In today’s briefing:
- Roland DG (6789) – Tender Offer by Taiyo Partners – Nice Premium But Too Cheap
- Screen Holdings (7735 JP): Positioning & Potential Passive Buying
- Weekly Deals Digest (11 Feb) – Lawson, Benefit One, Welbe, China TCM, L’Occitane, Hollysys
- Welbe (6556 JP) – MBO by Polaris
- Exploring Prioritized Buyback/Cancellation of Samsung Electronics & Hyundai Motor Prefs
- Magyar Vagon/Talgo: Looming Takeover Offer
Roland DG (6789) – Tender Offer by Taiyo Partners – Nice Premium But Too Cheap
- Taiyo Pacific Partners took the original parent company (Roland Corp (7944 JP) of Roland DG Corp (6789 JP) private in 2014. It was re-listed in 2020.
- Roland DG is one of the world’s leading large format digital printer manufacturers. They also make some interesting medical devices and systemic tools, and 3D milling/printing/engraving/photo impact machines.
- This TOB is at a 30.1% premium. Almost a 10yr high. But it is not expensive. And even if TPP has 20%, there is a LOT of float left over.
Screen Holdings (7735 JP): Positioning & Potential Passive Buying
- SCREEN Holdings (7735 JP) could be added to a global index at the end of the month and there will be a lot of buying in the stock.
- There is a fair bit of positioning for the potential passive buying and there will be supply in the stock.
- However, the stock trades cheaper than its peers and a correction could provide an opportunity for long-term investors to enter the stock.
Weekly Deals Digest (11 Feb) – Lawson, Benefit One, Welbe, China TCM, L’Occitane, Hollysys
- A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
- ECM developments: Ola Electric (1700674D IN) and FirstCry (0172540D IN) IPOs.
- Event-Driven developments: Benefit One Inc (2412 JP), Lawson Inc (2651 JP), Welbe Inc (6556 JP), China Traditional Chinese Medicine (570 HK), L’Occitane (973 HK), Hollysys Automation Technologies (HOLI US).
Welbe (6556 JP) – MBO by Polaris
- On Thursday after the close, an entity tied to Polaris Capital announced an MBO of Welbe Inc (6556 JP). (Note this is Welbe not Welby Inc (4438 JP)).
- The MBO by Tender Offer is set at ¥1,089/share is at a 29.952% premium to Thursday’s last trade. Coincidentally. It is well below where it traded 3-5 years ago.
- If large domestic financial investors want a bump, we might see some fun, but I expect there is enough ownership willing to tender to get this over the hump.
Exploring Prioritized Buyback/Cancellation of Samsung Electronics & Hyundai Motor Prefs
- Samsung Elec & Hyundai Motor’s high proportion of preferred stocks leads to their unusually high cost of capital, making themselves prime targets for the govt’s Corporate Value Up policy.
- Policy likely focuses on aggressive share buybacks, especially preferred stock repurchase, to improve PBR. Pension funds may invest heavily in ETFs, offsetting dilution effects.
- Hyundai Motor may pursue more aggressive shareholder returns due to the India listing, possibly prioritizing preferred share repurchases as it introduces risks of value transfer controversies within Korea.
Magyar Vagon/Talgo: Looming Takeover Offer
- Trading in the shares of Spanish rolling stock manufacturer Talgo SA (TLGO SM) is suspended pending a possible €5/share takeover offer from Hungarian group Magyar Vagon.
- Stock market performance of Talgo has been lacklustre. Now, at €4.79, the shares are trading above comparables, in line with my fair value estimate (DCF-based) of €4.76/share.
- Top investors (>45%) seem very willing to cash in and I would imagine that Magyar Vagon has had the time to seek green light assurances from the Spanish Government. Long.
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