Last Week in Event SPACE ...
Plus other events, CCASS movements and upcoming key dates for M&A transactions.
(This insight covers specific insights & comments involving Stubs, Pairs, Arbitrage, share Classification and Events - or SPACE - in the past week)
Nissan Motor (7201 JP) (Mkt Cap: $32bn; Liquidity: $98mn)
Both Mio Kato, CFA and Travis Lundy tackled a report in the FT suggesting that Renault "aims to restart merger talks with Nissan within 12 months" and the long-awaited release of Nissan's Special Committee for Improving Governance (SCIG) report.
Links to:
Mio's insight: Nissan: Atrocious Governance Should Be Rectified Before Even Thinking of a Merger.
Travis' insight: Nissan Governance Structure Report Out: Fog Dissipating Slowly. Sunny in Summer. Storms Next Winter?
Samsung Electronics (005930 KS) (Mkt Cap: $265bn; Liquidity: $464mn)
Sanghyun Park concluded the market had misinterpreted Amazon's server DRAM demand cut in 4Q18. It wasn't a sign of falling demand nor is there any convincing sign of server DRAM demand drop-off. It's more a technical issue and by the time SamE gets the optimization issues right, server DRAM demand of Amazon and Google will return, stabilising DRAM prices.
(link to Sanghyun's insight: Samsung Electronics DRAM Economics: Adj. Valuation Shows Upside Potential at Current Price)
Briefly ...
Aqila Ali discusses Denso Corp (6902 JP) investment in Airbiquity Inc, one of the leading companies in the connected vehicle services sector and one of the companies that has continuously developed automotive telematics technology. This proposal follows its investment in Quadric.io this year. Denso is in full swing in the development of its autonomous driving business and next-generation technologies development, and it wouldn’t be a surprise to see Denso emerge as the first mover in next-generation technologies such as AD and connectivity solutions. (link to Aqila's insight: Denso Continues to Strengthen Its Investment CASE with Acquisitions)
Lynas Corp Ltd (LYC AU) (Mkt Cap: $1bn; Liquidity: $7mn)
Wesfarmers Ltd (WES AU) surprised the market and announced a non-binding proposal to acquire Lynas at A$2.25/share (cash) by way of a scheme. This is a 44.7% premium to the one-day price and a 36.4% premium to the 60-day price. However, it is a 0% premium to the price at which Lynas was trading on 3 December 2018, the day before the Malaysian government imposed two pre-conditions on the rolling over of the processing licence (later in 2019), and it is a 3.2% premium to the one-year average as of 4 December 2018. Lynas rejected the proposal the next day.
(link to Travis' insight: Wesfarmers Puts Out A Bid for Lynas)
Xenith Ip (XIP AU) (Mkt Cap: $115mn; Liquidity: $1mn)
The ACCC said will not oppose a tie in between IPH Ltd (IPH AU) and Xenith. Xenith acknowledged the ACCC decision resolves a major uncertainty, but stops short of supporting IPH's offer as there still exist a number of concerns as detailed in its 19 March announcement.
(link to my insight: Xenith Is Running Out Of Excuses)
China Power New Energy Development Co (735 HK) (Mkt Cap: $581mn; Liquidity: $1mn)
SOE State Power Investment Corporation (SPIC) is seeking to privatise China Power New Energy Development Co (735 HK) by way of a Scheme at $5.45/share, a 41.9% premium to last close and a 78.1% premium to the 30-day average. A scrip alternative (6 New shares for one Scheme shares) into an unlisted vehicle under SPIC is also available, but presumably just for SOE shareholders. China Three Gorges, CPNED's largest shareholder with 27.10%, have given an irrevocable undertaking to vote for the Scheme and to elect the share alternative.
(link to my insight: China Power New Energy To Be Delisted After SOE Injection Abandoned)
Versum Materials (VSM US) (Mkt Cap: $5.4bn; Liquidity: $79mn)
Merck KGaA (MRK GR) has launching an unsolicited, fully financed tender offer on VSM at $48/share cash, a 52% premium to VSM’s stock price on January 25, the day before it agreed to sell itself to Entegris Inc (ENTG US)'s in an all-stock deal.
(link to John DeMasi's: Versum Materials - Merck KGaA Dials Up the Pressure and Launches Unsolicited Tender Offer (Part III))
Scout24 AG (G24 GR) (Mkt Cap: $5.6bn; Liquidity: $20mn)
A combination of Blackstone and Hellman & Friedman LLC launched an non-LBO LBO for Scout24 in mid-January at €43.50/share (€4.7bn), which was about an 8% premium to the then-current market price, which had already been juiced because of speculation starting after the FT article in late December. Scout24’s Board rejected the Offer. The two buyers came back in mid-February with a Takeover Offer priced at €46.00/share. Both Scout24’s Management Board and Supervisory Board agreed to support the offer. The BidCo has now officially launched its Tender Offer.
(link to Travis' insight: Scout24 Tender Offer Launched: Price Still Not Quite Full)
Naspers Ltd (NPN SJ) / Tencent Holdings (700 HK)
Naspers announced the intended listing of its international internet assets on Euronext Amsterdam "no earlier than H2 2019", together with a secondary, inward listing on the Johannesburg Stock Exchange. The Newco spin-off will include Naspers' holdings in listcos Tencent and Mail.Ru (MAIL LI), together with ex-South African internet assets. Naspers will maintain a 75% stake in Newco plus Takealot, Media24, and net cash.
(link to my insight: StubWorld: Naspers Embeds Another Layer Into Tencent)
PCCW Ltd (8 HK) / HKT Ltd (6823 HK)
Using a Sum of the Parts analysis, Curtis Lehnert calculated the current discount to NAV to be 37%, the widest level it has been since at least 2015, and approaching the -2 standard deviation level relative to its 6 month average.
(link to Curtis' insight: TRADE IDEA - PCCW (8 HK) Stub: The Li Legacy Lives On)
Separately - and as expected - the composite document issuance for HKCIM has been delayed until (on or before) the 18 April.
Eclipx (ECX AU) has rallied after a market update confirming it will sell two divisions (Grays and Right2Drive) and use the proceeds to pay down corporate debt.
Ophir Energy (OPHR LN)'s shareholders approved Medco Energi Internasional T (MEDC IJ)'s Offer. Completion of the Offer remains subject to the receipt of clearances from the relevant authorities in Tanzania and not losing all or substantially all of its Bualuang interests in Thailand.
My ongoing series flags large moves (~10%) in CCASS holdings over the past week or so, moves which are often outside normal market transactions. These may be indicative of share pledges. Or potential takeovers. Or simply help understand volume swings.
Often these moves can easily be explained - the placement of new shares, rights issue, movements subsequent to a takeover, amongst others. For those mentioned below, I could not find an obvious reason for the CCASS move.
Name | % chg | Into | Out of |
Skyfame Realty Holdings (59 HK) | 10.29% | SHK | Huarong |
Sheng Yuan Holdings (851 HK) | 46.29% | Yuanyin | Outside CCASS |
Zall Smart Commerce Group (2098 HK) | 20.48% | Citi | UBS |
Alpha Professional Holdings (948 HK) | 13.11% | Sun Int'l | Outside CCASS |
Glory Land Ltd (2329 HK) | 20.25% | China Merchants | Zhongrong |
China Digital Video Holdings (8280 HK) | 28.83% | GF | Deutsche |
Riverine (1417 HK) | 70.12% | China Ind | Outside CCASS |
Country | Target | Deal Type | Event | E/C | |
Aus | GrainCorp | Scheme | April | Binding Offer to be Announced | E |
Aus | MYOB Group | Scheme | 17-Apr | Scheme Meeting | E |
Aus | Healthscope | Scheme | 24-Apr | Despatch of Explanatory Booklet | E |
HK | Harbin Electric | Scheme | 7-May | H Share Class meeting/EGM | C |
HK | Hopewell | Scheme | 17-Apr | Expected latest time for trading of Shares | C |
India | GlaxoSmithKline | Scheme | 9-Apr | Target Shareholder Decision Date | E |
Japan | Showa Shell | Scheme | 1-Apr | Close of offer | E |
NZ | Trade Me Group | Scheme | 3-Apr | Meeting for Shareholder Vote | C |
Singapore | PCI Limited | Scheme | 2-Apr | Scheme Meeting | E |
Thailand | Delta Electronics | Off Mkt | 1-Apr | Closing date of offer | C |
Finland | Amer Sports | Off Mkt | 2-Apr | Payment for shares tendered during Subsequent Offer Period | C |
Switzerland | Panalpina | Off Mkt | 5-Apr | EGM | C |
US | Red Hat, Inc. | Scheme | March/April | Deal lodged for approval with EU Regulators | C |
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