In today’s briefing:
- 7&I (3382 JP) – Ito-San MBO Plan Includes 7-Eleven US IPO… Which LeadsTo A Modest Proposal
- Latest Scoop on President Yoon’s Impeachment Motion and How to Play It in the Market
- ESR Group (1821 HK): Consortium’s Scheme Cash/Scrip Privatisation Offer
- Ecopro BM (247540 KS): Index Implications as KOSPI Transfer Nears
- Nissan Tokyo Sales Holdings (8291 JP) – Large Offering on Tiny Cap With Deep Value
- ESR (1821 HK): HK$13.00/Share Offer
- Quiddity Leaderboard NIFTY Mar 25: Inflows for Zomato and Jiofin in Dec 24 and Mar 25
- SG Fleet (SGF AU): Pacific Equity Partners’ Binding Offer a Done Deal
- FOOTSIE UK December 2024 Forecast (Final): ALW and STJ for Top 100; ROO and ONT for Next 250
- EQD | Global Option Implied Volatility – Kospi 200, Hang Seng, Nifty 50
7&I (3382 JP) – Ito-San MBO Plan Includes 7-Eleven US IPO… Which LeadsTo A Modest Proposal
- A Bloomberg article late in the trading session today said the Seven & I Holdings (3382 JP) MBO proposal by Ito family scion Ito Junro includes a US assets IPO.
- The idea? IPO proceeds would help pay down MBO debt to Japanese banks. Seven & i would retain a stake. This is not dissimilar to Berkshire Hathaway buying a stake.
- But more directly, this leads us back to 7&I (3382) – What If… A Modest Proposal. Possible strategic mistake by Ito-san here. ACT should act on this.
Latest Scoop on President Yoon’s Impeachment Motion and How to Play It in the Market
- The key point is Saturday—watch if eight ruling party lawmakers defect. Hahn Dong-hoon may push for an early election, with 15 loyalists backing him, so it’s definitely possible.
- I’d bet on the ruling party leader pivoting, accepting impeachment, and pushing for an early election. Time to scout beneficiaries and set up an aggressive trading play.
- Short-Term, I’m eyeing Kakao affiliates, under-the-radar IT stocks, and those likely to benefit from corporate governance changes. Low birth rate-related sectors are also set for strong upside.
ESR Group (1821 HK): Consortium’s Scheme Cash/Scrip Privatisation Offer
- ESR Group (1821 HK)’s preconditional scheme offer from the consortium is either cash (HK$13.00), scrip or a combination of cash/scrip. The offer is final.
- The precondition relates to several regulatory approvals. The precondition satisfaction does not carry the same risk as the China Traditional Chinese Medicine (570 HK) deal break.
- The irrevocable (31.03% of outstanding shares) ensure that shareholders with blocking or close to blocking stakes are supportive. This is a done deal, with timing the key risk.
Ecopro BM (247540 KS): Index Implications as KOSPI Transfer Nears
- Eight months after shareholders approved the transfer from the KOSDAQ to the KOSPI market, Ecopro BM (247540 KS) has submitted the application for section transfer to the KRX.
- Given historical precedent, the transfer could take place in February. Ecopro BM‘s deletion will mean an inclusion to the KOSDAQ150 Index to maintain the number of index constituents at 150.
- Ecopro BM (247540 KS) will be deleted from the KOSDAQ 150 Index leading to passive selling and some short covering. Then will come the inclusion to the KOSPI 200 Index.
Nissan Tokyo Sales Holdings (8291 JP) – Large Offering on Tiny Cap With Deep Value
- Nissan Tokyo Sales (8291 JP) is a network of 120 dealerships with revenue from sales and repairs of about US$1bn a year. Nissan owns 34%. P&C insurers own 21%.
- The P&C insurers will sell their 21%, to an offering and a ToSTNeT-3 buyback. Expect the net offering to be 10.5%, which is still 60+ days of ADV.
- But it has net cash, securities, more securities, and landholdings. It trades at <0.5x book and a very large part of book is finance-able. This looks like an MBO candidate.
ESR (1821 HK): HK$13.00/Share Offer
- HK$13.00/Share (deemed final). That’s the key takeaway here as the Starwood/Warburg Pincus Consortium (finally) tables a firm offer, by way of a pre-conditional Scheme.
- Pre-Conditions are extensive, with a long stop date of the 4th September 2025.
- HK$13.00 is below prior expectations of a HK$14+ handle. But with irrevocables of 30.79% of the register (and 51.24% of Scheme shares), this is done. A scrip option is afforded.
Quiddity Leaderboard NIFTY Mar 25: Inflows for Zomato and Jiofin in Dec 24 and Mar 25
- NIFTY 50 represents the 50 largest stocks listed in the National Stock Exchange (NSE) of India and the NIFTY Next 50 index tracks the next 50 largest names.
- In this insight, we take a look at the names leading the race to become ADDs/DELs for these indices in the March 2025 index rebal event.
- Zomato (ZOMATO IN) and Jio Financial Services (JIOFIN IN) could see index inflows during the December 2024 rebalance and March 2025 rebalance.
SG Fleet (SGF AU): Pacific Equity Partners’ Binding Offer a Done Deal
- Sg Fleet (SGF AU) has entered a scheme implementation deed with Pacific Equity Partners (PEP) at A$3.50 per share, a 31.1% premium to the undisturbed price.
- The key conditions are shareholder and regulatory approvals (FIRB, OIO and UK FCA). Super Group (SPG SJ), the largest shareholder with a 53.58% stake, will support the offer.
- The offer is attractive compared to peer multiples and represents an all-time high. At the last close and for a March 2025-end payment, the gross/annualised spread is 2.3%/7.6%.
FOOTSIE UK December 2024 Forecast (Final): ALW and STJ for Top 100; ROO and ONT for Next 250
- Deliveroo (ROO LN) and Oxford Nanopore Technologies (ONT LN) are newly eligible securities forecasted to be added to F250 due to the recent change of the FCA listing category framework.
- Ferrexpo Plc (FXPO LN) is the new forecasted addition-migration to F250 following its ~25% price jump over the last two days which made it surpass the entry threshold.
- Applied Nutrition Plc (APN LN) is a newly eligible, forecasted to be added to small-cap following its IPO listing on 24 October 2024.
EQD | Global Option Implied Volatility – Kospi 200, Hang Seng, Nifty 50
- The KOSPI 200 is in a steady bear market with political turmoil further depressing the outlook. Volatility increased in the near term, leading to an inverted term structure.
- The Nifty 50 is approaching its 50-day average from below. Call options profit from low implied volatility and present an attractive opportunity to profit on the upside.
- The Hang Seng continues to stand out as the index with positive correlation between implied volatility and index performance. Interestingly, the relationship is not symmetric between up- and down moves.
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