Daily BriefsEvent-Driven

Daily Brief Event-Driven: Chip Eng Seng: Low-Balled MBO At $0.72/Share and more

In today’s briefing:

  • Chip Eng Seng: Low-Balled MBO At $0.72/Share
  • Trading Considerations on the OCI Demerger
  • OCI Spin-Off: Trade Opportunities Post Relisting, Valuations, & Impact on KOSPI 200
  • Shanghai/​​​​​​​​​​​​​​​​​​​​​​Shenzhen Southbound Connect: Weekly Moves (25 November 2022)
  • Shanghai/​​​​​​​​​​​​​​​​​​​​​​Shenzhen Northbound Connect: Weekly Moves (25 November 2022)

Chip Eng Seng: Low-Balled MBO At $0.72/Share

By David Blennerhassett

  • Conglomerate Chip Eng Seng Corp (CHIP SP) (CES) has announced a voluntary Offer of S$0.72/share from a Tang family-owned entity. The price is a 1.4% premium to last close.
  • The Tang’s hold 38.23% and the Offer is conditional on a 50% acceptance condition. 
  • The Offer price is a 27.3% discount to CES’ NAV as of 30 June 2022 – no such mention in the announcement. The Offer price has not been declared final.

Trading Considerations on the OCI Demerger

By Sanghyun Park

  • Value accretion by unlocking the voting eligibility of treasury shares won’t happen as the company holds no treasury share.
  • But KOSPI 200 passive flows will pose a noteworthy trading point. PASSIVE’s selling outflow will be about 700-800K shares, 1.6x ADTV.
  • Market cap imbalance, primarily driven by the tender offer dynamic and the split ratio that is excessively focused on Holdco, will likely exacerbate Holdco → Opco migration after re-listing.

OCI Spin-Off: Trade Opportunities Post Relisting, Valuations, & Impact on KOSPI 200

By Douglas Kim

  • After the spin-off and relisting of holdco/opco shares, we believe that there is a greater probability of OCI Co (opco) shares outperforming OCI Holdings (holdco).
  • However, the degree of outperformance of OCI Co vs OCI Holdings is not likely to be similar to other recent spin-offs such as F&F Co and F&F Holdings.
  • We have a long-term bullish view of OCI over the next one to two years. It is trading at P/E of 3.1x and P/B of 0.6x based 2022 earnings estimates.

Shanghai/​​​​​​​​​​​​​​​​​​​​​​Shenzhen Southbound Connect: Weekly Moves (25 November 2022)

By David Blennerhassett


Shanghai/​​​​​​​​​​​​​​​​​​​​​​Shenzhen Northbound Connect: Weekly Moves (25 November 2022)

By David Blennerhassett


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