In today’s briefing:
- KLINE (9107) – Chances for an Additional Buyback At Q3 Earnings?
- YFO To Take the Fight To Toyo Construction’s Board
- KRX New Deal Index Rebalance Preview: Some Big Impact Names
- Norwest Energy (NWE AU): The Board Perplexing Succumbs to MinRes’ Revised Offer
- China Internet Investment (810 HK): 98% Downside
- Coway Is a Prime Candidate for Corporate Activism in Korea
- Quiddity Leaderboard STOXX Europe Mar 23: 5 ADDs/DELs and Potential Downweights for EDF and VTWR
- A Tender Offer of Osstem Implant by MBK & Unison Capital?
- Detailing Maekyung Report on MBK’s Tender Offer to Osstem Implant Shareholders at a 20% Premium
KLINE (9107) – Chances for an Additional Buyback At Q3 Earnings?
- KLine is the cheapest of the three Japan majors in terms of forward consensus PER. And forward EPS ratios are improving as the company buys back shares.
- The CEO mentioned in December the possibility of additional shareholder return this fiscal year based on cashflow.
- In this insight, we look at what he knew then, and what he might know now, and the chances for an additional buyback (and how it might work).
YFO To Take the Fight To Toyo Construction’s Board
- YFO offered another Press Release yesterday. This one outlines what they see as Corporate Governance failures and offers a NEW POLICY.
- The Corporate Governance failures are indeed, failures. Toyo’s Board has failed to be transparent with shareholders, and in not at least addressing the takeover proposal, has failed its duties.
- NEW POLICY? Elect new independent directors “capable of improving the long-term corporate value and maximizing the interests of the general shareholders.” Soft war starts now.
KRX New Deal Index Rebalance Preview: Some Big Impact Names
- The review period for the March rebalance ends on 31 January, the changes will be announced towards end February and implemented at the close of trading on 9 March.
- We forecast one add/delete for the Game Index, and a couple of adds/deletes for the BBIG Index. There will be a lot of capping changes.
- The largest inflows are expected on Posco Chemical (003670 KS) and Douzone Bizon (012510 KS); the largest outflows are expected on SK Innovation (096770 KS) and KMW (032500 KS).
Norwest Energy (NWE AU): The Board Perplexing Succumbs to MinRes’ Revised Offer
- Mineral Resources (MIN AU) has revised its offer from 1 MinRes share for every 1,367 NWE shares to 1 MinRes share for every 1,300 NWE shares. The offer is unconditional.
- The Norwest Energy NL (NWE AU) Board now recommends the offer. Most of the value uplift is due to the 17.4% increase in MinRes’ share price since 15 December.
- MinRes’ revised off-market takeover offer is fair in comparison to Warrego Energy (WGO AU)’s bids and historical ranges. However, this is predicated on the MinRes maintaining its share price run.
China Internet Investment (810 HK): 98% Downside
- Bubble-Stock China Internet Investment Finance Holdings (810 HK) (CIIFH) was suspended on the 10 January pursuant to the Hong Kong Code on Takeovers and Mergers.
- It has now announced a possible voluntary conditional takeover. No price was mentioned and terms remain indeterminate.
- CIIFH, which invests primarily in listed Hong Kong securities, is trading at an eye-watering 59.5x NAV. 98% downside from here is conceivable.
Coway Is a Prime Candidate for Corporate Activism in Korea
- In this insight, we discuss the major reasons why Coway Co Ltd (021240 KS) is a prime candidate for corporate activism in Korea.
- Netmarble has done a poor job with Coway post its acquisition in 2019.
- An action plan for Coway is to return at least half of its net profit through dividends and share buybacks/cancellations.
Quiddity Leaderboard STOXX Europe Mar 23: 5 ADDs/DELs and Potential Downweights for EDF and VTWR
- In this insight, we take a look at the names leading the race to become ADDs/DELs for the STOXX Europe 600 and EURO STOXX Indices for the March 2023 Rebalance.
- Based on the latest available data, I see five ADDs/DELs for the STOXX Europe 600 Index during the March 2023 review.
- Separately, Electricite De France Sa (EDF FP) and Vantage Towers (VTWR GR) could have index outflows triggered by extraordinary float adjustments before or during the March 2023 review.
A Tender Offer of Osstem Implant by MBK & Unison Capital?
- On 24 January, it was reported in Maeil Business Daily that MBK and Unison Capital are ready to take over the management rights of Osstem Implant through a tender offer.
- For now, Osstem Implant, MBK Partners, and Unison Capital have not confirmed on the validity of this news.
- We would attach a 70-90% probability that indeed MBK Partners and Unison Capital Korea are ready to launch a tender offer on Osstem Implant.
Detailing Maekyung Report on MBK’s Tender Offer to Osstem Implant Shareholders at a 20% Premium
- Maekyung exclusively reports MBK will do a tender offer to Osstem Implant shareholders at a 20% premium to buy a 15% stake.
- As Maekyung is a first-tier news outlet in Korea, we have to see enough credibility in this report. We should expect to see it in an official regulatory filing soon.
- We should design a play that actively utilizes the tender offer event very elaborately. Here, we need to consider immediate offerings and potential delisting from a longer-term perspective.
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