In today’s briefing:
- [Japan M&A] CEO & Chairman Entice GS to Sponsor an MBO for Recently Lackluster Raksul (4384)
- Raksul (4384 JP): GS-Sponsored MBO at JPY1,710
- Predictive (PDI AU) & Robex (RBX AU) Together Again
- Meilan Airport (357 HK)’s SPA (Finally) Done. Now For The HK$10.62/Share MGO
- Predictive Discovery (PDI AU): Is Robex’s Revised Offer Really a Superior Proposal?
- A Tender Offer of 52.5% Stake in Rothwell International by Trillion Luck Group
- ANE Cayman (9956 HK): CDH Holds All The Cards
- IGI IPO Lockup – US$900m Release with PE on 4x+ Gains
- SNT Holdings: Issuing CB and EB Totalling 148 Billion Won
- SSI Newsletter Highlights: Merger Arbitrage Opportunities, Strategic Reviews and More
[Japan M&A] CEO & Chairman Entice GS to Sponsor an MBO for Recently Lackluster Raksul (4384)
- Raksul Inc (4384 JP) is a business roll-up business. They do printing, and advertising, and marketing, and supply. They want to be all things to all SMEs.
- They are pretty good at it. Revenues and EBIT have been growing at 20-30% a year for years, and are scheduled to grow 19% and 26% for several years ahead.
- The bid is up 40% from last, but that gets them to a 30-month high. The register is very open. Lots of active institutional shareholders who have to agree. Maybe.
Raksul (4384 JP): GS-Sponsored MBO at JPY1,710
- Raksul Inc (4384 JP) has recommended a Goldman Sachs Group (GS US)-sponsored MBO at JPY1,710, a 39.5% premium to the last close.
- While the process is lacking (no auction), the offer is reasonable compared to peer multiples, analyst price targets and historical trading ranges.
- The offer aligns with the midpoint of the target IFA DCF valuation range. Barring an emergence of an activist, this should get done.
Predictive (PDI AU) & Robex (RBX AU) Together Again
- After Perseus Mining (PRU AU) fielded a scrip option for 17.8%-held Predictive Discovery (PDI AU), I questioned whether Robex Resources (RXR AU) would exercise its matching rights. I was wrong.
- Robex has “lifted its bid“, now 7.862 PDI for every Robex share. Under the revised Offer Robex will own 46.5% of the combined entity, down from 49%.
- PDI considers the new terms to be superior to Perseus’ tilt. Apparently, so do several of PDI’s largest shareholders. Perseus has now terminated its binding proposal. Out of the picture?
Meilan Airport (357 HK)’s SPA (Finally) Done. Now For The HK$10.62/Share MGO
- Given the change of control into Meilan Airport (357 HK), was, in effect, a re-arrangement of Meilan Airport shares under the same ultimate parent, the regulatory approval process curiously dragged.
- Yesterday Meilan Airport announced all SPA conditions have now been satisfied, and that the SPA should complete in 20 business days. A Composite Doc will then be issued.
- Trading almost at terms. This is a back-end proposition play. My peer basket is up 11%, on average, since the Offer was first announced. Asian peers are up 15%.
Predictive Discovery (PDI AU): Is Robex’s Revised Offer Really a Superior Proposal?
- Under the revised merger terms, Robex Resources (RBX CN) shareholders would receive 7.862 Predictive Discovery (PDI AU) shares per Robex share (vs 8.667 previously). PDI shareholders get 53.5% of MergerCo.
- The Board has declared that Robex’s offer is superior to the Perseus scheme’s offer. Strangely, on a value basis, the Robex revised offer is still lower than the Perseus offer.
- Robex’s offer is mainly superior due to support from major PDI shareholders, who reportedly oppose a Perseus Mining (PRU AU) scheme, thereby lowering the likelihood of a revised Perseus offer.
A Tender Offer of 52.5% Stake in Rothwell International by Trillion Luck Group
- After the market close on 11 December, Trillion Luck Group announced a tender offer of a 52.5% stake in Rothwell International Co (900260 KS).
- The tender offer price is 1,580 won per share, which is 58% higher than current price.
- There has not been a meaningful positive impact of keeping Rothwell publicly listed in Korea. It makes more sense to take the company private.
ANE Cayman (9956 HK): CDH Holds All The Cards
- The feedback I get on this transaction canvasses comments such as: “it just doesn’t feel right“, or “there’s something funny going on“, or simply “weird“.
- With~20% of the shareholder register, involving opaque pre-IPO investors, none of whom have provided IUs, a Shanghai Henlius (2696 HK)-like situation unfolding is bandied around. The comparison is, however, tenuous.
- Further inquiries suggest CDH is likely in control of 18% of that 20%. This needs to be clarified.
IGI IPO Lockup – US$900m Release with PE on 4x+ Gains
- IGI (India) Limited (IGIL IN) (IGII) raised around US$500m in its India IPO in December 2024. The lockup on its PE shareholders is set to expire soon.
- IGI India is part of the International Gemmological Institute (IGI) group. As of 22nd August 2024, IGI India handled operations of the IGI business in India and Türkiye.
- In this note, we will talk about the lockup dynamics and possible placement.
SNT Holdings: Issuing CB and EB Totalling 148 Billion Won
- SNT Holdings (036530 KS) is issuing convertible bonds (CB) and exchangeable bonds (EB) totalling 148 billion won to improve its financial structure and secure funds for new business investments.
- The investor in this CB and EB is IMM Credit & Solution (ICS), which will acquire the entire amount through a private placement.
- This additional capital raise could result in S&T Holdings potentially increasing its stake in Smec Co Ltd (099440 KS).
SSI Newsletter Highlights: Merger Arbitrage Opportunities, Strategic Reviews and More
- Emeren Group’s merger arbitrage presents a 13% spread with a shareholder vote imminent, despite operational softness concerns.
- TrueCar’s buyout vote is set for December 22, with AutoNation potentially reducing required financing by joining.
- AUB Group’s merger discussions with EQT and CVC ended without a binding proposal, reflecting management’s confidence in fundamentals.
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