Daily BriefsEvent-Driven

Daily Brief Event-Driven: HSI and more

In today’s briefing:

  • HSI, HSCEI, HSTECH: Rebalance Flows Post Capping (June 2023)
  • Medtronic’s M&A, Tender Offer, and Taking Private of Eoflow
  • NIFTY NEXT 50 Index Market Consultation: Non-F&O Stocks Could Be Dropped
  • Quiddity Leaderboard JPX-Nikkei 400: End-May 2023
  • Challenger Technologies (CHLG SP): Loo Family/Dymon Asia’s Skinny Unconditional S$0.56 Offer
  • Challenger Tech’s Derisory Unconditional Offer
  • Peace Within the Board and Focus on Organic Growth

HSI, HSCEI, HSTECH: Rebalance Flows Post Capping (June 2023)

By Brian Freitas


Medtronic’s M&A, Tender Offer, and Taking Private of Eoflow

By Douglas Kim

  • In this insight, we provide the details of Medtronic’s M&A and tender offer for Eoflow. 
  • Currently, Eoflow is trading at 28,050 won which is 6.5% lower than the tender offer price of 30,000 won.
  • Eoflow’s share price is currently comfortably below 30,000 won and we believe this deal has 95-98%+ probability of getting completed within the current M&A framework.

NIFTY NEXT 50 Index Market Consultation: Non-F&O Stocks Could Be Dropped

By Brian Freitas

  • NSE Indices have started a market consultation on dropping stocks that are not a part of the Futures & Options segment from the Nifty Next 50 Index (NIFTYJR INDEX)
  • This will be done in two phases with a weight reduction for non-F&O stocks in June and deletion from the index in September.
  • That will result in 11 inclusions to the Nifty Next 50 Index (NIFTYJR INDEX) in September and bring in a lot of flow to the stocks.

Quiddity Leaderboard JPX-Nikkei 400: End-May 2023

By Janaghan Jeyakumar, CFA

  • The JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted (capped) market-value-weighted index composed of 400 constituents.
  • A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. We look at the potential forward inclusions and removals every month.
  • Below is a look at potential Inclusions and Removals for the JPX-Nikkei 400 Rebalance to be announced in early August 2023 based on trading data as of end-May 2023.

Challenger Technologies (CHLG SP): Loo Family/Dymon Asia’s Skinny Unconditional S$0.56 Offer

By Arun George

  • Challenger Technologies (CHLG SP) has disclosed a voluntary unconditional offer from Dymon Asia and the Loo Family at S$0.56 per share, a 1.8% premium to the undisturbed price (29 May). 
  • The little to no offer premium will leave minorities aggrieved. Hitting the 90% compulsory acquisition threshold implies a minority acceptance rate of 31.3%. The offer has not been declared final.
  • The offer is set to follow the recent SGX voluntary unconditional offer playbook – a lowball offer followed by declaring the offer final after a cursory bump.

Challenger Tech’s Derisory Unconditional Offer

By David Blennerhassett

  • Consumer electronics retailer Challenger Technologies (CHLG SP) has announced a voluntary unconditional cash offer of S$0.56/share. The Offer price has not been declared final.
  • The Offeror is led by Dymon Asia Private Equity and Challenger’s CEO Loo Leong Thye, who collectively hold 54.37%. 
  • Including other Loo family members and additional irrevocables, there is a high probability Challenger breaches the public float at the conclusion of the offer and be suspended. 

Peace Within the Board and Focus on Organic Growth

By Jesus Rodriguez Aguilar

  • The board’s renewal and the arrival of a new CEO (both should be a positive catalyst) are on track and will be completed in the coming weeks.
  • Gone the takeover angle, Cellnex’s new strategy focuses on organic growth and deleveraging, aiming an investment grade rating and reducing net debt by end of FY2024 (already 5.6x net debt/2023e EBITDA).
  • Cellnex trades at 15.3x EV/Fwd EBITDA, vs. 28.8x American Towers and 24.4x Inwit. TCI may still look for ways to increase the value of its investment.

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