In this briefing:
- S&P 500 and S&P 600 Testing Resistance…Still
- Delta Electronics (DELTA TB): Little Option but to Accept the Tender Offer
1. S&P 500 and S&P 600 Testing Resistance…Still
The S&P 500 is beginning to come off of short-term overbought extremes, consolidating near the confluence of key overhead resistance and the 200-day moving average. This level is roughly 2,817 on the S&P 500 and roughly 1,000 on the S&P 600 Small Cap index. Some consolidation or a mild pullback is possible in the near-term, which we believe would help alleviate current overbought readings and allow for a more orderly and meaningful move higher. In today’s report we highlight attractive Groups and stocks within the Consumer Discretionary, Health Care, and Services Sectors.
2. Delta Electronics (DELTA TB): Little Option but to Accept the Tender Offer
Delta Electronics (2308 TT) (DEI) launched the conditional voluntary tender offer for Delta Electronics Thai (DELTA TB) (Delta), an electronics contract manufacturer, on 26 February 2019. The tender offer of THB71.00 cash per share values Delta at an EV of THB72 billion ($2.2 billion).
Delta and DEI have close links as they were both founded by billionaire Bruce Cheng. Consequently, the tender offer could be viewed as a mechanism for the Chen family to sell their stake to a “friendly” DEI. For minority shareholders, we believe that DEI’s tender offer is reasonable and it makes little sense for minority shareholders to hold on to their shares.
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