In today’s briefing:
- Taiwan’s Yageo (2327 TT) Announces Hostile Tender on Shibaura Electronics (6957 JP) – I Have 🍿🍿
- STAR50/STAR100 Index Rebalance Preview: One Is Meh; The Other Is👍
- Hexaware Technologies IPO: Delisted in 2020; Now Looking to Raise US$1bn
- TOPIX Inclusions: Who Is Ready (Feb 2025)
- WellNeo Sugar (2117) To Buy Toyo Sugar (2107) – Too Cheap, No Synergies Paid, but Too Small
- Yamaha Corp (7951) BIG Buyback May Be Followed By More Later
- StubWorld: WH Group (288 HK) IPOs Smithfield (SFD US). Now What?
- Quiddity Leaderboard NIFTY Mar 25: Final Expectations; Expected DELs Could Underperform Index
- A Partial Tender Offer of Englewood Lab by Cosmecca Korea
- Making a Call on when Samsung’s Financial Arms Will Drop Their Value-Up Announcements
Taiwan’s Yageo (2327 TT) Announces Hostile Tender on Shibaura Electronics (6957 JP) – I Have 🍿🍿
- Today, Taiwanese passive components maker Yageo Corporation (2327 TT) announced its Board had approved the launching of a Tender on Shibaura Electronics (6957 JP).
- It turns out YAGEO approached them in October, Shibaura stonewalled for 3mos, required an NDA to meet, and refused to budge. METI Corporate Takeover Guidelines were likely ignored.
- This could set off a flurry of activity including competition, an auction, promises of dividends, and who knows what. It will be exciting but it’s not C&F.
STAR50/STAR100 Index Rebalance Preview: One Is Meh; The Other Is👍
- With the review period complete, we forecast 3 changes for the SSE STAR50 (STAR50 INDEX) and 8 changes for the STAR100 Index. There are a few migrations between the indices.
- We estimate turnover of 3.8% for the SSE STAR50 (STAR50 INDEX) and 9.9% for the STAR100 Index. The estimated net round-trip trade is CNY 13bn (US$1.8bn).
- The forecast adds to the STAR50 INDEX have underperformed the forecast deletes. For the STAR100 Index outright changes, the forecast adds have outperformed the forecast deletes by a lot.
Hexaware Technologies IPO: Delisted in 2020; Now Looking to Raise US$1bn
- In November 2020, HT Global IT Solutions acquired all the shares it did not own in Hexaware Technologies (HEXW IN) and delisted the stock from the NSE and BSE.
- Now, Carlyle Group is looking to raise INR 87.5bn by selling stock at a price range of INR 674-708/share, valuing Hexaware Technologies (HEXW IN) at US$4.8bn.
- The stock will not get Fast Entry to global indices. Inclusion at regular rebalances should take place in May and September, though the impact will be limited.
TOPIX Inclusions: Who Is Ready (Feb 2025)
- Quiddity’s “Who is Ready” series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.
- Japan Eyewear Holdings (5889 JP) and Core Concept Technologies Inc (4371 JP) continue to be in our watchlist of pre-event candidates for TOPIX Inclusions.
- Separately, the TOPIX Liquidity factor removal event will take place in April 2025 and there could be some positive index flows for Tokyo Metro (9023 JP) during this event.
WellNeo Sugar (2117) To Buy Toyo Sugar (2107) – Too Cheap, No Synergies Paid, but Too Small
- WellNeo Sugar (2117) today announced a deal to buy Toyo Sugar Refining (2107 JP) at a 27% premium. This is a small ¥11bn deal where insiders own 45%.
- Normally I wouldn’t even talk about a deal this small but this one has something going for it. Two things actually.
- And readers will have to read all the way down to the conclusions to find out the key one, but the setup is that it is too cheap.
Yamaha Corp (7951) BIG Buyback May Be Followed By More Later
- Yesterday, Yamaha Corp (7951 JP) announced Q3 earnings (results, presentation, metrics), a change in full-year guidance (revs unch’d, OP -10.8%, NP -25%), and a large buyback.
- 9M Revenue up yoy but China sales slower OP up yoy (audio business, SG&A cuts), but FY revised lower due to restructuring (impairment, retirement expenses). Looks worse than it is.
- The buyback is interesting, and large. And investors should be aware of the modalities.
StubWorld: WH Group (288 HK) IPOs Smithfield (SFD US). Now What?
- After reducing the IPO price, and the placement size, WH Group (288 HK) has now completed the spin-off of Smithfield Foods (SFD US).
- Preceding my comments on the WH Group are the current setup/unwind tables for Asia-Pacific Holdcos.
- These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.
Quiddity Leaderboard NIFTY Mar 25: Final Expectations; Expected DELs Could Underperform Index
- NIFTY 50 represents the 50 largest stocks listed in the National Stock Exchange (NSE) of India and the NIFTY Next 50 index tracks the next 50 largest names.
- In this insight, we are presenting our final expectations for ADDs and DELs for the March 2025 index rebal event.
- We see two changes for NIFTY 50 and four changes for NIFTY 100. We expect the results to be announced in the next few days.
A Partial Tender Offer of Englewood Lab by Cosmecca Korea
- On 6 February, Cosmecca Korea (241710 KS) launched a partial tender offer on Englewood Lab (950140 KS).
- Cosmecca Korea announced that it plans to purchase 11% (2.185 million) of Englewood Lab’s outstanding shares at the tender offer price of 10,000 won.
- It appears that this partial tender offer is an attempt by Cosmecca Korea to increase its stake in Englewood Lab even further, capitalizing on the lower share price.
Making a Call on when Samsung’s Financial Arms Will Drop Their Value-Up Announcements
- Samsung Life’s value-up disclosure: we should expect it with Q4 earnings on the 20th—every local desk and media outlet is eyeing that date.
- Unlike Samsung Life, Samsung Securities is tight-lipped. Earnings are set for Feb 14, but expect the value-up announcement after Feb 20, likely before early March and AGM season.
- Tomorrow’s unlikely for Samsung Card’s value-up disclosure. It’s holding off until the card fee recalculation is finalized—likely after February or before mid-March, ahead of AGM season.
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