A large retracement
Investors are less optimistic about the Korea Corporate Value-up program: (more…)
Corporate Value-up
The Financial Services Commission (FSC) in Korea recently released the “Corporate Value-up Program”. Some highlights: (more…)
Where we stand
We present an update of the value vs. growth draw-down chart featured in past newsletters. (more…)
Naming and shaming
November brought seven management buyout (MBO) announcements in Japan – the most in twelve years (figure 1). We last wrote about Japanese tender offers (including MBOs) in our January newsletter (Vigilance is Required, 3 February 2023). At the time, we identified two medium-term catalysts behind the trend:
Stock delisting in India
SEBI announced a consultation to improve the stock delisting framework.
SEBI’s main proposal would allow any company to be delisted via a fixed price tender offer, contingent upon 90% acceptance by all shareholders. This would be a great improvement on the current system of reverse book-building, which allows shareholders with small stakes to hold a transaction hostage by driving up the tender price to unreasonable levels, frequently resulting in the offeror walking away.
Of particular interest to us was an additional proposal specifically aimed at holding companies – defined by SEBI as those with at least 75% of assets in the form of stakes in other companies.
Assuming two-thirds approval from public (nonpromoter) shareholders, holding companies would be able to delist through a scheme of arrangement whereby the holding company’s shares are cancelled in exchange for shares in the underlying listed holdings, with unlisted shares sold for cash which is then paid out.
The relatively low voting threshold would make it significantly easier to unlock the value contained in some of the deeply-discounted Indian holding companies, in our view.