In today’s briefing:
- Kingston’s All-Time Lows to Draw an Offer from Mrs Chu?
- MSCI Korea November SAIR: Three Adds & Four Deletes
- Plenus (9945) To Go Private in MBO – Looks Like a Done Deal
- Diageo ADR: Initiation of Coverage – Portfolio Split
- Unilever ADR: Initiation of Coverage – Recent Strategic Shift
Kingston’s All-Time Lows to Draw an Offer from Mrs Chu?
- Kingston Financial (1031 HK) entered a trading halt pending an announcement under the Hong Kong Code on Takeovers and Mergers on 14 October. The shares are at all-time lows.
- It is likely that Pollyanna Chu Yuet Wah (CEO and co-founder), the largest shareholder representing 75.61% of ordinary shares (80.09% of diluted shares), is seeking to privatise Kingston.
- As privatisation through a Bermuda scheme involves the headcount test, a decent premium is required – an offer at the 1-year average price of HK$0.33 implies a 63% premium.
MSCI Korea November SAIR: Three Adds & Four Deletes
- As the recent share price volatility has grown, there have been significant changes in those on the borderline at the MSCI November SAIR.
- Additions: Hyundai Mipo Dockyard (010620), LOTTE Corp (004990), and Ecopro (086520) & Deletions: Meritz Financial Group (138040), Amorepacific Group (002790), SK Chemicals (285130), and Green Cross (006280).
- We must wait on many names until the end, making the price impact more dramatic than usual, as the flow can be concentrated after the announcement.
Plenus (9945) To Go Private in MBO – Looks Like a Done Deal
- Kyushu-Based food services business and restaurant operator Plenus Co Ltd (9945 JP) announced Friday that its main holder had announced a Tender Offer. The Board voted to support the effort.
- The Tender Offer is at ¥2,640/share, a 37.5% premium to last, and which is just higher than the highest closing price since listing.
- This looks like a deal easy to get done. Decent premium, well above book, lifetime high on a low vol stock, not an awful multiple, and founder+cross-holders have 50%.
Diageo ADR: Initiation of Coverage – Portfolio Split
- This is our first report on global alcoholic beverage major, Diageo.
- Volume increased by 10%, while price/mix growth increased by 11 points, with pricing contributing to the balanced growth of the mid-single digits.
- Overall, they are well positioned for the spirits category’s sustained premiumization and market share increases within the overall beverage alcohol market.
Unilever ADR: Initiation of Coverage – Recent Strategic Shift
- This is our first report on global consumer goods giant, Unilever.
- The company had a decent performance in 2021 and its growth continues to build in its first-half performance.
- Unilever also uses its extensive market experience to deal with inflation.
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