In today’s briefing:
- StubWorld: The Maths For A MUCH Higher Bid For Toyota Inds (6201 JP) Remains Compelling
- PhonePe IPO: Limited Float & Index Inclusion Timeline
- China ETF: Huge Outflows; National Team Unwinding?
- IJM (IJM MK): Sunway Snubs Anti-Graft Probe & Proceeds With Offer
- Permira – JTC: Trust the Process
- Tredegar’s Strategic Review and Potential Sale: Analyzing Upside, Shareholder Pressure, and Segment Valuation Dynamics
StubWorld: The Maths For A MUCH Higher Bid For Toyota Inds (6201 JP) Remains Compelling
- A double dose of StubWorld this week as I recap the latest developments in Toyota Group’s egregiously low-balled Offer for Toyota Industries (6201 JP).
- Preceding my comments on TICO are the current setup/unwind tables for Asia-Pacific Holdcos.
- These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.
PhonePe IPO: Limited Float & Index Inclusion Timeline
- Phonepe is looking to list on the Indian exchanges with pre-IPO investors looking to sell 50.66m shares at a valuation of US$13.1bn and raising around US$1.3bn in the IPO.
- The stock will not get Fast Entry to either of the global indices. The earliest inclusion in a global index should take place in September.
- The stock should be added to the Large Cap segment in the AMFI Classification in July and to the NSE Nifty Next 50 Index in September.
China ETF: Huge Outflows; National Team Unwinding?
- Over US$55bn has been redeemed from mainland China ETFs over the last 3 weeks. Headline ETFs take the largest hit while there have been inflows to sector ETFs.
- The large-scale redemptions across a variety of indices point to the National Team unwinding holdings that have been built up over the last year.
- Margin trading rules have been tightened, and this could be another way of ensuring that markets do not run-up too far in the short-term.
IJM (IJM MK): Sunway Snubs Anti-Graft Probe & Proceeds With Offer
- Back on the 12th January, Sunway (SWB MK) tabled a voluntary RM3.15 cash/scrip Offer for IJM Corp (IJM MK), a so-so 14.55% premium to undisturbed. But scale is key here.
- Around the 20th January, rumours surfaced of a RM2.5bn money laundering probe into IJM. IJM subsequently confirmed it had met with the MACC, Malaysia’s anti-graft body. Shares declined ~11%.
- Sunway has now reiterated it intends to proceed with the Offer. IJM is up ~6%, but still 19% adrift of terms. Perhaps one deal to watch from the spectators’ gallery.
Permira – JTC: Trust the Process
- De-Risked scheme: Shareholder approvals secured and key competition clearances obtained; Permira’s 1,340p all-cash offer remains on track for Q3 2026 completion.
- Spread reopens: Shares at 1,292p imply a 3.7% gross spread and c.5–6% annualised IRR, driven by timing rather than deal risk.
- Event-Driven view: Attractive carry for patient capital; returns sensitive mainly to completion month, not transaction certainty.
Tredegar’s Strategic Review and Potential Sale: Analyzing Upside, Shareholder Pressure, and Segment Valuation Dynamics
- Tredegar’s Aluminum Extrusions segment has higher gross margins (15-16%) than competitors Kaiser Aluminum (11-13%) and Constellium (13%).
- PE Films segment, with 30% EBITDA margins, is highly specialized and cash-flow generative, serving mission-critical applications.
- Tredegar trades at 7.3x EBITDA, with potential value creation from segment separation and eliminating $30m corporate overhead.
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