In today’s briefing:
- [Japan M&A] Seven Bank (8410) – Seven & I Selldown, Itochu Buy-In, Not on My Bingo Card But Not Bad
- CATL (3750 HK): The Tail Wags the Dog
- Mayne Pharma (MYX AU): A Case of Buyer’s Remorse
- [Japan M&A] Shibaura in Limbo – “Neutral” On Minebea And “Reserves Opinion” On YAGEO Bid, Waiting…
- Intel Summary on Samsung Biologics Split and Samsung C&T’s Acquisition of Samsung Electronics Shares
- Shibaura Electronics (6957 JP): Board’s Changed Stance as Minebea Hopes Reg Approvals Derail Yageo
- ESR Group (1821 HK): Done Deal as Scheme Vote on 13 June
- Key Microstructure Angles to Watch as NXT Volume Caps Kick In
- ESR (1821 HK): 13th June Vote On Starwood/Warburg’s Offer
- Fintech Alpha: Unlocking Hidden Value as Corpay Circles
[Japan M&A] Seven Bank (8410) – Seven & I Selldown, Itochu Buy-In, Not on My Bingo Card But Not Bad
- Seven Bank Ltd (8410 JP) has been the ugly duckling of Japan e-banks since it got competition in the form of Rakuten Bank (5838) and SBI Sumishin (7163).
- Last year, it was posited, and then confirmed, that Seven & I Holdings (3382 JP) wanted to sell down to de-consolidate. NTT Docomo wanted to buy a bank.
- I thought it a good match but no deal has been done. So now we get a different deal – it’s weird for Itochu, but bodes well for Seven Bank
CATL (3750 HK): The Tail Wags the Dog
- The buying in Contemporary Amperex Technology (3750 HK) over the last couple of days has dragged Contemporary Amperex Technology (CATL) (300750 CH) higher as the arbs trade the AH spread.
- The Fast Entry into a global index could keep CATL (3750 HK) supported over the next few trading days, but reality will take hold pretty soon.
- Short CATL (3750 HK) / long CATL (300750 CH) offers great risk/reward, while an outright CATL (3750 HK) short offers higher return albeit at a much higher level of risk.
Mayne Pharma (MYX AU): A Case of Buyer’s Remorse
- Mayne Pharma (MYX AU) disclosed that Cosette asserts that a material adverse change has occurred due to its trading performance, litigation and FDA untitled letter.
- Cosette has not quantified the impact, and Mayne disputes the assertion. Mayne’s trading performance is likely the largest contributor to Cosette’s MAC-related claims.
- Precedent schemes suggest a lower offer is the best-case scenario. An unwilling bidder looking for angles, contractually, to exit suggests the likely outcome is a scheme termination.
[Japan M&A] Shibaura in Limbo – “Neutral” On Minebea And “Reserves Opinion” On YAGEO Bid, Waiting…
- Yageo Corporation (2327 TT) approached Shibaura Electronics (6957 JP) for a takeover at ¥4300. Shibaura dismissed them and asked Minebea Mitsumi (6479 JP) to overbid. They did at ¥4500.
- Then Yageo overbid Minebea at ¥5400, who then overbid Yageo at ¥5500, who then re-overbid at ¥6200. Despite not having its FEFTA Approval in place, YAGEO overbid and launched.
- The Minebea CEO objected. We don’t know status. Now the Shibaura Special Committee has paused, supporting but not recommending the Minebea bid and Neutral on Yageo. We are in limbo.
Intel Summary on Samsung Biologics Split and Samsung C&T’s Acquisition of Samsung Electronics Shares
- Samsung Biologics is spinning off Samsung Bio Holdings, transferring full Samsung Bioepis shares; shareholders keep stakes in both, with an expected 70:30 split favoring Biologics.
- Post-Split, major shareholders keep stakes; they’ll transfer Biologics shares to Bio Holdings, which becomes parent owning 74.34% Biologics and 100% Bioepis, meeting holding company rules.
- Samsung C&T’s restructuring carves out Biologics into a holdco, lowering valuation to avoid forced holding company conversion and enabling future Samsung Electronics share acquisition.
Shibaura Electronics (6957 JP): Board’s Changed Stance as Minebea Hopes Reg Approvals Derail Yageo
- The Shibaura Electronics (6957 JP) Board supports Minebea Mitsumi (6479 JP) JPY5,500 offer, but has shifted its recommendation from tendering to a neutral stance.
- The Board maintains that it is not yet in a position to provide an opinion on Yageo’s JPY6,200 offer due to concerns on feasibility and synergies.
- Minebea hopes Yageo will withdraw due to its failure to secure regulatory approvals. If Yageo secures the required approvals, Minebea will actively consider measures.
ESR Group (1821 HK): Done Deal as Scheme Vote on 13 June
- ESR Group (1821 HK)’s IFA opines that the consortium’s HK$13.00 offer is fair and reasonable. The vote is on 13 June.
- Key conditions include approval by at least 75% of independent shareholders (<10% of independent shareholders rejection). The offer price is final.
- This is a done deal due to the substantial irrevocables. At the last close and for the 10 July payment, the gross/annualised spread is 1.3%/9.12%.
Key Microstructure Angles to Watch as NXT Volume Caps Kick In
- With the September review looming, base case is NXT holds steady for now, then starts cutting volume around mid-July — a move that could trigger dislocations in NXT-heavy names.
- In theory, SOR shifts retail flow from NXT to KRX seamlessly—but if retail floods in fast, KRX’s institution-heavy book might struggle, causing depth issues or delayed fills.
- The attached Excel shows NXT volume share by ticker — a useful read on names heavily reliant on NXT ahead of July caps, where pressure points may start to emerge.
ESR (1821 HK): 13th June Vote On Starwood/Warburg’s Offer
- On the 4th December 2024, the Starwood/Warburg Pincus Consortium announced a firm pre-conditional Offer for ESR Group (1821 HK) at HK$13/share (best & final), by way of a Scheme.
- There was a raft of pre-cons, however processing went like clockwork, and all were satisfied by the 15th May.
- The Scheme Doc is now out, with a Court Meeting on the 13th June, and payment on or before the 10th July. The IFA (Anglo Chinese) says “fair & reasonable“.
Fintech Alpha: Unlocking Hidden Value as Corpay Circles
- PUSU deadline looms on May 30, giving Corpay limited time to submit a firm bid or walk away—raising the stakes for investors monitoring deal certainty and potential upside.
- Alpha’s valuation remains compelling, with a blended takeover value of ~3,795p vs. a current share price of 3,050p, implying ~24% upside on deal completion.
- Synergies estimated at ~99p per share could lift deal terms; I see a 65% probability of a formal bid, recommending accumulation around 3,000p for event-driven investors.
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