In today’s briefing:
- Aeon Tender Offer for Aeon Delight (9787) At ¥5,400/Share
- Aeon (8267) And Aeon Mall (8905) To Be a Guess The Ratio Trade
- Last Week in Event SPACE: Seven & I, Yangzijiang Shipbuilding, Pentamaster Int’l, T’Way Holdings
- March Key Events in Asia-Pac: Tariffs, Rates, Earnings, and Indices in Focus
- (Mostly) Asia M&A, Feb 2025 Wrap: Domain, Proto, Shibaura, Paragon REIT, Mayne Pharma, PointsBet
- Aeon Delight (9787 JP): Aeon’s (8267 JP) JPY5,400 Tender Offer
- (Mostly) Asia-Pac M&A: PointsBet, Tonami, CIC/China Galaxy, SG Fleet, Silk Logistics, Jamco, Makino
Aeon Tender Offer for Aeon Delight (9787) At ¥5,400/Share
- Bowing before bureaucratic, governmental, societal, and perhaps finally shareholder pressure, Aeon Co Ltd (8267 JP) Friday announced it is rolling up two big subsidiaries.
- Aeon Mall will be merged with Aeon in a share exchange and Aeon Delight (9787 JP) will be taken over via slightly long-dated Tender Offer which starts Monday.
- This is probably the wrong price, but it isn’t egregiously wrong I expect. And it would be difficult to block. I expect it gets done easily.
Aeon (8267) And Aeon Mall (8905) To Be a Guess The Ratio Trade
- On 28-Feb-25, the last day of their fiscal year, Aeon Co Ltd (8267 JP) signed a deal to acquire Aeon Delight via Tender Offer and Aeon Mall via scrip exchange.
- For Aeon Mall, that means negotiation on the share exchange ratio over the next 5-6 weeks.
- While I have an opinion on the fair ratio (explained below), I find “Guess The Ratio” trades fraught with bad governance outcomes. The 3-month average is often used.
Last Week in Event SPACE: Seven & I, Yangzijiang Shipbuilding, Pentamaster Int’l, T’Way Holdings
- 7&I (3382 JP)‘s MBO is off. Itochu has apparently not been able to agree with Ito-san on board composition/representation and management control. That the MBO is off isn’t surprising.
- Yangzijiang Shipbuilding (YZJSGD SP) is sucking wind as United States Trade Representative’s (USTR) office proposed a raft of fees and other shipping restrictions on Chinese vessels
- Pentamaster International (1665 HK)‘s Scheme comfortably gets up after a wild week of trading.
March Key Events in Asia-Pac: Tariffs, Rates, Earnings, and Indices in Focus
- Several US tariffs are expected in March, but their implementation remains uncertain and is part of ongoing negotiations.
- Central banks in India, Japan, and the US will announce rate decisions in March, with India possibly cutting rates by 0.25%.
- Major HK stocks are set to announce earnings in March, and index changes will occur in the S&P 500, Nifty 50, S&P/ASX 200, and HSCEI indices.
(Mostly) Asia M&A, Feb 2025 Wrap: Domain, Proto, Shibaura, Paragon REIT, Mayne Pharma, PointsBet
- For the month of February 2025, 14 new transactions (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$5bn.
- The average premium for the new transactions announced (or first discussed) in February was ~55%, with a year-to-date average also of 56%.
- The average premiums for transactions in 2024 (129 transactions), (2023 (117), 2022 (106), 2021 (165), 2020 (158), and 2019 (145 ) were 43%, 39%, 41%, 33%, 31%, and 31% .
Aeon Delight (9787 JP): Aeon’s (8267 JP) JPY5,400 Tender Offer
- Aeon Delight (9787 JP) has recommended a tender offer from Aeon Co Ltd (8267 JP) at JPY5,400 per share, a 15.3% premium to the last close.
- Despite the skinny premium, the offer is reasonable compared to historical trading ranges and peer multiples. The offer represents an all-time high.
- The offer aligns with the midpoint of the special committee IFA’s DCF valuation range and is marginally below the Board’s requested price. The required minority acceptance rate is attainable.
(Mostly) Asia-Pac M&A: PointsBet, Tonami, CIC/China Galaxy, SG Fleet, Silk Logistics, Jamco, Makino
- I tally 56 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma.
- Two new deals discussed this week: Mixi Inc (2121 JP)‘s Offer for PointsBet Holdings (PBH AU), and Tonami Holdings (9070 JP)‘s MBO. CICC (3908 HK)/China Galaxy (6881 HK) merger rumoured.
- Key updates/news took place on: SG Fleet (SGF AU), Silk Logistics (SLH AU), Jamco Corp (7408 JP), and Makino Milling Machine Co (6135 JP).
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