In today’s briefing:
- TIP Customized Taiwan Select High Dividend Index Rebalance Preview: AUM Jump & HUGE Trade
- Exedy (7278) Huge Offering Resized – Watch the Dynamics Here
- Infocom (4348 JP) – Reports of an Exclusive Negotiation May Give Hints
- JAPAN ACTIVISM: Murakami-Père Ran Up Mitsui Matsushima (1518 JP), Now Murakami-Fille Selling Down
- Block Deal Prospects Arising from SK Group’s Corporate Reshuffle
- Detailed Summary of Today’s Second Trial Ruling in Chey Tae-Won’s Divorce Case Involving SK Inc
- Kansai Paint (4613) – Going Hard with a BIG Buyback and More Capital Moves Beyond
- Shift Up IPO: Valuation Insights
- Zomato Placement Lockup Expiry – US$800m Overhang
- Legal Complications on Put Options on SSG.Com to Result in Ongoing Concerns for Emart and Shinsegae
TIP Customized Taiwan Select High Dividend Index Rebalance Preview: AUM Jump & HUGE Trade
- The TIP Taiwan Select High Dividend ETF (00919 TW) tracks the TIP Customized Taiwan Select High Dividend Index and has an AUM of TWD 209bn (US$6.5bn).
- There could be 14 changes for the ETF in June with an estimated one-way turnover of around 40% and a round-trip trade of around US$5bn.
- The potential adds have outperformed the potential deletes over the last couple of months and there could be more to go heading into announcement and implementation.
Exedy (7278) Huge Offering Resized – Watch the Dynamics Here
- On Monday 27 May, Aisin (7259 JP) announced an offering to sell ALL of its 36+% stake in equity affiliate Exedy Corp (7278 JP) for likely ¥40bn+.
- Exedy announced a big buyback to go with it. It bought back 30% of the total on Weds morning, and that reduced the size of the offer.
- I had expected “short-term games” but we haven’t really had them. Which is a bit weird. This update shows the details and dynamics (they differ).
Infocom (4348 JP) – Reports of an Exclusive Negotiation May Give Hints
- The entire saga here of Teijin Ltd (3401 JP)‘s disposal of its 55.1% stake in Infocom Corp (4348 JP) is being played out in the non-generally-public press.
- There is reportedly a new piece of writing out late Thursday which suggests an approach.
- I wrote about the “meaning” of words in Infocom (4348 JP) – The Meaning of ‘Binding Bids’ and ‘¥250bn’ and now there is more nuance to parse.
JAPAN ACTIVISM: Murakami-Père Ran Up Mitsui Matsushima (1518 JP), Now Murakami-Fille Selling Down
- Colour me perplexed. Murakami Group ran up Mitsui Matsushima (1518 JP)‘s share price in acquiring 29%. The pattern was clear, but one assumes everyone in-group was on the same page.
- The earliest buyer was NOMURA Aya. She bought early, slowly, then aggressively, then onshore buyers bought aggressively at higher prices. But she has now sold 6 days straight.
- The pattern is confusing but it will become clearer in coming days.
Block Deal Prospects Arising from SK Group’s Corporate Reshuffle
- The declining appeal of the separator business prompts SK to seek buyers for SKIET through block deals amid financial pressures. The first deal is anticipated despite recent stock price drops.
- SK Ecoplant looks to sell its 37.6% stake in SK Oceanplant. Negotiations stall over the former major shareholder’s 20% stake, prompting consideration of a block deal.
- SK Bioscience, under SK Discovery, faces possible sale amid SK’s bio company reshuffle. SK Chemicals may bring SK Biopharm under its wing to help SK Inc focus on semiconductors/batteries.
Detailed Summary of Today’s Second Trial Ruling in Chey Tae-Won’s Divorce Case Involving SK Inc
- The first trial in December 2022 ordered Chey to pay 67.5 billion KRW; today’s ruling increased this to 1.38 trillion KRW plus 2 billion KRW, including splitting SK Inc. shares.
- The increased settlement and SK Inc. share split could spark a management rights battle, causing SK Inc.’s stock price to jump as investors and shareholders react.
- It may take a year for the final verdict, making a sustained stock price increase unlikely. Yet, differences between trial rulings could alter Chey’s SK Inc. stake, sustaining market interest.
Kansai Paint (4613) – Going Hard with a BIG Buyback and More Capital Moves Beyond
- 24mos ago, Kansai Paint (4613 JP) announced a new MTMP, a large buyback, and plans to unwind cross-holdings. Big. 15mos ago a large secondary offering kicked off the festivities.
- Key was Toyota sold. Then KP could sell its Toyota shares – two-thirds of its cross-holdings. The offering was one to buy. A buyback followed. KP vs Nippon Paint doubled.
- KP offered a CB recently with the delta hedge done by TN-3. Now there is a HUGE new buyback. Really big. This gets rid of more cross-holders. And there’s more.
Shift Up IPO: Valuation Insights
- Shift Up (462870 KS) is Korea’s leading game development studio. It is seeking to raise up to US$320 million.
- We previously discussed the IPO in Shift Up IPO: The Investment Case.
- We examine the syndicate’s valuation methodology. Our analysis suggests that Shift Up is attractively valued in the IPO price range. We would participate in the IPO.
Zomato Placement Lockup Expiry – US$800m Overhang
- Antfin will come out of its placement linked lockup for its remaining stake in Zomato soon.
- Ant Group had earlier sold some of its stake in Nov 2023 and Mar 2024. It still has over US$800m worth of shares left to sell.
- In this note, we talk about the deal dynamics and run the deal through our ECM framework.
Legal Complications on Put Options on SSG.Com to Result in Ongoing Concerns for Emart and Shinsegae
- Emart and Shinsegae are facing concerns about put options of nearly 1 trillion won on private equity investors’ investment in SSG.com nearly six years ago.
- From AEP and BRV’s point of views, they want to get their money back through put options since an IPO is not likely in the near term.
- The most probable result appears to be that this is likely to be dragged on for some time, which will cause continued concerns on both Emart and Shinsegae.
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