In today’s briefing:
- Terumo (4543 JP) Secondary Offering – Smaller Than It Looks
- Terumo Placement – US$1.4bn Secondary Selldown, Buyback Should Aid Deal Dynamics
- Terumo (4543 JP): A US$1.4 Billion Secondary Offering
- Arvida (ARV NZ): 25th Sept Vote On Stonepeak’s Offer
- Arvida Group (ARV NZ): Scheme Vote on 25 September
- ORMP: Balance Sheet Strong, Potential Benefits of Investments, JVs, Buybacks
- Pre-IPO BrainAurora Medical Technology (PHIP Updates) – Some Points Worth the Attention
Terumo (4543 JP) Secondary Offering – Smaller Than It Looks
- On Thursday 29 August, Terumo Corp (4543 JP) announced a secondary offering where 7 major cross-holders would sell just under 5% of the shares outstanding to international investors.
- In recent quarters, Terumo has seen better consensus EPS growth than Peers in recent quarters, and Peers have underperformed. Right now, Terumo isn’t ‘cheap’ but consensus growth is strong.
- This back-end demand in this case has enough moving parts that it bears a closer look.
Terumo Placement – US$1.4bn Secondary Selldown, Buyback Should Aid Deal Dynamics
- A group of shareholders are looking to raise around US$1.36bn from selling ~5% stake in Terumo Corp (4543 JP).
- While the deal shouldn’t come as a surprise, given the ongoing cross-shareholding unwind narrative in Japan, the timing of such a selldown isn’t always certain.
- In this note, we will talk about the placement and run the deal through our ECM framework.
Terumo (4543 JP): A US$1.4 Billion Secondary Offering
- Terumo Corp (4543 JP) has announced a secondary offering of up to 73.2 million shares, worth JPY203 billion (US$1.4 billion) at the last close.
- The secondary offering facilitates the exit of large shareholders. Terumo also announced a buyback worth a maximum of JPY30 billion or 15 million shares.
- Looking at recent large Japanese placements is instructive for understanding the potential offer price. The pricing date will fall between 10 and 12 September (likely 10 September).
Arvida (ARV NZ): 25th Sept Vote On Stonepeak’s Offer
- Back on the 22 July, Arvida (ARV NZ), a leading retirement living and aged care provider, announced a Scheme from Stonepeak at NZ$1.70/share, in cash, a 65% premium to undisturbed.
- The Scheme Booklet is now out, with a Scheme Meeting to be held on the 25th September. Expected implementation on the 13th November.
- The Scheme Consideration of NZ$1.70/share is within the Independent Adviser’s valuation range at NZ$1.63 to NZ$1.94/share. Arvida’s directors unanimously recommend shareholders to vote in favour of the Scheme.
Arvida Group (ARV NZ): Scheme Vote on 25 September
- The Arvida (ARV NZ) IE considers Stonepeak’s NZ$1.70 offer fair and reasonable as it is within the NZ$1.63 to A$1.94 valuation range.
- The transaction will require OIO approval, statutory supervisors’ consent and shareholder approval. The Metlifecare Ltd (MET NZ) precedent suggests that the OIO and statutory supervisor should be forthcoming.
- The offer is attractive and recent changes in substantial shareholders are benign. At the last close and for the 13 November payment, the gross/annualised spread was 3.0%/15.2%.
ORMP: Balance Sheet Strong, Potential Benefits of Investments, JVs, Buybacks
- The company’s discussions with the FDA progress as ORMP plans to launch a Phase 3 oral insulin trial in the U.S. under a differentiated protocol aligned with the positive data from specific patient subgroups in a prior Phase 3 study of ORMD 0801.
- ORMP hopes to leverage its analysis of the patient subgroups’ responses in order to fine-tune its development efforts under a revised protocol to advance its oral insulin therapy in diabetes management.
- ORMP is also continuing discussions with Hefei Tianhui Biotech Co., Ltd. (HTIT) regarding their strategic JV to leverage their respective strengths and combined capabilities and technologies.
Pre-IPO BrainAurora Medical Technology (PHIP Updates) – Some Points Worth the Attention
- If the System or this treatment method is really effective and accepted by hospitals/doctors, under the coverage of medical insurance catalog already, why BrainAurora’s revenue scale is still so small?
- CSRC questioned BrainAurora’s high selling expenses. Since either SG&A or R&D expenses already exceed revenue, BrainAurora would continue to suffer from losses. The Company hasn’t established a solid profit model.
- BrainAurora completed a total of 7 rounds of financing, with a post investment valuation of RMB2.7 billion. However, it is difficult for BrainAurora to match this high valuation after IPO.
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