In today’s briefing:
- JIC Launches Shinko (6967) Deal At ¥5,920/Share
- Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for March
- CVC Extends Macromill (3978) Bid and Invites Two Funds To Reinvest – More Interesting Than You Think
- Base Food (2936 JP): Partial Tender Offer at JPY688
- Soundwill Holdings (878 HK): Privatisation Expected From The Controlling Family
- Tam Jai (2217 HK): Toridoll (3397 JP)’s Scheme Privatisation at HK$1.58
- Tam Jai (2217 HK): Toridoll (3397 JP)’s Excellent Offer
- Daemyung Sono Group: Close to Acquiring the Controlling Stake in T’Way Air
- Soundwill Holdings (878 HK): Privatisation from the Controlling Shareholder?
- A Real-World Take on the Market Worries Around the Samsung Life Act Proposal
JIC Launches Shinko (6967) Deal At ¥5,920/Share
- Today quite late, the JIC Consortium announced the launch of the Shinko Electric Industries (6967 JP) Tender Offer expected “mid-February”. Price is still ¥5,920/share.
- This is basically going to be all arbs and passive now. And arbs gonna arb.
- Congrats if you bought the lows in late November early December. Great trade. Congrats if you bought the last delay dip. Now we can all go home.
Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for March
- Post market close on Friday, Hang Seng Indexes will announce the changes for the Hang Seng Index (HSI INDEX) that will be implemented at the close on 7 March.
- With no constituent changes, one-way turnover will be 2.75% with 3 stocks being capped downward. This gives the index committee the opportunity to add more stocks without significantly increasing turnover.
- The return of the high and medium probability inclusions has matched the performance of the Hang Seng Index over the last few months, Shorts have climbed in some names.
CVC Extends Macromill (3978) Bid and Invites Two Funds To Reinvest – More Interesting Than You Think
- Today, the closing date of the Tender Offer for Macromill, Inc (3978 JP) by CVC saw the tender offer extended by an extra 10 days with new news.
- Price had been declared final. One very large shareholder had said they would not tender. Two more were negotiating. Those two will now tender and reinvest in the back end.
- This does not mean the tender offer is a done deal, but it is worth examining.
Base Food (2936 JP): Partial Tender Offer at JPY688
- Base Food (2936 JP) announced a partial tender offer from MBF Acceleration, the largest shareholder.
- The offer is for a maximum of 3.7 million shares (6.97% ownership ratio) at JPY688 per share, a 23.3% premium to the last close price.
- The offer has no minimum acceptance condition, and the price is reasonable. The estimated minimum proration is 21.43%.
Soundwill Holdings (878 HK): Privatisation Expected From The Controlling Family
- Small-Cap property developer Soundwill Holdings (878 HK) is currently suspended pursuant to the Takeovers Code
- Soundwill is controlled as to 74.97% by Grace Foo (ED), and her descendants, Wai Ling Chan (deputy chairman), and Hing Tat Chan (chairman).
- Soundwill is trading at a staggering 0.08x P/B, with the majority of its book value tied up in investment properties.
Tam Jai (2217 HK): Toridoll (3397 JP)’s Scheme Privatisation at HK$1.58
- Tam Jai International (2217 HK) announced a scheme privatisation offer from TORIDOLL Holdings Corporation (3397 JP) at HK$1.58 per share, a 75.6% premium to the last close price.
- The key condition is the scheme approved by at least 75% disinterested shareholders (<10% disinterested shareholders rejection). No disinterested shareholder holds a blocking stake.
- The offer price is final. While 53% below the IPO price, the offer is attractive compared to peer multiples and historical trading ranges. This is a done deal.
Tam Jai (2217 HK): Toridoll (3397 JP)’s Excellent Offer
- After Tam Jai (2217 HK) was suspended, in Tam Jai (2217 HK) Suspended: Expect Toridoll (3397 JP) To Make An Offer I expected an Offer from TORIDOLL Holdings (3397 JP).
- I also thought an Offer price ~HK$1.50/share would be welcome, but wasn’t hopeful. We got both – a Scheme from Toridoll at HK$1.58/share (best & final).
- Clean deal. Just a question of timing. Docs may be delayed to incorporate FY25E (Mar Y/E) financials.
Daemyung Sono Group: Close to Acquiring the Controlling Stake in T’Way Air
- After the market close on 17 February, it was announced that the Daemyung Sono Group is close to acquiring the controlling stake in T’Way Air (091810 KS) from Yelimdang.
- As the negotiations between the two sides have come to a near agreement, Daemyung Sono is expected to be able to appoint nine directors at the next upcoming AGM.
- Typically in cases like this in Korea, the near term impact would be decline in share prices of T’Way Air and T’Way Holdings due to lack of an M&A play.
Soundwill Holdings (878 HK): Privatisation from the Controlling Shareholder?
- Soundwill Holdings (878 HK) has entered a trading halt “pending the release of an announcement relating to inside information and pursuant to the Codes on Takeovers and Mergers.”
- It is likely that the controlling shareholder (Foo Family Trust), representing 74.94% of outstanding shares, is seeking to launch a privatisation through a Bermuda scheme.
- While no disinterested shareholder holds a blocking stake, the headcount test necessitates an attractive offer. We estimate a potential offer price range of HK$7.53-19.44.
A Real-World Take on the Market Worries Around the Samsung Life Act Proposal
- The Rebuilding Korea Party’s hints about this bill since Thursday are seen as a key reason Samsung Electronics’ stock has stalled, despite hype around affiliate shareholder returns.
- With polls dipping, Lee is shifting right. Given the political shifts, pushing through the controversial Samsung Life Act seems unlikely for now.
- Instead of focusing on legislative chances, we should see Samsung Electronics’ stock stall as a short-term entry opportunity ahead of the shareholder return announcement
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