Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>
<strong><a href="https://www.smartkarma.com/entities/rightmove-plc" target="_blank" data-smartkarma-citation="entities:22116:1" rel="noopener">Rightmove PLC (RMV LN)</a></strong>, UK's largest real estate portal, has twice rejected <strong><a href="https://www.smartkarma.com/entities/rea-group-ltd" target="_blank" data-smartkarma-citation="entities:699:1" rel="noopener">REA Group Ltd (REA AU)</a></strong> cash/scrip non-binding Offers this month.</li>
<li>REA has upped terms to 341 pence + 0.0422 new REA shares per Rightmove share, or 770p/share, a 39% premium. If completed, Rightmove's shareholders would own ~20.1% of the MergeCo.</li>
<li>Thrice rejected? I think Rightmove should engage. REA also has until the 30th September to make a formal Offer. Or walk away.</li>
</ul>



Rightmove PLC (RMV LN), UK's largest real estate portal, has twice rejected REA Group Ltd (REA AU) cash/scrip non-binding Offers this month.
REA has upped terms to 341 pence + 0.0422 new REA shares per Rightmove share, or 770p/share, a 39% premium. If completed, Rightmove's shareholders would own ~20.1% of the MergeCo.
Thrice rejected? I think Rightmove should engage. REA also has until the 30th September to make a formal Offer. Or walk away.


<ul>
<li>Back on the 17 October, <strong><a href="https://www.smartkarma.com/entities/news-corp" target="_blank" data-smartkarma-citation="entities:26926:1" rel="noopener">News Corp (NWS AU)</a></strong> announced it had begun exploring a potential combination with <strong><a href="https://www.smartkarma.com/entities/fox-corporation" target="_blank" data-smartkarma-citation="entities:36135:1" rel="noopener">Fox Corporation (FOXA US)</a></strong>.</li>
<li>A merger of two parts of Rupert Murdoch’s media empire would combine Fox News and TMZ assets with NWS’ newspaper and online news operations.</li>
<li>Murdoch split his empire in 2013, placing the print business in a newly created NWS, and the TV and entertainment under Fox,</li>
</ul>


Back on the 17 October, News Corp (NWS AU) announced it had begun exploring a potential combination with Fox Corporation (FOXA US).
A merger of two parts of Rupert Murdoch’s media empire would combine Fox News and TMZ assets with NWS’ newspaper and online news operations.
Murdoch split his empire in 2013, placing the print business in a newly created NWS, and the TV and entertainment under Fox,


News Corp (NWS AU)'s Proposed Merger With Fox Corp. Again.

<div>
<p>This week in StubWorld ...</p>
</div>
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<div class="content-highlight">
<p>A change of pace with two infrequently discussed stubs in unwind territory:<br><a href="https://www.smartkarma.com/entities/jafco-co-ltd" target="_blank" data-smartkarma-citation="entities:8848:1" rel="noopener"></a></p>
<p><a href="https://www.smartkarma.com/entities/jafco-co-ltd" target="_blank" data-smartkarma-citation="entities:8848:1" rel="noopener"></a><a href="https://www.smartkarma.com/entities/news-corp-class-b" target="_blank" data-smartkarma-citation="entities:5990:1" rel="noopener">News Corp (NWSA US)</a><a href="https://www.smartkarma.com/entities/jafco-co-ltd" target="_blank" data-smartkarma-citation="entities:8848:1" rel="noopener">  / </a><a href="https://www.smartkarma.com/entities/rea-group-ltd" target="_blank" data-smartkarma-citation="entities:699:1" rel="noopener">REA Group Ltd (REA AU)</a>, and<br><a href="https://www.smartkarma.com/entities/jafco-co-ltd" target="_blank" data-smartkarma-citation="entities:8848:1" rel="noopener">Jafco Co Ltd (8595 JP)</a> / <a href="https://www.smartkarma.com/entities/nomura-research-institute-ltd" target="_blank" data-smartkarma-citation="entities:18129:1" rel="noopener">Nomura Research Institute Ltd (4307 JP)</a>.</p>
<p><em>and ...</em></p>
<p>two lesser-known stubs in set-up territory:<br><br><a href="https://www.smartkarma.com/entities/iljin-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:11265:1" rel="noopener">Iljin Holdings (015860 KS)</a> / <a href="https://www.smartkarma.com/entities/iljin-electric-co-ltd" target="_blank" data-smartkarma-citation="entities:4098:1" rel="noopener">Iljin Electric (103590 KS)</a>, and<br><a href="https://www.smartkarma.com/entities/sakata-inx-corp" target="_blank" data-smartkarma-citation="entities:19446:1" rel="noopener">Sakata Inx Corp (4633 JP)</a>  / <a href="https://www.smartkarma.com/entities/siix-corp" target="_blank" data-smartkarma-citation="entities:13244:1" rel="noopener">Siix Corp (7613 JP)</a>.</p>
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</div>
<div>
<p>Preceding my comments on these holding company relationships<a href="https://www.smartkarma.com/entities/pccw-ltd" target="_blank" data-smartkarma-citation="entities:873:1" rel="noopener"></a> are the weekly setup/unwind tables for Asia-Pacific Holdcos.</p>
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<p>These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.</p>
</div>
<div>
<p>As always, more below the fold.</p>
</div>


This week in StubWorld ...



A change of pace with two infrequently discussed stubs in unwind territory: 
News Corp (NWSA US)  / REA Group Ltd (REA AU), and Jafco Co Ltd (8595 JP) / Nomura Research Institute Ltd (4307 JP).
and ...
two lesser-known stubs in set-up territory:  Iljin Holdings (015860 KS) / Iljin Electric (103590 KS), and Sakata Inx Corp (4633 JP)  / Siix Corp (7613 JP).



Preceding my comments on these holding company relationships are the weekly setup/unwind tables for Asia-Pacific Holdcos.


These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.


As always, more below the fold.


StubWorld: News Corp/REA Group, Jafco/Nomura Research, Iljin Holdings/Iljin Electric, Sakata/SIIX

Global Special Situations & Strategy, SR Services Ltd

David Lepper

Global Special Situations & Strategy

SR Services Ltd

SR Services provides Strategic Knowledge and Solutions services for Family Offices and Corporate Business. 

We deliver this via advisory services, strategic planning, opportunity analysis/sourcing, as well as solution implementation. 

Whilst, we create intellectual discipline and operational leverage for your projects or daily activities, our ultimate objective is to empower whilst enhancing your decision making. 

Strategic Knowledge and Solutions

Quantitative Analysis

<p>* Our Q3-2019 Small-Mid Cap High-Risk list of stocks ( <a href="https://www.smartkarma.com/insights/screening-the-silkroad-small-mid-cap-high-risk-names-to-avoid-q3-2019" target="_blank" data-smartkarma-citation="insights:31999" rel="noopener">Screening the Silkroad: Small-Mid Cap High-Risk Names to Avoid: Q3 2019 ) </a> produced a market cap average price return of 5%. In comparison, the MSCI Asia Pacific Index posted 8.5% over the same period. The stock rank quality of the Q3 2019 list declined 5.1 points or 6.6% for the period. <br>* 16-stocks appear in our Q4 2019 screen, compared to 14, 19 and 26 in Q3, Q2 and Q1 respectively. The average stock rank has decreased marginally to 74.9 points from the 76.9 points in August 2019. The fact that the screen presents with a high stock rank remains a concern. In our view, this reflects the increased level of risk in the market which is being seen in other metrics as well.<br>* Deteriorating credit metrics support our view that the level of risk appears is increasing within the small-mid cap universe. </p>

* Our Q3-2019 Small-Mid Cap High-Risk list of stocks ( Screening the Silkroad: Small-Mid Cap High-Risk Names to Avoid: Q3 2019 )  produced a market cap average price return of 5%. In comparison, the MSCI Asia Pacific Index posted 8.5% over the same period. The stock rank quality of the Q3 2019 list declined 5.1 points or 6.6% for the period.  * 16-stocks appear in our Q4 2019 screen, compared to 14, 19 and 26 in Q3, Q2 and Q1 respectively. The average stock rank has decreased marginally to 74.9 points from the 76.9 points in August 2019. The fact that the screen presents with a high stock rank remains a concern. In our view, this reflects the increased level of risk in the market which is being seen in other metrics as well. * Deteriorating credit metrics support our view that the level of risk appears is increasing within the small-mid cap universe. 

Screening the Silk Road: Small-Mid Cap High Risk Names to Avoid: Q4 2019

<p><strong><a href="https://www.smartkarma.com/entities/708" target="_blank" data-smartkarma-citation="entities:708:1">Nine Entertainment Co Holdings (NEC AU)</a></strong>'s shares sharply declined (-10.32% to A$2.26) shortly after the announced deal on the 26th July, touching an intra-day low of $2.15 yesterday, implying an almost nil premium to <strong><a href="https://www.smartkarma.com/entities/8996" target="_blank" data-smartkarma-citation="entities:8996:1">Fairfax Media (FXJ AU)</a></strong>'s<strong> </strong>then share price, down from 21.9% at the time of the announcement. A recovery in Nine's share price to close today at $2.24 places an implied value for Fairfax of A$0.84, in line with my NAV/share, and a 3% premium to last close. </p>
<p>With ~97% of the merger…</p>

Nine Entertainment Co Holdings (NEC AU)'s shares sharply declined (-10.32% to A$2.26) shortly after the announced deal on the 26th July, touching an intra-day low of $2.15 yesterday, implying an almost nil premium to Fairfax Media (FXJ AU)'s then share price, down from 21.9% at the time of the announcement. A recovery in Nine's share price to close today at $2.24 places an implied value for Fairfax of A$0.84, in line with my NAV/share, and a 3% premium to last close. 
With ~97% of the merger…

Nine's Premium Fades, But Pricing for Fairfax Remains Full

United States

News Corporation is a media and information services company. The Company's business is comprised of news and information, book publishing, digital real estate, and cable network programming services. News serves customers globally.

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News Corp (NWS AU)

REA's Improved Terms For Rightmove

Rightmove should engage here. I'd be taking down borrow in REA. Terms are non-binding. REA has until September 30 to make a formal offer.

David Blennerhassett

News Corp (NWS AU)'s Proposed Merger With Fox Corp. Again.

The merger remains very much in the exploratory stage. NWS is trading rich from a historical point of view Without the benefit of clarity on a...

David Blennerhassett

StubWorld: News Corp/REA Group, Jafco/Nomura Research, Iljin Holdings/Iljin Electric, Sakata/SIIX

Looking at consensus numbers, the majority of forward growth is coming from REA, not the stub ops. From a NAV viewpoint, News Corp is trading rich....

David Blennerhassett

Screening the Silk Road: Small-Mid Cap High Risk Names to Avoid: Q4 2019

* Our Q3-2019 Small-Mid Cap High-Risk list of stocks ( Screening the Silkroad: Small-Mid Cap High-Risk Names to Avoid: Q3 2019 ) produced a market...

David Lepper

Nine's Premium Fades, But Pricing for Fairfax Remains Full

Nine Entertainment Co Holdings (NEC AU)'s shares sharply declined (-10.32% to A$2.26) shortly after the announced deal on the 26th July, touching...

David Blennerhassett

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