In today’s briefing:
- Korean Government’s Official Statement on Foreign Ownership Limits & The Names Still to Watch
- Australian Clinical Labs (ACL) Lowballs an All-Stock Offer for Healius (HLS)
- MSCI Korea May QCIR: Potential Changes, Impact, Positioning & Short Interest
- Healius (HLS AU): Australian Clinical Labs (ACL AU)’s Nil-Premium Merger Needs a Rethink
- Healius: Australian Clinical Labs’ Opportunistic Merger Proposal
- Essential Metals (ESS AU): Tianqi/IGO JV Scheme Meeting on 20 April
- Bionote Lock-Up – Uncertainty on the Horizon, Likely to See Some Selling Pressure
- Quiddity Leaderboard for UK F100/250 June 2023: Mediclinic Replacement Candidates Have High Impact
- Essential Metals (ESS AU)’s Scheme: Shareholders To Vote On 20 April. MinRes In The Wings?
- Potential Inclusions & Exclusions in KOSDAQ 150 Rebalance in May 2023
Korean Government’s Official Statement on Foreign Ownership Limits & The Names Still to Watch
- Hankyung exclusively reported that the Korean regulators were considering abolishing the foreign ownership limit. This morning, the Ministry of Economy and Finance released a statement that this report is untrue.
- Nevertheless, circumstantially, given the current government’s all-out effort to make it to MSCI Developed Market status, there is a high possibility that it will resurface not too far from now.
- Four out of the 33 foreign ownership-restricted stocks will likely be immediately affected: SKT, KT, and Korea Gas (MSCI inclusion) and SBS (flow improvement).
Australian Clinical Labs (ACL) Lowballs an All-Stock Offer for Healius (HLS)
- Australian Clinical Labs (ACL AU) has announced its intention to make an off-market takeover for Healius (HLS AU) offering 0.74 ACL shares for each Healius share.
- The offer represents a nil-premium merger and if successful will result in current Healius (HLS AU) shareholders owning 68% of the merged company.
- The offer is a big discount to longer-term VWAPs. We don’t expect shareholders will tender and Australian Clinical Labs (ACL AU) will need to sweeten the offer.
MSCI Korea May QCIR: Potential Changes, Impact, Positioning & Short Interest
- We currently forecast 2 potential inclusions and 3 potential deletions for the MSCI Korea Index at the May QCIR. That will change over the next few weeks till cutoff date.
- Passive trackers are estimated to buy between 0.6-3.3 days of ADV on the potential inclusions while selling between 6.9-14.2 days of ADV on the potential deletions.
- Short interest on the potential deletions has moved significantly higher in the last few weeks and there will be pre-positioning on the stocks.
Healius (HLS AU): Australian Clinical Labs (ACL AU)’s Nil-Premium Merger Needs a Rethink
- Australian Clinical Labs (ACL AU) has launched an all-scrip off-market takeover offer for Healius (HLS AU) at 0.74 ACL shares for each HLS share.
- The offer is saddled with several onerous conditions which disproportionately shift the risk to HLS shareholders. The offer is long-dated as ACCC approval is expected to take six months.
- The lack of premium and unattractive deal metrics suggests a high probability of Board rejection. Nevertheless, ACL’s bid underscores HLS’s beaten-down valuation. Expect improved terms.
Healius: Australian Clinical Labs’ Opportunistic Merger Proposal
- Australian Clinical Labs (ACL AU) has announced a merger proposal for Healius (HLS AU), the completion of which would create Australia’s largest pathology provider.
- ACL is offering 0.74 new shares for each share in Healius. Healius shareholders will hold 68% of the enlarged entity, with ACL shareholders holding 32%.
- The Offer is conditional on a 90% minimum acceptance condition and regulatory approvals (ACCC and FIRB). Healius’ board is evaluating the Offer.
Essential Metals (ESS AU): Tianqi/IGO JV Scheme Meeting on 20 April
- The IE considers Tianqi Lithium (9696 HK)/IGO Ltd (IGO AU) JV’s A$0.50 offer for Essential Metals (ESS AU) to be fair and reasonable as it is higher than its A$0.283-0.468 valuation.
- Odey, the recent substantial shareholder, hoped for a competing proposal which has not materialised. On 10 March, Odey sold down 21% of its holding at A$0.48 per share.
- Barring an unlikely competing proposal, this is done. At the last close price and for the 5 May payment, the gross and annualised spread is 3.1% and 28.4%, respectively.
Bionote Lock-Up – Uncertainty on the Horizon, Likely to See Some Selling Pressure
- Bionote (377740 KS) was listed on 22nd Dec 2023, when it raised US$73m in its downsized Korean IPO. Its three-month lockup will expire on 21st Mar 23.
- Bionote is an integrated producer of diagnostics test products and biocontent products. Based on its unique recombinant antigen and antibody manufacturing technology, the firm researches and develops diagnostic reagent products.
- Coming up for three-month lockup expiry are the firm’s three pre-IPO investors, together with Gunwoo Ha (ex-CEO). The three pre-IPO investors had earlier trimmed their respective stakes in the IPO.
Quiddity Leaderboard for UK F100/250 June 2023: Mediclinic Replacement Candidates Have High Impact
- In this insight, we take a look at the potential index changes for F100 and F250 in the run up to the June 2023 Rebalance.
- Based on latest prices, there are no changes expected for F100 while there could be up to four changes in F250 between now and the June 2023 Rebalance
- This includes the potential intra-review replacement of F250 member Mediclinic International (MDC LN) in the F250 index.
Essential Metals (ESS AU)’s Scheme: Shareholders To Vote On 20 April. MinRes In The Wings?
- Back on the 9th Jan, small lithium player Essential Metals (ESS AU) entered into a Scheme with Tianqi Lithium JV, comprising Tianqi (9696 HK) (51%) and IGO (IGO AU) (49%).
- The Scheme Booklet is now out, with a Scheme Meeting tabled for the 20 April. The Independent Expert reckons the Scheme Consideration is fair. FIRB is no longer required.
- This is done and has traded tight from the onset.
Potential Inclusions & Exclusions in KOSDAQ 150 Rebalance in May 2023
- In this insight, we discuss the potential inclusions and exclusions of the upcoming KOSDAQ 150 rebalance in May 2023.
- The next round of KOSDAQ 150 rebalance will be announced in May and it will be effective as of end of May 2023.
- Typically, the potential inclusions and exclusions to KOSDAQ 150 make their biggest moves in the one to three months prior to the rebalance announcements.
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