In today’s briefing:
- [JAPAN M&A] Shionogi (4507) Bids for Torii Pharma (4551) – Split Price Deal on Weak Transparency
- Laopu Gold (6181 HK): US$300m Primary Placement & Index Inclusion Green Light
- NTT (9432) To Overpay To Take Over NTT Data (9613) Subsidiary?
- ZEEKR (ZK US): Geely Auto’s Light Non-Binding Offer at US$25.66 Per ADS
- CATL (300750 CH): Index Inclusion as Potential Listing Nears
- Swiggy IPO Lockup – US$7.9bn Lockup Release
- Torii Pharma (4551 JP): Shionogi & Co (4507 JP) JPY6,350 Tender Offer
- Event Driven: Deep Dive into Siemens Limited’s Energy Demerger
- Zeekr (ZK US): Minorities Have Limited Options Amid Geely’s Low-Balled Offer
[JAPAN M&A] Shionogi (4507) Bids for Torii Pharma (4551) – Split Price Deal on Weak Transparency
- Today after the close, Shionogi & Co (4507 JP) and Torii Pharmaceutical (4551 JP) announced an agreed deal whereby Shionogi would launch a Tender Offer to take over Torii.
- Torii Pharmaceutical shares rallied sharply after earnings so the actual TOB Price of ¥6,350/share is not a particularly high premium vs undisturbed. Valuation transparency is limited. Synergies are not included.
- But the price is an ATH, the company is heavily de-levered (so a 23% premium to undisturbed is decent) and the minimum threshold is not high.
Laopu Gold (6181 HK): US$300m Primary Placement & Index Inclusion Green Light
- Full circulation implementation at the beginning of April derailed Laopu Gold (6181 HK)‘s chances of global index inclusion in May.
- The company has now launched a US$300m primary placement that will significantly improve chances of inclusion in the same global index in August.
- Laopu Gold (6181 HK) will also be added to another global index in September, so there are a few index inclusions likely for the stock this year.
NTT (9432) To Overpay To Take Over NTT Data (9613) Subsidiary?
- This morning, the Nikkei says NTT (Nippon Telegraph & Telephone) (9432 JP) has decided, 5 years after taking Docomo private, to buy out minorities in NTT Data Corp (9613 JP).
- NTT owns 58%. The article suggests a “30-40% premium” (¥3,900-4,200) “is likely”, with the parent spending ¥2-3trln (¥3,380-5,060) on the deal. The numbers are a bit all over the place.
- It will go limit up today to ¥3,492. A deal should be announced today after the close when NTT Data reports earnings. There’s a cool index event too.
ZEEKR (ZK US): Geely Auto’s Light Non-Binding Offer at US$25.66 Per ADS
- Geely Auto (175 HK), the controlling shareholder, disclosed a cash or scrip non-binding proposal for ZEEKR (ZK US) at US$25.66 per ADS or 12.3 newly issued Geely shares.
- While the offer is 22.2% above the IPO price, it is unattractive compared to historical trading ranges, peer multiples and average sell-side price targets.
- The shareholder vote is a formality as Geely and concert parties exceed the two-thirds voting threshold. The key risk is the timing of a binding proposal.
CATL (300750 CH): Index Inclusion as Potential Listing Nears
- Reports continue to indicate a US$5bn raise for CATL H-shares with a discount of up to 10% to CATL (300750 CH) and with cornerstone investors taking up half the deal.
- The company is currently gauging investor demand. The IPO could open next week and the H-shares could list later this month.
- Index Fast Entry largely depends on the cornerstone investor allocation. Float higher than 50%/60% is required for Fast Entry to global indices.
Swiggy IPO Lockup – US$7.9bn Lockup Release
- Swiggy (SWIGGY IN) raised around US$1.35bn in its India IPO in Nov 2024. The lockup on its pre-IPO investors is set to expire soon.
- Swiggy is a business to commerce marketplace company offering users a platform for ordering grocery and household items and food delivery, through its on-demand delivery network
- In this note, we will talk about the lockup dynamics and possible placement.
Torii Pharma (4551 JP): Shionogi & Co (4507 JP) JPY6,350 Tender Offer
- Torii Pharmaceutical (4551 JP) has recommended a tender offer from Shionogi & Co (4507 JP) at JPY6,350 per share, a 13.8% premium to the last close.
- Despite the lack of an auction and low takeover premium, the offer is attractive compared to historical trading ranges and peer multiples and represents an all-time high.
- Japan Tobacco (2914 JP), the controlling shareholder, has provided an irrevocable. The required minority acceptance rate is achievable as the offer is reasonable.
Event Driven: Deep Dive into Siemens Limited’s Energy Demerger
- Siemens Ltd (SIEM IN) is spinning off its Energy Business into Siemens Energy India Limited (SEIL), creating two independent entities for focused growth and unlocking shareholder value.
- Post-Demerger, SEIL is well-positioned in the Indian energy sector, benefiting from decarbonization initiatives, capital investments, and strong export potential in the coming years.
- The remaining Siemens Limited will concentrate on technology sectors like Industry, Infrastructure, and Mobility, maintaining its strong business profile and order backlog, ensuring continued growth post-demerger.
Zeekr (ZK US): Minorities Have Limited Options Amid Geely’s Low-Balled Offer
- Geely Auto (175 HK), China’s second-largest carmaker, has made an non-binding proposal for 65.7%-held Zeekr (ZK US), a premium Chinese electric vehicle manufacturer.
- Geely is offering US$25.66/ADS, a paltry 13.6% premium. Or 12.3 newly issued shares. The Offer appears opportunistic after Zeekr’s 20% decline YTD (pre-Offer) in response to Trump tariffs.
- Should a definitive agreement be inked, this is done. The risk to the trade, as with many US-listed China plays, is timing. Trading tight at a 1.9% gross spread.
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