be a US$26bn Understatement
- With Toyota (7203 JP) having sold some of its stake in Denso, KDDI and Harmonic Drive this year, it has firmly set the ball rolling for unwinding some of its cross-shareholding.
- Toyota has a shareholding in around 60 listed companies, with its combined disposable stake worth over US$26bn.
- In this note, we take a look at its stakes in various companies to see which ones could possibly be candidates for further selldowns.
Infocom (4348 JP): Rumoured Tender Offer as Teijin Seeks to Exit
- Bloomberg reports that Teijin Ltd (3401 JP) wants to sell its 55% stake in Infocom Corp (4348 JP). The rumoured bidders are Sony Corp (6758 JP), Blackstone and KKR.
- Based on precedents, the offer structure will likely be structured such that Teijin provides an irrevocable NOT to accept but vote in favour of share consolidation at the EGM.
- Bloomberg suggests that Infocom could be valued at JPY200 billion. If this refers to market cap, the tender offer is JPY3,472, a 16.5% premium to the last close.
Logisteed/KKR Bid BIGLY for Alps Logistics (9055). A Gobsmacking Price/Multiple
- In late February, a specialty media outlet noted Alps Logistics (9055 JP) was up for sale. I missed that. Yesterday pre-close, a headline crossed the wires. A deal was imminent.
- Nikkei overnight said “¥150bn+ market cap”. I thought KKR might slightly overpay the Hitachi Transport System (9086 JP) multiple paid. That meant +13% today was full-ish. I was wrong.
- KKR is paying ¥5,774 to minorities, and about ¥4,084-ish to the parent, who is reinvesting at ¥5,774. This is a total knock-out price paid. HUGE MINORITY WIN.
Nissin (9066) – Super Big Buyback Race-Walks the Governance Walk – Super Cheap Logistics Biz
- Yesterday after the close, Nissin Corp (9066 JP) announced earnings (down vs last year), guidance (back up partway to last year), and a sale of securities to raise ¥6+bn.
- Nissin also announced an employee share incentive plan (¥900mm) and an adjustment to its MTMP from Apr24 to Mar27. Much lower revenues. Same OP. Higher net. Higher Div Payout ratio.
- They also announced a really big buyback which should be done by the time people read this. It is really big.
GAPack (468 HK): Mengniu & Bi Weigh Options On Shandong Xinjufeng’s VGO
- Back in September 2023, Jardine Matheson Holdings (JM SP) sold its 28.22% stake in Greatview Aseptic Packaging (468 HK) to Shandong Xinjufeng Technology Packaging (301296 CH) (XJF).
- Then in November, XJF requisitioned an EGM to spill the board. At the EGM on the 26th January, not one of XJF’s five new proposed appointments were successful.
- XJF has now made a pre-conditional (various PRC approvals) voluntary general Offer at $2.65/share (best & final), contingent on a 50% acceptance hurdle. Final/special dividends to be added.
Great Eastern (GE SP): OCBC’s S$25.60 Unconditional Offer
- OCBC (OCBC SP) has made a voluntary unconditional general Offer for the 11.56% in Great Eastern Holdings (GE SP) not held.
- The S$25.60 cash Offer for the life/non-life insurer is a 36.9% premium to last close; and a 30% discount to its S$36.59/share embedded value (as at 31st Dec 2023).
- The Offer is unconditional in all respects. This will trade tight. A delisting Offer is next on the cards.
Netmarble Plans to Sell 2.6% Stake in HYBE Through PRS (Price Return Swap).
- After the market close on 9 May, Netmarble announced that it plans to sell 2.6% stake in HYBE for 219.9 billion won.
- The transaction is based on PRS (price return swap) basis. Previous to this deal, Netmarble sold 2.5 million shares (about 6%) of HYBE shares in November 2023.
- We continue to remain negative on HYBE including on this deal involving Netmarble’s plan to sell additional 2.6% stake in HYBE.
Eoflow Announced that US Federal Court Has Decided to Suspend the Effect of 1st Injunction Decision
- On 8 May, Eoflow announced that the U.S. federal court has decided to suspend the effect of the first injunction decision.
- While the effect of the second preliminary injunction decision remains intact, Eoflow has requested a review of the suspension of the effect of the second revised injunction decision as well.
- There has been a renewed optimism on Eoflow (294090 KS)’s share price in the past week which increased by 46% from 7 May to 10 May.
Zeekr IPO Trading – Not as Cheap as It Looks but Float Is Tiny
- ZEEKR (ZK US), a premium EV brand by Geely, raised around US$440m in its US listing, after the deal was upsized and priced at the top.
- Zeekr was formed in Mar 2021 as a JV between Geely and its founder. Its first model was launched in Apr 21 with deliveries starting in Oct 21.
- We have looked at the company’s past performance and provided our thoughts on valuations in our earlier notes. In this note, we talk about the trading dynamics.
Hong Kong Buybacks Weekly (May 10th): Meituan, Hang Seng Bank, Swire Pacific
- We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on May 10th based on HKEx daily reports.
- In the past 7 days, the top 3 companies that repurchased the most shares from the market were Meituan (3690 HK), Hang Seng Bank (11 HK), Swire Pacific (19 HK).
- In the past 30 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), Meituan (3690 HK), Hang Seng Bank (11 HK).
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