In today’s briefing:
- Insignia Financial (IFL AU): Bumpity Bumpity. Expect Bain To Match – Or Exceed – CC Capital’s Terms
- EQD | Samsung Electronics – How to Position Amid a Plethora of Catalysts
- Event Driven: Shankara Building Products, A Demerger Play
- Macromill (3978 JP): CVC Bumps to JPY1,250, but the Offer Remains Light
- Flagging the Hanwha Ocean CB Conversion Risk (20% of Shares Out)
Insignia Financial (IFL AU): Bumpity Bumpity. Expect Bain To Match – Or Exceed – CC Capital’s Terms
- After CC Capital waded in on the 6th January with a A$4.30/share NBIO for wealth manager Insignia Financial (IFL AU), trumping Bain’s A$4.00/share proposal, Bain subsequently matched CC Capital’s terms.
- CC Capital has now lifted is indicative Offer to A$4.60/share, a ~50% premium to undisturbed. Time for IFL to engage. And for Tanarra to be supportive.
- And Bain? I expect them to match CC Capital’s terms, again; if not a small premium.
EQD | Samsung Electronics – How to Position Amid a Plethora of Catalysts
- Samsung Electronics stock has been an underperformer outright and also relative to Kospi200 as an overhang of catalysts has weighed on performance.
- Implied vols are at the 88th percentile over the last 3 years and are at the top of their range relative to Kospi200.
- We recommend 4 different ways to position in front of these catalysts and the large stock buy-back that was announced in November.
Event Driven: Shankara Building Products, A Demerger Play
- Shankara Building Products L (SHANKARA IN) plans to demerge its steel manufacturing and building materials marketplace, enabling each business to operate independently with tailored leadership and capital allocation strategies.
- This separation allows for targeted expansions in non-steel product lines and dedicated manufacturing improvements, potentially raising margins and fueling profitable growth in India’s booming construction market.
- Focused leadership, improved transparency, and strategic capital deployment could enhance investor confidence, offering significant upside as Shankara refocuses on high-growth segments and streamlines its operations post-demerger.
Macromill (3978 JP): CVC Bumps to JPY1,250, but the Offer Remains Light
- Macromill, Inc (3978 JP) disclosed a revised tender offer from CVC at JPY1,250, an 8.7% premium to the previous JPY1,150 offer. The offer has been declared final.
- The revised offer is reasonable compared to historical trading ranges. Since the announcement of the offer, the share price has never exceeded it.
- CVC seeks an irrevocable from Oasis, but Oasis has several reasons to ignore the overtures. Due to the high required acceptance rate, a gross spread of 0.2% is unattractive.
Flagging the Hanwha Ocean CB Conversion Risk (20% of Shares Out)
- KEXIM ignoring this premium could be a breach of duty, making Hanwha Ocean a prime short play. With 20% of shares, past cases suggest a 5-10% pullback.
- This play’s tougher than HMM’s. Without step-ups, timing the conversion is tricky. Early redemption’s unlikely, so the focus is on when KEXIM pulls the trigger on the conversion.
- No hints from KEXIM on the CB conversion yet, so loading up aggressively could be risky. We’ll likely need to wait for a signal from KEXIM before jumping in.
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