In today’s briefing:
- ESR Group (1821 HK): Precondition Satisfied
- A Pair Trade (Basket) Of Korean Banks Vs Securities
- Aedifica/Cofinimmo: Belgian REITs in Stalemate Over Merger
- Grandy House (8999 JP): Full-year FY03/25 flash update
- KRI: Strong Drill Results Start to Roll In, Jagger Zone First
ESR Group (1821 HK): Precondition Satisfied
- The precondition for the consortium scheme offer for ESR Group (1821 HK) has been satisfied. The scheme document will be despatched by 22 May.
- The consortium has disclosed an additional irrevocable. Total irrevocables and letters of support represent 35.01% of outstanding shares (58.24% of disinterested shares).
- This is a done deal, helped by the material derating of peers. At the last close and for an early August payment, the gross/annualised spread is 4.3%/21.3%
A Pair Trade (Basket) Of Korean Banks Vs Securities
- In this insight, we propose a pair trade between a basket of major securities stocks (long) versus banking stocks (short) in Korea.
- We believe the five major securities stocks in Korea could continue to outperform the five major banking stocks in Korea over the next 6-12 months.
- We present 3 major headwinds on the Korean banking sector and 4 major tailwinds on the Korean securities sector.
Aedifica/Cofinimmo: Belgian REITs in Stalemate Over Merger
- Cofinimmo’s Board considers the 1.16x exchange offer significantly undervalued, citing EPS dilution, low control premium, and disproportionate benefit to Aedifica shareholders despite strategic rationale and merger synergies.
- The combined entity would form Europe’s largest healthcare REIT, benefiting from €12.1bn in assets, ~€710m contractual rents, improved diversification, and potential credit rating uplift from BBB to BBB+.
- A revised 1.21 ratio (probability-weighted value of €76.29) remains plausible, supporting a long Cofinimmo/short Aedifica arbitrage trade, though limited current spread suggests cautious sizing given deal uncertainty and downside risk.
Grandy House (8999 JP): Full-year FY03/25 flash update
- Grandy House’s FY03/25 sales increased YoY, driven by higher sales volume in Tokyo, despite a decline in homes sold.
- Pre-cut Parts segment faced YoY declines in sales and profit due to a sluggish housing market and factory upgrades.
- Total assets decreased by JPY5.7bn from end-FY03/24, mainly due to reduced inventories in the Real Estate Sales business.
KRI: Strong Drill Results Start to Roll In, Jagger Zone First
- What you need to know: • Kobo announced the first batch of drill results from the 2025 exploration campaign at its Kossou Gold Project in Côte d’Ivoire.
- • The results were from four holes at the Jagger Zone and returned multiple high grade gold intercepts and improved geological understanding.
- • The 2025 program will consist of between 20,000-30,000m of diamond drilling, the largest program on the project since initial discovery.
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