Daily BriefsMost Read

Most Read: Shinsei Bank, Demae-Can Co., Ltd., Ngern Tid Lor, Kerry Logistics Network and more

In today’s briefing:

  • Shinsei Looks To A Poison Pill, But Probably Not Really
  • Demae-Can’s Latest Offering Preserves The Potential for TOPIX Inclusion
  • SET50 Index Rebalance Preview: Two High Probability Changes, Could Be a Couple More
  • Demae-Can – Structurally Appalling but a Good Trade
  • Kerry Logistics (636 HK): Sell Here As Opposed To Tendering

Shinsei Looks To A Poison Pill, But Probably Not Really

By Travis Lundy

On Thursday 9 September, SBI Holdings (8473 JP) announced a Tender Offer aimed at lifting its stake in Shinsei Bank (8303 JP) to 48% at a sharp premium (up 46%). It hadn’t warned Shinsei Bank of its intention to do so.

Kana Inagaki and Leo Lewis at the FT had a story early Thursday evening describing the situation – the most concise and accurate take I have seen. I followed up hours later with something wordier in SBI (8473) Launches a HOSTILE Tender Offer on Shinsei Bank (8303)! On Thursday night the ADRs rose to ¥1930/share equivalent. 

On Friday, the stock went limit up, Smartkarma held a Flash Webinar, and Mio Kato added Shinsei Bank – Valuations to the anthology. 

Over the weekend, articles were everywhere in the media, but they didn’t say much. Shinsei hadn’t told them what to say and SBI had already done the talking for its part. 

Trading resumed on Monday and the stock opened above the Tender Offer Price ¥2000/share before closing a bit lower. 

Yesterday saw articles suggesting Shinsei Bank would send SBI a list of questions to answer, would look at what they got back, and then would decide their opinion. 

But TODAY we see the real start of the game. 

The Nikkei reported in a short article a few hours ago that Shinsei’s board would meet this week to approve an “emergency” poison pill defence. 

How that would work might matter, but it might not. 

More below the fold.


Demae-Can’s Latest Offering Preserves The Potential for TOPIX Inclusion

By Janaghan Jeyakumar, CFA

Japan-based food delivery company Demae-Can Co., Ltd. (2484 JP) launched a follow-on equity offering after market-close today to raise capital for business expansion. 

In this offering the company will be issuing 55,436,400 new shares and selling 3,240,000 treasury shares out of which a total of 19,293,900 shares will be allocated to the public and 39,382,500 shares will be allocated for Z Holdings (4689 JP) and South-Korea based Naver Corp (035420 KS). Based on today’s closing price, the total size of this equity offering could be around ~¥105bn (US$950mn) and the portion allocated to public shareholders could be around ~¥35bn (US$315mn). However, the official announcement estimates the minimum size of the equity offering to be around ~¥80bn (US$726mn) and the above-mentioned allocation can change slightly depending on share price movement and public investor interest. 

There is a really interesting event angle here which should pique the interest of investors. 

More below.


SET50 Index Rebalance Preview: Two High Probability Changes, Could Be a Couple More

By Brian Freitas

The Stock Exchange of Thailand (SET) will announce the results of the semi-annual review of the Stock Exchange of Thailand SET 50 Index (SET50 INDEX) in mid-December and the changes will be effective after the close of trading on 30 December.

The review period for market cap calculations runs from 1 September to 30 November, while the liquidity calculations run from 1 December 2020 to 30 November 2021.

We see three potential changes at the current time with an estimated one-way turnover for the rebalance at 1.40%.

Potential inclusions are Ngern Tid Lor (TIDLOR TB) and Banpu Public (BANPU TB) while the potential deletions are Sri Trang Agro Industry (STA TB) and Ratch Group PCL (RATCH TB).

The SET has multiple levers that it can use to determine the stocks to be included and excluded. At the current time, Delta Electronics Thai (DELTA TB) and Berli Jucker (BJC TB) are very close to failing the monthly turnover test. If the stocks are deleted from the index, the corresponding inclusions are TOA Paint (Thailand) (TOA TB) and Kerry Express Thailand (KEX TB).


Demae-Can – Structurally Appalling but a Good Trade

By Mio Kato

Demae-Can once offered a sound business model in a niche for Japan and generated consistent double-digit growth with mid-teens margins, making it a relatively attractive stock for Japan. Since its push into the delivery business though, margins have collapsed, and cash-burn has reached Wework-ian proportions. Nevertheless, on a short-term basis, this could prove attractive.


Kerry Logistics (636 HK): Sell Here As Opposed To Tendering

By David Blennerhassett

The Partial Offer for Kerry Logistics Network (636 HK), announced on the 9 February, closes on the 16 September.

The record date for the interim dividend (HK$0.211/share) was the 13 September. The record date for the special dividend (HK$7.28/share) is the 15 September.

Shares are now trading ex- both dividends.

You can still tender into the Offer – but not buy and tender.

If you tender, you still receive the special dividend.

But if you intend to tender into the Offer, with a minimum pro-ration of 76.02%, you should simply sell in the market here at HK$18.60 and get 100% filled.

More below the fold.


Before it’s here, it’s on Smartkarma