In today’s briefing:
- [Quiddity Index] Light & Wonder (LNW US/AU) US Delisting / ASX Relisting Index Event
- Cathay (293 HK) Takes Out Qatar Airway’s Stake
- Pacific Industrial (7250 JP): A Day Before Close, Effissimo Increases Its Stake Further
- Japan Infrastructure Fund (9287JP): Mizuho Leasing (8425 JP)’s Tender Offer Is Light but Likely Done
- What’s Up – Or Rather, Down – With ReNew Energy Global (RNW US)?
- Sotherly Hotels Merger: Preferred Shares Arbitrage Opportunity with 12-14% Spread Amid Buyout Conditions
- Sidara / Wood Group – Audit Cleared, One Gate to Close
[Quiddity Index] Light & Wonder (LNW US/AU) US Delisting / ASX Relisting Index Event
- In August, Light & Wonder (LNW AU) / Light & Wonder (LNW US) announced that the company would give up its US listing and move to an ASX Primary Listing.
- The NASDAQ delisting has been confirmed (as expected) for 12 November. October saw significant CDI conversions. More have come in the last few days.
- This creates a significant, and interesting set of index events to track.
Cathay (293 HK) Takes Out Qatar Airway’s Stake
- Cathay Pacific Airways (293 HK) has announced plans to acquire Qatar Airways’ 9.57% stake at HK$10.8374/share, or an outlay of HK$6.96bn (~US$890mn).
- Qatar Airways acquired this stake in November 2017 at HK$13.65/share.
- Upon approval from the SFC (mainly granting a MGO waiver), Swire Pacific (19 HK)‘s stake in Cathay increases to 47.69% (from 43.12%); and Air China’s stake to 31.78% (from 28.74%).
Pacific Industrial (7250 JP): A Day Before Close, Effissimo Increases Its Stake Further
- On 23 October, the MBO price for Pacific Industrial (7250 JP) was increased by 42.4% to JPY2,919 per share. The offer closes on 7 November.
- Today, Effissimo further increased its stake to 8.6 million shares, representing 13.97% of outstanding shares and a 14.82% ownership ratio. The implication is that Effissimo remains unsupportive.
- The shares trade above terms, and the close is likely to be extended. Another bump is possible, but likely, the Ogawas will first try to lower the minimum acceptance condition.
Japan Infrastructure Fund (9287JP): Mizuho Leasing (8425 JP)’s Tender Offer Is Light but Likely Done
- Japan Infrastructure Fund Investment Corporation (9287 JP) has recommended a tender offer from Mizuho Leasing (8425 JP) at JPY65,000, a 21.5% premium to the last close price.
- The offer is light, as it is below book value (implying a P/NAV of 0.82x) and is below the midpoint of the IFA-adjusted book valuation range.
- However, a dispersed shareholder register with no substantial shareholders suggests that it is an uphill struggle for an activist to agitate for a bump. This is likely a done deal.
What’s Up – Or Rather, Down – With ReNew Energy Global (RNW US)?
- On the 10th December 2024, ReNew Energy Global (RNW US), an Indian renewable energy play, announced US$7.07/share NBIO. The bidding consortium subsequently bumped terms to US$8/share on the 3rd July.
- After shares traded through terms for a week, the Consortium increased (best & final) non-binding terms to US$8.15/share, a 29% premium to undisturbed. The Offer is via a UK Scheme.
- That last bump was on the 10th October. JERA, with 11.7% of shares out, and 25.7% of minorities, is supportive, IF terms are firmed. The Special Committee is still mulling.
Sotherly Hotels Merger: Preferred Shares Arbitrage Opportunity with 12-14% Spread Amid Buyout Conditions
- Sotherly Hotels is being acquired by Kemmons Wilson Hospitality Partners and Ascendant Capital Partners, with common shares priced at $2.25 each.
- Preferred shares SOHOB, SOHOO, and SOHON have a 12-14% spread to offer price, with conversion options post-merger.
- The merger isn’t subject to financing conditions, with funding commitments from Apollo and Ascendant-affiliated entities.
Sidara / Wood Group – Audit Cleared, One Gate to Close
- Two gates cleared: Borrowing-limit and FY24 audit milestones complete; Sidara’s 30 p bid now hinges solely on A&E execution by 31 Dec 2025.
- Market discount persists: At 22 p, shares imply 30–35 % failure probability; downside largely priced, upside to 30 p offers 36 % absolute return.
- Event-Driven focus: Binary risk now procedural, not strategic—spread likely to tighten toward high-20s once A&E documentation confirmed.
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