In today’s briefing:
- FTSE EPRA Nareit Developed Asia Preview: A Few More Inclusions
- The Citic Securities Rights Offering – Dilution Against Timing
- Sony – Microsoft’s Activision Blizzard Acquisition Shakes Things Up
- Hyundai Engineering IPO – Eco-Friendlier However Parent Has Traded Down Since Our Last Note
- HDN/AVN Merger & Potential ASX200 Inclusion in March (Or Earlier)
FTSE EPRA Nareit Developed Asia Preview: A Few More Inclusions
- The next FTSE EPRA Nareit Index review will use data from 21 February. The changes will be announced on 2 March and implemented at the close on 18 March.
- Potential inclusions at the review include Heiwa Real Estate, One REIT and ESR Kendall Square REIT while there is a possibility of Digital Core REIT (DCREIT SP) being included.
- Digital Core REIT (DCREIT SP) could be included if it publishes audited financial statements in the next week. Else inclusion could take place at the June rebalance.
The Citic Securities Rights Offering – Dilution Against Timing
- Citic Securities has launched a Rights Offering for H Shares and A Shares. The price is basically the same, which means a very big discount for A holders.
- The timing is different, and the H share Rights Issue process is drawn out past Chinese New Year. This may affect takeup rates and bullishness.
- The difference in capital approach between Dual H/A-share listed SOEs like Citic Securities and like China Mobile is stark. The dichotomy may expand.
Sony – Microsoft’s Activision Blizzard Acquisition Shakes Things Up
- Microsoft has agreed to acquire Activision Blizzard for $95 per share (+45.3% vs. undisturbed) which values the company at $68.7bn in EV.
- ATVI had been under pressure since the middle of last year facing various sexual harassment allegations, but CEO Bobby Kotick will not be replaced.
- Like with ZeniMax this deal features a demanding valuation for a number of IPs which have seen better days… but there is Call of Duty…
Hyundai Engineering IPO – Eco-Friendlier However Parent Has Traded Down Since Our Last Note
- Hyundai Engineering Co Ltd (HEC KS) is looking to raise up to US$1bn in its Korea IPO.
- There have been a number of news reports since our last note regarding the firm securing projects with an eco-friendly tilt, which could garner investor interest.
- Despite its recent share price correction, were HEC to list at our fair value estimate, were one to short the holdco, there exists a 2-12% return potential.
HDN/AVN Merger & Potential ASX200 Inclusion in March (Or Earlier)
- Aventus Group (AVN AU) securityholders vote on the proposed merger with HomeCo Daily Needs REIT (HDN AU)/ Home Consortium Ltd (HMC AU) on 25 January.
- If approved, Aventus Group (AVN AU) will stop trading after the close on 3 February and the shares in issue for HomeCo Daily Needs REIT (HDN AU) will increase substantially.
- That will make HDN AU the highest ranked non-ASX200 constituent and a high probability add for March. There could be an earlier inclusion to replace SYD AU in the index.
Before it’s here, it’s on Smartkarma
