In today’s briefing:
- Dai-Ichi Life (8750) Proposes a Full Takeover of Benefit One (2412), Overbidding M3
- New Benefit One Deal Recalculated, More Benefit for All, Less for One
- S&P500 Index Rebalance: Calling an UBER
- Index Rebalance & ETF Flow Recap: KWEB, CSI300/500, STAR50, SSE50, ChiNext, SET50, Chips, Denso, SPX
- MVIS Australia Equal Weight Index Rebalance Preview: Stocks Close to Deletion Zone
- NIFTY200 Momentum30 Index Rebalance Preview: 58% Turnover & Strong Momentum
- FnGuide Top10 Equal Weight Index Rebalance Preview: Kia Corp Could Replace Posco Future M
- NIFTY200 Momentum30 Index Rebalance: 18 Changes a Side, 58% Turnover, Momentum Intact
- Benefit One (2412 JP): Thoughts on the Potential Minority Offer Price
- Last Week in Event SPACE: Pasona/Benefit One, EOFlow, Swire Pacific, Hankook & Co, Toyo Construction
Dai-Ichi Life (8750) Proposes a Full Takeover of Benefit One (2412), Overbidding M3
- Today post-close, life insurer Dai Ichi Life Insurance (8750 JP) announced plans to launch a Tender Offer to buy out all minorities in Benefit One Inc (2412 JP) at ¥1,800/share.
- M3’s Partial (55%) Tender at ¥1,600/share ending next week is obviously a question.
- This is GREAT news for M&A in Japan. It’s good for holders of Benefit One and Pasona Group (2168 JP) too.
New Benefit One Deal Recalculated, More Benefit for All, Less for One
- The deal from Dai-Ichi Life for Benefit One Inc (2412 JP) appears language I did not get the first time around. The JPY 1800/share price is a proposed combined value.
- The deal would then lower the TOB price to Pasona, and share the benefits from that lower price to Benefit One minorities.
- That suggests more upside to Benefit One than I originally thought, and less upside (but still a chunk) to Pasona.
S&P500 Index Rebalance: Calling an UBER
- Uber Technologies (UBER US), Jabil Circuit (JBL US) and Builders Firstsource (BLDR US) will be added to the S&P 500 INDEX (SPX INDEX) at the close on 15 December.
- There are a bunch of inclusions. deletions and migrations across the S&P 500 INDEX (SPX INDEX), the S&P Midcap 400 Index, and the S&P SmallCap 600 Index.
- We estimate passive trackers will need to buy around US$18bn of Uber Technologies (UBER US). There has been positioning in the stock for just over a month now.
Index Rebalance & ETF Flow Recap: KWEB, CSI300/500, STAR50, SSE50, ChiNext, SET50, Chips, Denso, SPX
- The announcement of the inclusion of Uber Technologies (UBER US) in the S&P 500 INDEX was a big one last week. There were announcements for some other indices too.
- There are many indices in China that will be rebalanced at the close on Friday, the biggest being the CSI 300, CSI 500, STAR50, SSE50 and KWEB US.
- Relatively quiet in ETF world with net inflows to China focused ETFs and net outflows for Japan.
MVIS Australia Equal Weight Index Rebalance Preview: Stocks Close to Deletion Zone
- AMP Ltd (AMP AU) and A2 Milk Co Ltd (A2M AU) could be deleted as the lowest ranked current index constituents.
- There are three other stocks that are close to the deletion threshold and a change in the free float could result in the stocks being deleted.
- With the exception of A2 Milk Co Ltd (A2M AU), shorts have been increasing on nearly all the potential and close deletions.
NIFTY200 Momentum30 Index Rebalance Preview: 58% Turnover & Strong Momentum
- There could be 18 changes for the Nifty200 Momentum 30 Index that will be implemented at the close on 28 December.
- If all changes are on expected lines, one-way turnover is estimated at 58.2% and that will result in a one-way trade of INR 20bn (US$240m).
- Since July, the potential adds to the index have outperformed the index and the potential deletes by a big margin. Momentum could keep the outperformance going till implementation date.
FnGuide Top10 Equal Weight Index Rebalance Preview: Kia Corp Could Replace Posco Future M
- The Samsung KODEX Fn Top10 Equal Weight ETF (395170 KS) tracks the FnGuide Top 10 Index and has an AUM of US$264m.
- We expect Kia Corp (000270 KS) to replace Posco Future M (003670 KS) in the index at the December rebalance.
- There will be 0.4x ADV to buy in Kia Corp (000270 KS) while passives will need to sell 0.1x ADV of Posco Future M (003670 KS).
NIFTY200 Momentum30 Index Rebalance: 18 Changes a Side, 58% Turnover, Momentum Intact
- There are 18 changes for the Nifty200 Momentum 30 Index that will be implemented at the close on 28 December. We had forecast all the index changes.
- Estimated one-way turnover is 57.7% resulting in a one-way trade of INR 21.75bn (US$261m). 8 stocks have over 1x ADV to trade; 21 stocks have atleast 0.5x ADV to trade.
- The adds have continued to outperform the deletes and the index and there could be further outperformance heading into year-end and buying from passive trackers.
Benefit One (2412 JP): Thoughts on the Potential Minority Offer Price
- Dai Ichi Life Insurance (8750 JP)‘s pre-conditional tender offer for Benefit One Inc (2412 JP) has a total value of JPY285,733 million (JPY1,800 per share).
- The offer structure is that Pasona Group (2168 JP) will receive JPY1,800 less TOB tax benefits. Minorities will receive JPY1,800 plus the proportionate share of Pasona’s TOB tax benefits.
- Our estimated minority offer price is JPY2,086 per share, which is 15.9% higher than the JPY1,800 floor price and 9.1% higher than the last close price.
Last Week in Event SPACE: Pasona/Benefit One, EOFlow, Swire Pacific, Hankook & Co, Toyo Construction
- Dai Ichi Life (8750 JP)‘s proposal suggests more upside to Benefit One (2412 JP)‘s minorities than originally thought, and less upside (but still a chunk) to Pasona Group (2168 JP).
- It’s all over for EOFlow (294090 KS), as Medtronic Plc (MDT US) folds it tent.
- Cho Hyun-Sik (eldest son of Cho Yang-Rae, Chairman of Hankook & Company (000240 KS) has joined MBK Partners in making a partial Tender Offer for Hankook & Co.
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