In today’s briefing:
- Dai-Ichi Life (8750) Proposes a Full Takeover of Benefit One (2412), Overbidding M3
- New Deal for Benefit One (2168) Could Mean Lots More Money for Pasona (2168)
- Benefit One (2412 JP): Dai-Ichi Life Counters M3 with a Privatisation Offer
- KOSPI 200 Futures Calendar Spread Trading: Latest on Year-End Dividend Record Date Changes
- Hankyu Hanshin Takeout of OS Corp
- Oh, The Irony! Perpetual Rejects Soul Patts’ “Fair” Offer
- Quiddity HSCEI Mar 24 Rebalance: Same Rankings; Same Questions
- Quiddity HSTECH Mar 24 Leaderboard: Third Time’s A Charm?
- NIFTY200 Momentum30 Index Rebalance: 18 Changes a Side, 58% Turnover, Momentum Intact
- Focus on Leverage Reduction
Dai-Ichi Life (8750) Proposes a Full Takeover of Benefit One (2412), Overbidding M3
- Today post-close, life insurer Dai Ichi Life Insurance (8750 JP) announced plans to launch a Tender Offer to buy out all minorities in Benefit One Inc (2412 JP) at ¥1,800/share.
- M3’s Partial (55%) Tender at ¥1,600/share ending next week is obviously a question.
- This is GREAT news for M&A in Japan. It’s good for holders of Benefit One and Pasona Group (2168 JP) too.
New Deal for Benefit One (2168) Could Mean Lots More Money for Pasona (2168)
- Today, Dai Ichi Life Insurance (8750 JP) announced a proposed counter/over-bid for Benefit One Inc (2412 JP). ¥1800/share for minorities and a better (undefined) outcome for Pasona Group (2168 JP).
- This throws the cat amongst the pigeons as it is unsolicited, for 100% not just to get Pasona’s stake, and it will require Benefit One recommend or not.
- For Pasona, this deal structure would likely increase the net result from the stake sale, possibly substantially so. It’s in the details.
Benefit One (2412 JP): Dai-Ichi Life Counters M3 with a Privatisation Offer
- Dai Ichi Life Insurance (8750 JP)‘s pre-conditional tender offer for Benefit One Inc (2412 JP) is JPY1,800 (floor price) + share of Pasona Group (2168 JP)’s TOB tax benefits.
- The pre-conditions relate to the Board recommendation, Pasona support, and M3 Inc (2413 JP) offer not completing its partial offer. The tender offer starts in mid-January 2024 (20 business days).
- While the Dai-ichi Life offer is light, M3’s engagement in a bidding war is low. The proposed minimum acceptance condition (15.51% ownership ratio) requires a 32% minority acceptance rate.
KOSPI 200 Futures Calendar Spread Trading: Latest on Year-End Dividend Record Date Changes
- It would be prudent to anticipate that a considerable portion of these 636 companies will indeed adjust their dividend record dates, effective from this year’s year-end dividends.
- One notable setup gaining attention is calendar spread trading for the KOSPI 200 futures in anticipation of an upward trend in the KOSPI 200 futures market towards the year’s end.
- This entails buying the near-month and selling the far-month, liquidating when the price difference reverts. Traders pay attention to potential far-month divergence due to the shift in dividend record dates.
Hankyu Hanshin Takeout of OS Corp
- The flip-side of the Toho Takeout of Rakutenchi – Buying a Real Estate Portfolio at a 50% Premium but 0.7x NAV. is the Hankyu-Hanshin deal to buy OS Corp (9637).
- Tokyo-Based Toho buys out Kansai-based Hankyu-Hanshin’s stake in Tokyo-based Rakutenchi. HH buys out Toho’s stake in Kobe-based OS Corp. This is a “TOB Swap”. HH owns 21.7% of Toho too.
- Like Rakutenchi, it is being done at a PBR higher than 1, but a decent discount to NAV. But this one is horribly, horribly illiquid (1,000 shs/day)
Oh, The Irony! Perpetual Rejects Soul Patts’ “Fair” Offer
- Yesterday, Washington H. Soul Pattinson and Co. Ltd (SOL AU) made a $3bn scrip offer Aussie-listed equities manager Perpetual Ltd (PPT AU).
- Under the indicative terms, PPT shareholders receive one-third of the Offer in SOL shares, and two-thirds in PPT’s asset management arm via an in-specie spin-off.
- PPT rejected the proposal as it undervalues PPT, its corporate trust and wealth management businesses; and it offers SOL shares as consideration. But the Offer is not without merit.
Quiddity HSCEI Mar 24 Rebalance: Same Rankings; Same Questions
- The HSCEI serves as a benchmark to reflect the overall performance of the top 50 “Mainland China” securities listed in Hong Kong.
- In this insight, we take a look at the potential index changes and the resultant capping flows for HSCEI in March 2024.
- Based on the current data, I see only one low-conviction ADD and one low-conviction DEL.
Quiddity HSTECH Mar 24 Leaderboard: Third Time’s A Charm?
- The HSTECH Index tracks the performance of the top 30 technology companies listed in Hong Kong that have high business exposure to certain technology themes.
- In this insight, we take a look at the rankings of potential ADDs and potential DELs for the March 2024 index rebalance.
- Based on the current numbers, our estimate shows there could be one ADD and one DEL but there are some question marks due to the past index review outcomes.
NIFTY200 Momentum30 Index Rebalance: 18 Changes a Side, 58% Turnover, Momentum Intact
- There are 18 changes for the Nifty200 Momentum 30 Index that will be implemented at the close on 28 December. We had forecast all the index changes.
- Estimated one-way turnover is 57.7% resulting in a one-way trade of INR 21.75bn (US$261m). 8 stocks have over 1x ADV to trade; 21 stocks have atleast 0.5x ADV to trade.
- The adds have continued to outperform the deletes and the index and there could be further outperformance heading into year-end and buying from passive trackers.
Focus on Leverage Reduction
- Cellnex Telecom Sau (CLNX SM) plans to divest non-strategic assets in Ireland (for around €1.1 billion) and later in Austria in order to reduce its debt.
- The new strategy focuses on portfolio rationalisation due to the higher debt costs. Cellnex seeks expansion in certain markets, but without taking on too much debt.
- Using multiples EV/EBITDA, my base-case fair value estimate (pro-forma Ireland divestment) is €48.73; a reduction in leverage should drive multiple expansion. Long.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
