In today’s briefing:
- Pentamaster International (1665 HK): A Deal Break Will Be the Right Result for a Light Offer
- FSC Gives the Green Light for Full-Scale Short Selling Today: What It Means for Trading
- Event Driven: Delta Corp Demerger~ Separation Of Core Business From Problems
- StubWorld: Haw Par’s S$1.00/Share Special Divvy
- Event Driven: KKR Acquired Controlling Stake in HealthCare Global
- Event Driven: Indorama Bought Strategic Stake in EPL~ A New Chapter in Global Packaging
- Prosus/Just Eat Takeaway: A Strategic Takeover in the Food Delivery Sector
Pentamaster International (1665 HK): A Deal Break Will Be the Right Result for a Light Offer
- The vote on Pentamaster Corp (PENT MK) and AchiCapital’s HK$1.00 for Pentamaster International (1665 HK) is on 28 February. Over the last two days, the gross spread has increased to 8.7%.
- There are valid arguments for the vote to pass or fail. Despite the IFA’s assertions that the offer is fair and reasonable, it is not and will leave minorities short-changed.
- While there is no visible opposition, the share price indicates that an activist could have secured a blocking stake (3.34% of shares, which does not require HKEx disclosure).
FSC Gives the Green Light for Full-Scale Short Selling Today: What It Means for Trading
- The push for MSCI DM inclusion drove Korea’s full short-selling resumption, clearing the KRX index rights issue, allowing MSCI to roll out derivatives, making full short selling the final step.
- With full short-selling back, traders are watching for large-scale quant funds to return, potentially boosting liquidity across the market alongside the ATS launch, after years of individual large-cap setups.
- The market is watching how full short-selling resumption narrows bid-ask spreads and impacts sector rotation, prompting traders to prepare setups for the broader market shift.
Event Driven: Delta Corp Demerger~ Separation Of Core Business From Problems
- Delta Corp Ltd (DELTA IN) announced a demerger to separate its Hospitality & Real Estate businesses from its GST-challenged Casino business. Additionally, it is divesting its online gaming business.
- The hospitality business plans to add 450 new rooms and the company owns a 100-acre land parcel near Moga Airport, which holds significant growth potential.
- The demerger will leave tax liability with the main company, while the demerged business, accounting for only 6% of revenue, will operate with focused execution and independent decision-making.
StubWorld: Haw Par’s S$1.00/Share Special Divvy
- After releasing its FY24 results last Friday, Haw Par Corp (HPAR SP) declared a S$1.00/share special dividend, in addition to a final dividend of S$0.20/share.
- Preceding my comments on Haw Par – and Singapore Land Group (SPLG SP) – are the current setup/unwind tables for Asia-Pacific Holdcos.
- These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.
Event Driven: KKR Acquired Controlling Stake in HealthCare Global
- KKR has signed definitive agreements to acquire up to 54% of HCG from CVC Asia V, positioning itself as the largest shareholder and assuming sole operational control.
- This will trigger an open offer to buy an additional 26% stake at a price of INR 504.41 per share.
- Now, HCG will be seen as a transformed healthcare leader with a robust growth trajectory, driven by global expertise and strategic restructuring for long-term value creation.
Event Driven: Indorama Bought Strategic Stake in EPL~ A New Chapter in Global Packaging
- Indorama Ventures (IVL TB) is acquiring a 24.9% stake in EPL Ltd (fka Essel Propack) (EPLL IN) from Blackstone at Rs 240, marking a major entry into India’s packaging market.
- This deal strengthens EPL’s growth and sustainability, unlocking cross-border synergies and driving competitiveness in the global specialty packaging sector.
- It redefines investment dynamics in Indian packaging sector, emphasizing sustainable growth and long-term value creation, challenging traditional global investment paradigms.
Prosus/Just Eat Takeaway: A Strategic Takeover in the Food Delivery Sector
- Prosus’ €4.1bn all-cash offer for Just Eat Takeaway.com represents a 63% premium to the pre-announcement share price and an EV/NTM EBITDA multiple of 9.3x, above the sector median of 7.2x.
- The deal strengthens Prosus’ global food delivery footprint, complementing its stakes in iFood, Delivery Hero, and Meituan, with potential synergies in AI-driven logistics, customer acquisition, and operational efficiency.
- Regulatory approval remains a key hurdle, especially in markets where Just Eat Takeaway.com and Delivery Hero hold significant shares, potentially impacting the likelihood and timeline of deal completion.
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