Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<p>When <a href="https://www.smartkarma.com/entities/showa-denko-k-k" target="_blank" data-smartkarma-citation="entities:1496:1" rel="noopener">Showa Denko K.K. (4004 JP)</a> presented their H1 <a href="https://www.sdk.co.jp/assets/files/english/ir/library/pdf_presentation/results2021-2q.pdf" target="_blank" rel="noopener">results</a> on 10 August 2021, and later held their analyst call, it seemed quite bullish. The company was a year ahead of its internal integration efforts after having purchased Hitachi Chemical (renaming it Showa Denko Materials) in a HUGE debt-financed deal in 2020. The company noted that all businesses were operating well and that residual negative numbers coming from restructuring costs and other weaknesses were simply a matter of time to overcome.</p><p>The company showed an OP forecast which even it admitted was light, and for the year the forecast at ¥85bn remains significantly impacted by the amortisation of goodwill due to the purchase of the Hitachi Chemicals business (¥17.6bn this year). <em>This is to say that OP would be 20% higher if Showa Denko had used US-GAAP or IFRS to account for the purchase of Hitachi Chem.</em></p><p>Net Income forecasts out <em>years</em> from now are impacted by this cost to amortise the purchase goodwill. </p><p>The call was interesting in that it talked about efforts to reduce interest-bearing debt, and also talked about aggressive investment measures. That probably should have been a hint. </p><p>The shares fell hard from the 17th to the 20th as crude oil did too. </p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/227/837/original/Screenshot+2021-09-04+at+5.14.22+PM.png?1630746942" class="editor-image img-responsive" data-smartkarma-image-id="227837"></figure><p></p></section><p>And 13 days after the earnings release the company <a href="https://www.sdk.co.jp/assets/files/english/news/2021/20210823_sdknewsrelease_e.pdf" target="_blank" rel="noopener">announced</a> an equity sale where they would sell 35.1mm shares (including greenshoe) to investors. That is a big number, at roughly a quarter of the pre-existing share count. </p><p>It is even bigger when you consider shareholder structure. </p><p>Pricing is likely on 6 September. </p><p>Below the fold we look at shareholder structure, offer structure, and index demand.</p>

When Showa Denko K.K. (4004 JP) presented their H1 results on 10 August 2021, and later held their analyst call, it seemed quite bullish. The company was a year ahead of its internal integration efforts after having purchased Hitachi Chemical (renaming it Showa Denko Materials) in a HUGE debt-financed deal in 2020. The company noted that all businesses were operating well and that residual negative numbers coming from restructuring costs and other weaknesses were simply a matter of time to overcome.The company showed an OP forecast which even it admitted was light, and for the year the forecast at ¥85bn remains significantly impacted by the amortisation of goodwill due to the purchase of the Hitachi Chemicals business (¥17.6bn this year). This is to say that OP would be 20% higher if Showa Denko had used US-GAAP or IFRS to account for the purchase of Hitachi Chem.Net Income forecasts out years from now are impacted by this cost to amortise the purchase goodwill. The call was interesting in that it talked about efforts to reduce interest-bearing debt, and also talked about aggressive investment measures. That probably should have been a hint. The shares fell hard from the 17th to the 20th as crude oil did too. And 13 days after the earnings release the company announced an equity sale where they would sell 35.1mm shares (including greenshoe) to investors. That is a big number, at roughly a quarter of the pre-existing share count. It is even bigger when you consider shareholder structure. Pricing is likely on 6 September. Below the fold we look at shareholder structure, offer structure, and index demand.

Showa Denko (4004 JP) Offering - Supply, Passive Demand, and Opportunity

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Quantitative Analysis

<div><p>The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.</p></div><div><p>Hong Kong saw shorts rise on <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a>, <a href="https://www.smartkarma.com/entities/beijing-kuaishou-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Kuaishou Technology (1024 HK)</a>, <a href="https://www.smartkarma.com/entities/ping-an-healthcare-and-technology-company-limited" target="_blank" data-smartkarma-citation="entities:27008:1" rel="noopener">Ping An Healthcare and Technology Company Limited (1833 HK)</a> and <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a> while there was short covering on <a href="https://www.smartkarma.com/entities/ping-an-insurance-grp-co-of-china-ltd" target="_blank" data-smartkarma-citation="entities:12880:1" rel="noopener">Ping An Insurance (H) (2318 HK)</a>, <a href="https://www.smartkarma.com/entities/zhongsheng-group-holdings" target="_blank" data-smartkarma-citation="entities:10573:1" rel="noopener">Zhongsheng Group (881 HK)</a>, <a href="https://www.smartkarma.com/entities/aac-technologies-holdings-inc" target="_blank" data-smartkarma-citation="entities:6544:1" rel="noopener">AAC Technologies Holdings (2018 HK)</a> and <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent Holdings (700 HK)</a>. Shorts increased in the Consumer Discretionary, Health Care, Materials and Real Estate sectors, and decreased in the Information Technology, Financials and Consumer Staples sectors.</p></div><div><p>In Japan, stocks that saw the most shorts were <a href="https://www.smartkarma.com/entities/toshiba-corp" target="_blank" data-smartkarma-citation="entities:637:1" rel="noopener">Toshiba Corp (6502 JP)</a>, <a href="https://www.smartkarma.com/entities/asahi-kasei-corp" target="_blank" data-smartkarma-citation="entities:19771:1" rel="noopener">Asahi Kasei (3407 JP)</a>, <a href="https://www.smartkarma.com/entities/olympus-corp" target="_blank" data-smartkarma-citation="entities:356:1" rel="noopener">Olympus Corp (7733 JP)</a> and <a href="https://www.smartkarma.com/entities/monex-group-inc" target="_blank" data-smartkarma-citation="entities:14211:1" rel="noopener">Monex Group Inc (8698 JP)</a> while shorts decreased on <a href="https://www.smartkarma.com/entities/orix-corp" target="_blank" data-smartkarma-citation="entities:9936:1" rel="noopener">Orix Corp (8591 JP)</a>, <a href="https://www.smartkarma.com/entities/nippon-telegraph-telephone-corporation" target="_blank" data-smartkarma-citation="entities:623:1" rel="noopener">NTT (Nippon Telegraph &amp; Telephone) (9432 JP)</a>, <a href="https://www.smartkarma.com/entities/shimano-inc" target="_blank" data-smartkarma-citation="entities:3777:1" rel="noopener">Shimano Inc (7309 JP)</a> and <a href="https://www.smartkarma.com/entities/japan-tobacco-inc" target="_blank" data-smartkarma-citation="entities:13498:1" rel="noopener">Japan Tobacco (2914 JP)</a>. Shorts increased in the Industrials, Materials and Health Care sectors, and decreased in the Communication Services, Financials and Consumer Staples sectors.</p></div><div><p>In Korea, shorts increased on <a href="https://www.smartkarma.com/entities/samsung-electronics-co-ltd" target="_blank" data-smartkarma-citation="entities:191:1" rel="noopener">Samsung Electronics (005930 KS)</a>, <a href="https://www.smartkarma.com/entities/celltrion-inc" target="_blank" data-smartkarma-citation="entities:991:1" rel="noopener">Celltrion Inc (068270 KS)</a>, <a href="https://www.smartkarma.com/entities/hyundai-motor-co" target="_blank" data-smartkarma-citation="entities:155:1" rel="noopener">Hyundai Motor Co (005380 KS)</a> and <a href="https://www.smartkarma.com/entities/sk-hynix-inc" target="_blank" data-smartkarma-citation="entities:16955:1" rel="noopener">SK Hynix (000660 KS)</a> during the week. This was the first week where short increased substantially in Korea and comes a week ahead of the end of the short sell ban.</p></div><div><p>Stocks in Taiwan that saw the highest increase in shorts were <a href="https://www.smartkarma.com/entities/china-steel-corp" target="_blank" data-smartkarma-citation="entities:962:1" rel="noopener">China Steel (2002 TT)</a>, <a href="https://www.smartkarma.com/entities/china-airlines-ltd" target="_blank" data-smartkarma-citation="entities:4591:1" rel="noopener">China Airlines (2610 TT)</a>, <a href="https://www.smartkarma.com/entities/united-microelectronics-corp" target="_blank" data-smartkarma-citation="entities:6450:1" rel="noopener">United Microelectronics Corp (2303 TT)</a> and <a href="https://www.smartkarma.com/entities/taiwan-cement" target="_blank" data-smartkarma-citation="entities:19736:1" rel="noopener">Taiwan Cement (1101 TT)</a> while shorts were covered on <a href="https://www.smartkarma.com/entities/innolux-corp" target="_blank" data-smartkarma-citation="entities:4509:1" rel="noopener">Innolux Corp (3481 TT)</a>, <a href="https://www.smartkarma.com/entities/genius-electronic-optical-co-ltd" target="_blank" data-smartkarma-citation="entities:9632:1" rel="noopener">Genius Electronic Optical (3406 TT)</a>, <a href="https://www.smartkarma.com/entities/delta-electronics-inc" target="_blank" data-smartkarma-citation="entities:12688:1" rel="noopener">Delta Electronics (2308 TT)</a> and <a href="https://www.smartkarma.com/entities/pegatron-corp" target="_blank" data-smartkarma-citation="entities:12852:1" rel="noopener">Pegatron Corp (4938 TT)</a>.</p></div>

The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.Hong Kong saw shorts rise on Meituan (3690 HK), Kuaishou Technology (1024 HK), Ping An Healthcare and Technology Company Limited (1833 HK) and Alibaba Group (9988 HK) while there was short covering on Ping An Insurance (H) (2318 HK), Zhongsheng Group (881 HK), AAC Technologies Holdings (2018 HK) and Tencent Holdings (700 HK). Shorts increased in the Consumer Discretionary, Health Care, Materials and Real Estate sectors, and decreased in the Information Technology, Financials and Consumer Staples sectors.In Japan, stocks that saw the most shorts were Toshiba Corp (6502 JP), Asahi Kasei (3407 JP), Olympus Corp (7733 JP) and Monex Group Inc (8698 JP) while shorts decreased on Orix Corp (8591 JP), NTT (Nippon Telegraph &amp; Telephone) (9432 JP), Shimano Inc (7309 JP) and Japan Tobacco (2914 JP). Shorts increased in the Industrials, Materials and Health Care sectors, and decreased in the Communication Services, Financials and Consumer Staples sectors.In Korea, shorts increased on Samsung Electronics (005930 KS), Celltrion Inc (068270 KS), Hyundai Motor Co (005380 KS) and SK Hynix (000660 KS) during the week. This was the first week where short increased substantially in Korea and comes a week ahead of the end of the short sell ban.Stocks in Taiwan that saw the highest increase in shorts were China Steel (2002 TT), China Airlines (2610 TT), United Microelectronics Corp (2303 TT) and Taiwan Cement (1101 TT) while shorts were covered on Innolux Corp (3481 TT), Genius Electronic Optical (3406 TT), Delta Electronics (2308 TT) and Pegatron Corp (4938 TT).

Asia Shorts: Meituan, Kuaishou, Zhongsheng, Toshiba, Monex, Orix, Samsung, HMC, China Steel, Innolux

'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

'Quantamental' Japan Specialist

ja research

ja research is an independent research platform focused exclusively on Japanese equities. Leveraging data and graphic analysis provided by Japan Analytics, we provide insights on small and medium-sized companies that have been ignored by the sell-side as well as challenging conventional wisdom on larger companies. We also offer analyst and corporate access, the latter with translation if required. 

Thematic (Sector/Industry)

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/116/923/original/2020-02-08_18-15-45.png?1581196263" class="editor-image img-responsive" data-smartkarma-image-id="116923"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/116/924/original/2020-02-09_06-34-51.png?1581197706" class="editor-image img-responsive" data-smartkarma-image-id="116924"></figure><div class="content-caption">Source • Japan Analytics</div><div class="content-caption"></div><p><strong>OOOPS!</strong> - The 480 quarterly results announced on Friday subtracted a further 20 basis points from our Results Score. If the remaining 38% of companies continue this trend, the current quarter will equal CQ2019-1 and CQ2018-2 in seeing a 200 basis point Results Score decline. 169 forecasts or revision announcements added  5bps to the Forecast/Revision Score, supported by slight upward revisions from <a href="https://www.smartkarma.com/entities/softbank-corp" target="_blank" data-smartkarma-citation="entities:27445:1" rel="noopener">Softbank Corp (9434 JP)</a> and <a href="https://www.smartkarma.com/entities/honda-motor-co-ltd" target="_blank" data-smartkarma-citation="entities:154:1" rel="noopener">Honda Motor (7267 JP)</a>.  The Results Score has dipped below the Forecast/Revision Score for the first time since July 2016 and is a necessary precursor of the bottoming of the cycle. Japan is now in a recession and could see a decline in GDP for the calendar year. The market's current optimism (aided by the Bank of Japan's buy-the-dips support programme) is more appropriate to the middle of the cycle and, with two further poor earnings quarters ahead, suggests limited further upside. </p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/116/925/original/2020-02-08_10-48-19.png?1581199859" class="editor-image img-responsive" data-smartkarma-image-id="116925"></figure><div class="content-caption">Source • Japan Analytics</div><p><strong>18x EARNINGS</strong> - Trailing-twelve-month (TTM) Operating Income for the composite of listed companies has declined to ¥57.4t, 10% below the peak of early 2019. TTM Net Income has declined by 20% over the same period, resulting in a 6.1 point increase in the market price-earnings ratio to 17.6 times.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/116/927/original/2020-02-08_10-55-21.png?1581200256" class="editor-image img-responsive" data-smartkarma-image-id="116927"></figure><div class="content-caption">Source • Japan Analytics</div><p style="text-align: left;"><strong>TTM RESULTS</strong> - TTM Operating Profits have been declining quarter-on-quarter for five straight quarters, and are 8.1% lower year-on-year. The Operating Margin has declined from 7.45% to 6.80%. TTM Revenues are now also falling and have only increased by 0.7% year-on-year.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/116/928/original/2020-02-08_10-59-00.png?1581200533" class="editor-image img-responsive" data-smartkarma-image-id="116928"></figure><div class="content-caption">Source • Japan Analytics</div><p><strong>FORECASTS</strong> - The year-on-year Operating Profit decline using current forecasts is 8.5%, while Revenues are flat. Revenue forecasts have been falling quarter-on-quarter for three quarters in a row. The 'uplift' from TTM to Forecast is just ¥3t for sales and ¥0.3t for OP. </p>

Source • Japan AnalyticsOOOPS! - The 480 quarterly results announced on Friday subtracted a further 20 basis points from our Results Score. If the remaining 38% of companies continue this trend, the current quarter will equal CQ2019-1 and CQ2018-2 in seeing a 200 basis point Results Score decline. 169 forecasts or revision announcements added  5bps to the Forecast/Revision Score, supported by slight upward revisions from Softbank Corp (9434 JP) and Honda Motor (7267 JP).  The Results Score has dipped below the Forecast/Revision Score for the first time since July 2016 and is a necessary precursor of the bottoming of the cycle. Japan is now in a recession and could see a decline in GDP for the calendar year. The market's current optimism (aided by the Bank of Japan's buy-the-dips support programme) is more appropriate to the middle of the cycle and, with two further poor earnings quarters ahead, suggests limited further upside. Source • Japan Analytics18x EARNINGS - Trailing-twelve-month (TTM) Operating Income for the composite of listed companies has declined to ¥57.4t, 10% below the peak of early 2019. TTM Net Income has declined by 20% over the same period, resulting in a 6.1 point increase in the market price-earnings ratio to 17.6 times.Source • Japan AnalyticsTTM RESULTS - TTM Operating Profits have been declining quarter-on-quarter for five straight quarters, and are 8.1% lower year-on-year. The Operating Margin has declined from 7.45% to 6.80%. TTM Revenues are now also falling and have only increased by 0.7% year-on-year.Source • Japan AnalyticsFORECASTS - The year-on-year Operating Profit decline using current forecasts is 8.5%, while Revenues are flat. Revenue forecasts have been falling quarter-on-quarter for three quarters in a row. The 'uplift' from TTM to Forecast is just ¥3t for sales and ¥0.3t for OP. 

🇯🇵 JAPAN • Results & Revisions Daily Roundup - 7th February ▲2121 7267 5713 ▼ 5401 9616 3407

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

<p>Veloxis Pharmaceuticals A/S, founded in 2002 as a spin-off from H. Lundbeck A/S, is a specialty pharmaceutical company focusing on improving the lives of transplant patients. The company’s mainstay drug is called Envarsus XR and it is already in the commercialisation stage.</p>
<p>On 25<sup>th</sup> November 2019, <a target="_blank">Asahi Kasei </a>a diversified chemical company in Japan, announced a tender offer to acquire 100% of the ordinary shares and warrants of Veloxis Pharmaceuticals. Asahi Kasei is offering to buy the public shareholding at DKK6.00 per share (paid in cash). </p>
<p>The offer price for the two main shareholders (<a target="_blank">Lundbeckfond Invest A/S, Novo Holdings A/S</a>), the board of directors and management who collectively own 81.2% of the ordinary shares and warrants of Veloxis Pharmaceuticals is at a 26% discount (DKK4.45 per share paid in cash) to the public offer price. The above-mentioned shareholders, the board of directors and management are in support of the offer and the board of directors have unanimously recommended the minority shareholders to accept it.</p>
<p><strong>The Offer Highlights</strong></p>
<ul>
<li>
<blockquote>The price of the Offer is DKK 6.00 in cash for each share in Veloxis (the ''Share Offer Price'') except for shares and warrants owned by the two majority shareholders and a group of directors who have accepted to tender their shares at DKK 4.45 in cash for each share in Veloxis (the ''Major Shareholders’ and Group of Directors’ Share Offer Price'')</blockquote>
</li>
<li>
<blockquote>Warrantholders will be offered a price corresponding to the Share Offer Price or the Major Shareholders’ and Group of Directors’ Share Offer Price, as applicable, with the deduction of the pre-fixed exercise price for each of the warrants</blockquote>
</li>
<li>
<blockquote>The two majority shareholders of Veloxis, Novo Holdings A/S and Lundbeckfond Invest A/S have together with the CEO of Veloxis, Mr. Craig Collard, the CFO of Veloxis, Ms. Ira Duarte, as well as the rest of the group's management team and the members of Veloxis' board of directors, irrevocably undertaken to accept the Offer at the Major Shareholders' and Group of Directors’ Share Offer Price, subject to certain customary conditions. Also, the Veloxis group's management team and the members of Veloxis' board of directors have irrevocably undertaken to accept the Offer in respect of their warrants in Veloxis, subject to customary conditions. The irrevocable undertakings represent jointly approximately 81.2 percent of the voting rights and share capital in Veloxis.</blockquote>
</li>
<li>
<blockquote>The Share Offer Price of DKK 6.00 for all shares held by shareholders other than the major shareholders and the members of the board of directors and the management of Veloxis represents:</blockquote>
</li>
<li>
<blockquote>a premium of 6% compared to the 30-trading day volume weighted average share price of DKK 5.68 for the period of October 14, 2019 to November 22, 2019</blockquote>
</li>
<li>
<blockquote>a premium of 14% compared to the 60-trading day volume weighted average share price of DKK 5.25 for the period of September 02, 2019 to November 22, 2019</blockquote>
</li>
<li>
<blockquote>a premium of 36% compared to the six-month volume weighted average share price of DKK 4.41 for the period of May 23, 2019 to November 22, 2019</blockquote>
</li>
<li>
<blockquote>a premium of 75% compared to the one-year volume weighted average share price of DKK 3.43 for the period of November 23, 2018 to November 22, 2019</blockquote>
</li>
<li>
<blockquote>The board of directors of Veloxis has unanimously decided that it will recommend that the shareholders of Veloxis accept the Offer</blockquote>
</li>
<li>
<blockquote>The Offer will be made subject to a number of customary conditions, as well as a requirement that the total number of tendered shares and warrants in the Offer will amount to more than eighty percent (80.0%) of the voting rights and share capital of Veloxis after conversion of the warrants to Veloxis shares, and that necessary approvals by relevant regulatory authorities are obtained.</blockquote>
</li>
<li>
<blockquote>The Offeror will, as soon as possible and no later than 4 weeks from today, publish an offer document with detailed information about the Offer</blockquote>
</li>
<li>
<blockquote>The offer period under the Offer is expected to be approximately four weeks, subject to any extension of the offer period by the Offeror in accordance with the terms and conditions of the Offer</blockquote>
</li>
<li>
<blockquote>The consideration will be paid in cash out of funds which the Offeror already holds or otherwise have available, ready for settlement</blockquote>
</li>
</ul>
<p><em>Source: Company Disclosure </em></p>

Veloxis Pharmaceuticals A/S, founded in 2002 as a spin-off from H. Lundbeck A/S, is a specialty pharmaceutical company focusing on improving the lives of transplant patients. The company’s mainstay drug is called Envarsus XR and it is already in the commercialisation stage.
On 25th November 2019, Asahi Kasei a diversified chemical company in Japan, announced a tender offer to acquire 100% of the ordinary shares and warrants of Veloxis Pharmaceuticals. Asahi Kasei is offering to buy the public shareholding at DKK6.00 per share (paid in cash). 
The offer price for the two main shareholders (Lundbeckfond Invest A/S, Novo Holdings A/S), the board of directors and management who collectively own 81.2% of the ordinary shares and warrants of Veloxis Pharmaceuticals is at a 26% discount (DKK4.45 per share paid in cash) to the public offer price. The above-mentioned shareholders, the board of directors and management are in support of the offer and the board of directors have unanimously recommended the minority shareholders to accept it.
The Offer Highlights


The price of the Offer is DKK 6.00 in cash for each share in Veloxis (the ''Share Offer Price'') except for shares and warrants owned by the two majority shareholders and a group of directors who have accepted to tender their shares at DKK 4.45 in cash for each share in Veloxis (the ''Major Shareholders’ and Group of Directors’ Share Offer Price'')


Warrantholders will be offered a price corresponding to the Share Offer Price or the Major Shareholders’ and Group of Directors’ Share Offer Price, as applicable, with the deduction of the pre-fixed exercise price for each of the warrants


The two majority shareholders of Veloxis, Novo Holdings A/S and Lundbeckfond Invest A/S have together with the CEO of Veloxis, Mr. Craig Collard, the CFO of Veloxis, Ms. Ira Duarte, as well as the rest of the group's management team and the members of Veloxis' board of directors, irrevocably undertaken to accept the Offer at the Major Shareholders' and Group of Directors’ Share Offer Price, subject to certain customary conditions. Also, the Veloxis group's management team and the members of Veloxis' board of directors have irrevocably undertaken to accept the Offer in respect of their warrants in Veloxis, subject to customary conditions. The irrevocable undertakings represent jointly approximately 81.2 percent of the voting rights and share capital in Veloxis.


The Share Offer Price of DKK 6.00 for all shares held by shareholders other than the major shareholders and the members of the board of directors and the management of Veloxis represents:


a premium of 6% compared to the 30-trading day volume weighted average share price of DKK 5.68 for the period of October 14, 2019 to November 22, 2019


a premium of 14% compared to the 60-trading day volume weighted average share price of DKK 5.25 for the period of September 02, 2019 to November 22, 2019


a premium of 36% compared to the six-month volume weighted average share price of DKK 4.41 for the period of May 23, 2019 to November 22, 2019


a premium of 75% compared to the one-year volume weighted average share price of DKK 3.43 for the period of November 23, 2018 to November 22, 2019


The board of directors of Veloxis has unanimously decided that it will recommend that the shareholders of Veloxis accept the Offer


The Offer will be made subject to a number of customary conditions, as well as a requirement that the total number of tendered shares and warrants in the Offer will amount to more than eighty percent (80.0%) of the voting rights and share capital of Veloxis after conversion of the warrants to Veloxis shares, and that necessary approvals by relevant regulatory authorities are obtained.


The Offeror will, as soon as possible and no later than 4 weeks from today, publish an offer document with detailed information about the Offer


The offer period under the Offer is expected to be approximately four weeks, subject to any extension of the offer period by the Offeror in accordance with the terms and conditions of the Offer


The consideration will be paid in cash out of funds which the Offeror already holds or otherwise have available, ready for settlement


Source: Company Disclosure 

Asahi Kasei’s Voluntary Conditional Tender Offer for Veloxis Pharmaceuticals: Unfairly Priced

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

MSCI Emerging Markets Index / Technical Analysis

<p style="text-align: justify;">We continue to believe the weight of the evidence points to a new leg higher for global equities, a viewpoint that is supported by the several international markets that are breaking out to new highs or making bullish inflections since our previous <em>Int’l Compass </em>(10/31/19). While developments continue to lean bullish, global equities have rallied substantially since the start of October, making it perfectly reasonable to expect some consolidation of recent gains which would allow for a more meaningful move higher.</p>

We continue to believe the weight of the evidence points to a new leg higher for global equities, a viewpoint that is supported by the several international markets that are breaking out to new highs or making bullish inflections since our previous Int’l Compass (10/31/19). While developments continue to lean bullish, global equities have rallied substantially since the start of October, making it perfectly reasonable to expect some consolidation of recent gains which would allow for a more meaningful move higher.

Global Equity Strategy: The Pause that Refreshes?

Japan

ASAHI KASEI CORPORATION produces synthetic fibers, industrial chemicals, petrochemicals, plastics (resins), and synthetic rubber.  The Company also operates and sells real estates, pharmaceuticals, medical equipments, electronics, construction materials, and consumer products.

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Asahi Kasei (3407 JP)

Showa Denko (4004 JP) Offering - Supply, Passive Demand, and Opportunity

Showa Denko's offering is not ginormous, but it is BIG. And it will engender a fair bit of passive flow. The question is whether investors will buy...

Travis Lundy

Asia Shorts: Meituan, Kuaishou, Zhongsheng, Toshiba, Monex, Orix, Samsung, HMC, China Steel, Innolux

The Insight looks at large short interest movements across HK, Japan, Korea and Taiwan stocks and highlights large increases/decreases in shorts to...

Brian Freitas

🇯🇵 JAPAN • Results & Revisions Daily Roundup - 7th February ▲2121 7267 5713 ▼ 5401 9616 3407

OOOPS! - The 480 quarterly results announced on Friday subtracted a further 20 basis points from our Results Score. If the remaining 38% of...

Campbell Gunn

Asahi Kasei’s Voluntary Conditional Tender Offer for Veloxis Pharmaceuticals: Unfairly Priced

Veloxis Pharmaceuticals A/S, founded in 2002 as a spin-off from H. Lundbeck A/S, is a specialty pharmaceutical company focusing on improving the...

Oshadhi Kumarasiri

Global Equity Strategy: The Pause that Refreshes?

We continue to believe the weight of the evidence points to a new leg higher for global equities, a viewpoint that is supported by the several...

Vermilion Research

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