In today’s briefing:
- MSCI Nov 2022 SAIR: In-Line; Plus a Few Surprises
- Axis Bank Placement – Second Deal for the Month but This Is Very Well Flagged
- Why the FTX Collapse Is a Big Deal
- Perpetual (PPT AU) Rejects a Revised A$33 Offer; Pendal (PDL AU) Deal Looks Toast
- Uzabase’s (3966 JP) JPY1,500 Tender Offer from Carlyle
- Mitsubishi Estate (8802) – Buyback Announced and Long-Term It’s a Soft Squeeze.
MSCI Nov 2022 SAIR: In-Line; Plus a Few Surprises
- MSCI announced the changes as part of the November SAIR. For Asia Pacific, there are 48 adds and 55 deletes (including one nationality change).
- The deletion of Wharf Holdings (4 HK) is the biggest surprise. The stock should trade weak given the large flow and days of ADV to sell.
- There are listing changes for BeiGene (BGNE US), Li Auto (LI US), Xpeng (XPEV US) and Hutchison China MediTech Ltd (HCM US) to their Hong Kong listed lines.
Axis Bank Placement – Second Deal for the Month but This Is Very Well Flagged
- The Government of India (GoI) aims to raise around US$500m via selling a 1.4% stake in Axis Bank Ltd (AXSB IN).
- This won’t be the first selldown by GoI as it has been reducing its stake since 2019. We have covered a number of the past deals in the name.
- In this note, we will run the deal through our ECM framework and comment on other deal dynamics.
Why the FTX Collapse Is a Big Deal
- FTX is one of the largest crypto exchanges in the world in terms of market capitalization – at one point it was second only to Binance. It is one of the biggest collapses the crypto ecosystem has seen
- FTX has a suite of big-name investors – including Temasek, SoftBank, Sequoia Capital, and BlackRock – that have poured US$1.8 billion into the exchange.
- FTX was the white knight that prevented its fellow crypto firms from dying. It was a savior who helped to stabilize the market.
Perpetual (PPT AU) Rejects a Revised A$33 Offer; Pendal (PDL AU) Deal Looks Toast
- Perpetual Ltd (PPT AU) has rejected a revised non-binding indicative proposal from Regal/BPEA EQT at A$33.00 per share, a 10% premium to the previously rejected offer of A$30.00 per share.
- While the Regal Partners (RPL AU)/BPEA EQT revised offer is not quite a knockout bid, it is good enough to warrant the requested short due diligence period.
- The PPT/Pendal Group (PDL AU) deal is seemingly dead. The A$23 million break fee is more than compensated by the A$172 million value uplift between Regal/BPEA EQT’s two proposals.
Uzabase’s (3966 JP) JPY1,500 Tender Offer from Carlyle
- Uzabase Inc (3966 JP) has recommended Carlyle Group Inc (CG US)’s tender offer of JPY1,500 per share, a 72.2% premium to the undisturbed price (9 November).
- The transaction is a two-step acquisition through a cash tender offer and subsequent squeeze-out. The lower limit of the offer has been set to meet the 66.67% ownership ratio.
- The offer is reasonable. The offer ends on 22 December. Tendering shares represent a 27.94% ownership ratio. At the last close, the gross spread to the offer is 46.9%.
Mitsubishi Estate (8802) – Buyback Announced and Long-Term It’s a Soft Squeeze.
- Mitsubishi Estate (8802 JP) reported Q2 earnings today. Domestic revenue and OP in the commercial property and residential businesses were down. International and investment management businesses were up A LOT.
- Most of the gains in international business were capital gains, but overall, H1 results were in line with full-year guidance. Condo deliveries are completely in H2.
- The company also decided on a ¥100bn buyback. Headline says up to 70mm shares or 5.29% of shares out ex-Treasury. It’ll be 20+ smaller. Details, however, matter.
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