In today’s briefing:
- Korea: Short Selling Is Back in March; Trade Ideas
- Nidec Says It Won’t Raise Price on Makino (6135)
- Pentamaster (1665 HK) Breaks Ahead Of Vote. Yet Pricing IS Fair
- Naspers & Prosus Sell off on JET Acquisition, Discounts Oversold Lifting Buyback Accretion
- [Alert] Sell Sandisk Spin-off
- Potential Buyout of Nathan’s Famous by Smithfield Foods Could Unlock 45% Upside Amid Strategic Synergies
- PointsBet (PBH AU) Rebuffs BlueBet And Enters Offer With Mixi (2121 JP)
Korea: Short Selling Is Back in March; Trade Ideas
- Since short selling was banned in November 2023, short interest has plunged in Korea as shorts were covered. Markets have not done much over the last 16 months though.
- Foreign investor holdings have dropped from 32.05% in July to 28.57%. The top 25 stocks bought by foreign investors outperformed the top 25 stocks sold by 128% in 16 months.
- There will be trade opportunities across indices, pref/ords, index migrations and deletions, potential market upgrades and overvalued stocks being sold.
Nidec Says It Won’t Raise Price on Makino (6135)
- Nidec Corp (6594 JP) released a multi-page document regarding its bid for Makino Milling Machine Co (6135 JP) yesterday.
- It talked a bit about the back-and-forth with Makino, and gave Nidec’s side of the story. Makino has been making their side public too. A meeting is due early March.
- In the document, there was a line suggesting Nidec won’t raise price even against a counteroffer. They didn’t need to say that. The question is what Makino will do.
Pentamaster (1665 HK) Breaks Ahead Of Vote. Yet Pricing IS Fair
- Back on the 19th December 2024, Pentamaster Corp (PENT MK) announced an Offer, by way of a Scheme, to take out its pseudo dual-listed twin, Pentamaster International (1665 HK).
- The Offer Price was HK$1.00/share – including a HK$0.07/share dividend – a 45.3% premium to last close, but arguably more like a 61% premium to undisturbed.
- The Court Meeting is the 28th February. Shares are down 15%+ in recent days. On no news. Not a great look.
Naspers & Prosus Sell off on JET Acquisition, Discounts Oversold Lifting Buyback Accretion
- Yesterday morning, Prosus announced the acquisition of Just Eat Takeaway for $4.3bn.
- Naspers and Prosus sold off sharply on the news, ending the day down 7.7% and 7.8%, respectively.
- Naspers’ discount widened by 2.8 percentage points to 44.2% and Prosus’ discount widened by 3.1 percentage points to 39.8%.
[Alert] Sell Sandisk Spin-off
Today, investors received shares in the new SanDisk spin-off.
Shares are currently slightly up due to buying pressure ahead of the stock being added to the S&P 600 index effective tomorrow.
SanDisk is trading at 1.1x revenue which is a reasonable valuation (Xioxia, Sandisk’s JV partner, trades at 1.3x LTM revenue).
Potential Buyout of Nathan’s Famous by Smithfield Foods Could Unlock 45% Upside Amid Strategic Synergies
- Nathan’s Famous is in potential sale talks, with major food manufacturers and PE firms as potential buyers.
- Smithfield Foods, Nathan’s key partner, is well-positioned for acquisition, potentially eliminating royalties and achieving cost synergies.
- Sum of the parts valuation estimates Nathan’s equity value at $604m or $148/share, a 45% upside potential.
PointsBet (PBH AU) Rebuffs BlueBet And Enters Offer With Mixi (2121 JP)
- PointsBet Holdings (PBH AU), an Australian/Canadian online wagering platform, has entered into a Scheme Implementation Deed with Mixi Inc (2121 JP).
- Mixi is offering A$1.06/share, a 27.7% premium to last close and an implied EV/EBITDA of 25.2x-32.1x for FY25E. Apart from PointsBet’s shareholder approval, the Offer requires FIRB signing off.
- Separately, Pointsbet’s key rival BlueBet Holdings (BBT AU) has tabled, what appears to be, a higher non-binding cash/scrip offer by way of Scheme, which PointsBet has allegedly ignored.
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