In today’s briefing:
- Horizon Robotics (9660 HK): Index Inclusion & Upweights to Drive US$1bn Inflows
- Dian Swastatika Sentosa (DSSA IJ): Surprise, Surprise!
- Dentsu Group (4324 JP): Global Index Deletion Likely
- [Japan M&A] ¥4,870/Sh Blackstone TOB for Technopro (6028 JP) – Watch the Parameters and Modalities
- [Japan M&A] Furukawa Battery (6937 JP) Take Private – Ugly Then, Ugly Still, But Now It’s On…
- JPX Nikkei 400 Index Rebalance: US$6.4bn Round-Trip Trade Coming Up
- [Quiddity Index] S&P500/400/600 Sep25 Rebal: Two Possible Changes, But One Iffy
- Tender Offer and Delisting of Kolon Mobility Group by Kolon Corp
- Iress (IRE AU): Nothing Firm As Blackstone And Thoma Bravo Circle
- PointsBet (PBH AU): Mixi Bumps and Declares Offer Unconditional
Horizon Robotics (9660 HK): Index Inclusion & Upweights to Drive US$1bn Inflows
- There should be big passive inflows to Horizon Robotics (9660 HK) over the next 6 weeks and that could take the stock higher in the short term.
- Southbound Stock Connect investors have bought more than 10% of the Class B shares outstanding since the stock was added to the link a couple of months ago.
- Short interest jumped following the Stock Connect inclusion but there has been covering over the last few weeks. Short-term direction for the stock price looks to be higher.
Dian Swastatika Sentosa (DSSA IJ): Surprise, Surprise!
- Dian Swastatika Sentosa (DSSA IJ) will be added to a global index in August and that should come as a surprise to most of the market.
- The stock is up 10x over the last 18 months and liquidity has shown a marked improvement in the last year.
- Dian Swastatika Sentosa (DSSA IJ) trades at nosebleed valuations and there is the risk of a sell off following index inclusion.
Dentsu Group (4324 JP): Global Index Deletion Likely
- The drop in Dentsu Inc (4324 JP)‘s stock price over the last few months could lead to the deletion of the stock from a global index in August.
- Dentsu Inc (4324 JP) has underperformed its peers over the last year and trades cheaper than the average of its Advertising peers.
- There is positioning in Dentsu Inc (4324 JP), though it is likely to be smaller than the estimated passive selling. A relative selloff could be used to enter the stock.
[Japan M&A] ¥4,870/Sh Blackstone TOB for Technopro (6028 JP) – Watch the Parameters and Modalities
- This was signaled in May, somewhat confirmed in July, now done. Blackstone buys Technopro at ¥4,870/share which is ~14x EV/EBITDA for next year.
- PE Firms have been scouring the Japanese market to buy companies. The METI Corporate Takeover Guidelines are super-helpful in that regard. This will squeeze the market over time.
- This takeover price is not quite as full as it could have been, and there are some parameters and modalities to this which are worth looking at. Parameters and Modalities.
[Japan M&A] Furukawa Battery (6937 JP) Take Private – Ugly Then, Ugly Still, But Now It’s On…
- 54 weeks ago Advantage Partners and Furukawa Electric announced a deal to take Furukawa Electric (5801 JP) sub Furukawa Battery (6937 JP) private. The acquisition price was LOW.
- Minorities got more – more than book. But the deal included a payment delay allowing BVPS to rise 8.8% from the announcement date. No synergies.
- Furukawa Electric gets to buy back in at a price below book. And because there are cash and securities and lots of net receivables, the operating assets are well below.
JPX Nikkei 400 Index Rebalance: US$6.4bn Round-Trip Trade Coming Up
- There are 39 adds/34 deletes for the JPX Nikkei 400 Index to bring the number of index constituents back to 400. There are stocks with multiple days ADV to trade.
- Based on the adds, deletes and capping changes, we estimate one way turnover of 6.7% and a round-trip trade of JPY 946bn (US$6.4bn).
- The adds have outperformed the deletes over the last year and there has been a move higher in the last few days too.
[Quiddity Index] S&P500/400/600 Sep25 Rebal: Two Possible Changes, But One Iffy
- The S&P 500 index tracks the 500 largest names listed in the US and it is one of the most highly-tracked indices in the world.
- In this insight, we take a look at the upcoming constituent changes in the run up to the September 2025 index rebal event.
- We expect two regular changes in September 2025 – maybe $10bn a side. There are also a couple of live M&A events which are likely to trigger intra-review index changes.
Tender Offer and Delisting of Kolon Mobility Group by Kolon Corp
- Kolon Corp (002020 KS) announced that it is conducting a tender offer and delisting of Kolon Mobility Group (450140 KS).
- The tender offer prices are 4,000 won per common share (20.3% higher than current price) and 5,950 won per preferred share (25.3% higher than current price) for Kolon Mobility Group.
- The tender offer prices and stock swap ratios are especially attractive for Kolon Mobility Group shareholders.
Iress (IRE AU): Nothing Firm As Blackstone And Thoma Bravo Circle
- Back in 2021, Swedish PE outfit EQT and Iress Ltd (IRE AU) were unable to firm a transaction. This was discussed in Iress (IRE AU) Accepts EQT’s Latest Proposal.
- EQT was granted due diligence after bumping indictive terms to $15.91/share, up from an initial pitch of A$14.80/share. Its been crickets since EQT walked.
- Now Blackstone has approached Iress, a trading and wealth management software provider. An indicative A$10.50/share cash Offer was tabled, but since withdrawn. Negotiations with Blackstone and Thoma Bravo are ongoing.
PointsBet (PBH AU): Mixi Bumps and Declares Offer Unconditional
- After betr Entertainment (BBT AU) bumped scrip terms for PointsBet (PBH AU), a logical course of action for Mixi (2121 JP) was to declare its Offer unconditional.
- Now Mixi has bumped terms to A$1.25/share, from A$1.20/share; and declared its Offer unconditional. FIRB gave its nod on the 5th August.
- Mixi has 28.2% of shares out, including 1.93% in the acceptance facility. “MIXI reserves the right to increase the offer price if it acquires more than 50% of PointsBet shares“.
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