In today’s briefing:
- NEC Networks (1973 JP) Next To Last Showdown – NEC Lowers Minimum, Bumps Tiny, Ignores Synergies
- ECM Weekly (22nd Dec 2024) – LG CNS, Kioxia, Vishal Mega, IGI, Sai Life, Ventive, Paras
- Japan: Potential Passive Selling in February
- Merger Arb Mondays (23 Dec) – Seven & I, Fuji Soft, NEC Networks, Pentamaster, Goldlion, Henlius
- Unloved Japan Roundup-Rohm, Taiyo Yuden, Kose
NEC Networks (1973 JP) Next To Last Showdown – NEC Lowers Minimum, Bumps Tiny, Ignores Synergies
- On Friday, NEC Corp (6701 JP) raised the price for its Tender Offer on Nec Networks & System Integr (1973 JP) from ¥3,250 to ¥3,300.
- It also lowered the minimum to 10.153mm shares (6.82%). It had proposed to do so earlier but NESIC demanded a bump, and NEC didn’t want to.
- Now it’s bumped. That’s the “final price.” But it still does not include “a fair allocation of a portion of the value that cannot be realised without an acquisition.”
ECM Weekly (22nd Dec 2024) – LG CNS, Kioxia, Vishal Mega, IGI, Sai Life, Ventive, Paras
- Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
- On the IPO front, all of the India listings managed to do well, while Kioxia Holdings (285A JP) managed to provide steady returns as well.
- On the placements front, there were only a few deals in India, led by Mankind Pharma.
Japan: Potential Passive Selling in February
- Currently, 9 stocks could be deleted from global passive portfolios in February. The deletion will lead to liquidity events where trackers will need to sell multiple days of ADV.
- There has been a buildup on shorts on few stocks with minimal positioning in the other stocks. That could change once the calendar ticks over to 2025.
- Kokusai Electric (6525 JP) is a potential inclusion to the Nikkei 225 (NKY INDEX) in March and this deletion could provide liquidity to enter a position ahead of that announcement.
Merger Arb Mondays (23 Dec) – Seven & I, Fuji Soft, NEC Networks, Pentamaster, Goldlion, Henlius
- We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
- Highest spreads: Arcadium Lithium (LTM AU), Seven & I Holdings (3382 JP), Get Nice Financial Group Ltd (1469 HK), ESR Group (1821 HK), Goldlion Holdings (533 HK).
- Lowest spreads: Lifestyle China (2136 HK), Renewable Japan (9522 JP), Macromill, Inc (3978 JP), Fuji Soft Inc (9749 JP), Nec Networks & System Integr (1973 JP).
Unloved Japan Roundup-Rohm, Taiyo Yuden, Kose
- Solar power will be cheaper than fossil fuels and EVs will be cheaper than ICE vehicles, but you can’t make either without the parts that Rohme excels in.
- Tesla is up 201% on speculation about its FSD, but Taiyo Yuden, which makes critical parts in FSD systems is down systems, is down 43%.
- Kose is down 49%, largely on China woes, but China is no longer big enough to be a problem, and Japan and other regions growth should start to take over.
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