In today’s briefing:
- ENN Energy (2688 HK): ENN Natural Gas’ Preconditional Cash/Scrip Offer
- Shinko Electric (6967) – Chicken and Logistics
- Changes to Hang Seng Methodology – Early Doors but $3bn a Side Across Major Indices
- Korea Exchange Highlights 38 Companies That Could Be Delisted in 2025
- ENN Energy (2688 HK) Privatization: Details & Index Implications
- Norwegian Billionaire Øystein Spetalen’s Mandatory Bid for SAGA Pure
- A Power Move: Naturgy Sparks a Strategic Rebalance
- Taking Stock Off the Market: Alba’s Final Call
ENN Energy (2688 HK): ENN Natural Gas’ Preconditional Cash/Scrip Offer
- ENN Energy (2688 HK) announced a pre-conditional privatisation from ENN Natural Gas (600803 CH)/ENN-NG comprising HK$24.50 cash per share + 2.9427 ENN-NG H Shares per ENN share.
- The appraised offer value is HK$80.00 (HK$82.35, including the 2024 dividend), which is a tad optimistic. My calculations suggest a realistic offer value range of HK$71.47-76.32.
- The offer is final. The precondition satisfaction is low-risk. A high AGM minority participation is a risk, but the scheme vote should pass as the offer terms are reasonable.
Shinko Electric (6967) – Chicken and Logistics
- The Tender Offer closed end of last week. The bidder JICC-04 got 59.281mm shares. Most of what was left over – perhaps even more than 100%, was passive-owned.
- More than 100%? How does that work? It works because of how the logistics goes.
- And right now, the reason why the stock is trading well through terms is a matter of Chicken and Logistics.
Changes to Hang Seng Methodology – Early Doors but $3bn a Side Across Major Indices
- Janaghan Jeyakumar, CFA put out June rebal predictions on HSCEI, HSTECH, and Hang Seng Internet & Infotech on 17-Mar-25 (and 7 mainland indices 19-21 March) and…
- …the Quiddity team put out its regular predictions of all 7 major HS indices and 11 mainland indices, but on 21-March after the close, the Hang Seng team updated methodology.
- They changed the way float is calculated for Secondary Listings in Hang Seng indices. It affects only a few names, but this adds US$2.7bn of buying to three names.
Korea Exchange Highlights 38 Companies That Could Be Delisted in 2025
- On 26 March, Korea Exchange provided a list of 38 companies in KOSPI and KOSDAQ that are subject to delisting this year.
- These 38 companies have a combined market cap of 3.4 trillion won.
- Many of these companies have received ‘refusals of opinion’ from auditors in the audit report. Some of them also face charges of embezzlement and breach of trust.
ENN Energy (2688 HK) Privatization: Details & Index Implications
- ENN Natural Gas has made a pre-conditional proposal to privatise ENN Energy (2688 HK). For each ENN share, shareholders will receive 2.9427 ENN Natural Gas shares and HK$24.5 in cash.
- The ENN Natural Gas H-shares will be listed on the HKEX. The value received by ENN Energy shareholders depends on ENN Natural Gas stock performance and the H-share discount.
- The ENN Natural Gas (600803 CH) H-shares are likely to replace ENN Energy (2688 HK) in global indices and the Hang Seng Index (HSI INDEX).
Norwegian Billionaire Øystein Spetalen’s Mandatory Bid for SAGA Pure
- Øystein Spetalen’s 50% ownership in SAGA Pure triggers a mandatory bid, with shares trading at 1.31 NOK.
- SAGA’s NAV is 1.79-1.87 NOK/share, with potential value from SDSD acquisition, contrasting with the mandatory bid price.
- SAGA’s shareholder base is mostly retail, unlike SDSD, affecting potential bid strategies and investor expectations.
A Power Move: Naturgy Sparks a Strategic Rebalance
- Naturgy’s 10% self-tender offer at €26.50/share offers a 3.5% premium and ~40.6% annualized return, pending CNMV approval with settlement likely by mid-May 2025.
- Strategic negotiations may see Taqa acquire up to 29.9% from exiting funds GIP and CVC, rebalancing Naturgy’s ownership toward industrial partners and reducing geopolitical friction.
- With treasury shares reissued, free float could rise to 21%, boosting ADTV above €12 million and enhancing index eligibility, while dividend payouts remain attractive despite temporary uplift being unsustainable.
Taking Stock Off the Market: Alba’s Final Call
- Corporación Financiera Alba’s delisting offer runs from today until April 24, 2025, offering €84.20 per share with a 0.60% gross spread and no intention to implement a squeeze-out.
- With shares trading at €83.70 and low daily liquidity (~€1 million), the offer presents a 6.05% annualized return for investors tendering into the deal by the estimated May 2 settlement.
- Despite a 15.6% NAV discount, arbitrage through shorting Alba’s listed assets is complex and likely only feasible for institutional investors with efficient execution and access to shorting facilities.
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