Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Event-Driven

<ul>
<li>Our overall assessment of the new reorganization plan by the Doosan Group continues to be Negative, because Doosan has not given up trying to eventually merge Bobcat and Robotics.</li>
<li>Doosan Group's new reorganization plan is the opposite of KISS strategy, involving several moving parts and complicated deal structure.</li>
<li>We have also provided three main recommendations on how to raise the valuation of Doosan Bobcat without rushing to merge Bobcat and Robotics.</li>
</ul>


Our overall assessment of the new reorganization plan by the Doosan Group continues to be Negative, because Doosan has not given up trying to eventually merge Bobcat and Robotics.
Doosan Group's new reorganization plan is the opposite of KISS strategy, involving several moving parts and complicated deal structure.
We have also provided three main recommendations on how to raise the valuation of Doosan Bobcat without rushing to merge Bobcat and Robotics.


New Reorganization Plan Increases Overhang Risk for Doosan Bobcat

<ul>
<li>On 18 October, a local activist fund Align Partners Asset Management started its "corporate activism" on Doosan Bobcat Inc (241560 KS).</li>
<li>Align Partners sent a shareholder proposal letter requesting a significant increase in the shareholder return rate, including dividends and selling off non-core assets. </li>
<li>We believe that Align Partners' corporate activism on Doosan Bobcat is likely to have a positive impact on Doosan Bobcat's share price.</li>
</ul>


On 18 October, a local activist fund Align Partners Asset Management started its "corporate activism" on Doosan Bobcat Inc (241560 KS).
Align Partners sent a shareholder proposal letter requesting a significant increase in the shareholder return rate, including dividends and selling off non-core assets. 
We believe that Align Partners' corporate activism on Doosan Bobcat is likely to have a positive impact on Doosan Bobcat's share price.


Align Partners Goes Activist on Doosan Bobcat

<ul>
<li>On 6 August, the Doosan Group announced a revised merger report. Despite some changes in the merger report, there was no change the merger ratios. </li>
<li>Many minority shareholders of Doosan Enerbility and Doosan Bobcat are likely to oppose this merger. The net result is an increasing probability that this merger gets cancelled, in our view.</li>
<li>Doosan Enerbility has set aside about 600 billion won for exercise of appraisal rights and if it exceeds this amount, the merger may be cancelled. </li>
</ul>


On 6 August, the Doosan Group announced a revised merger report. Despite some changes in the merger report, there was no change the merger ratios. 
Many minority shareholders of Doosan Enerbility and Doosan Bobcat are likely to oppose this merger. The net result is an increasing probability that this merger gets cancelled, in our view.
Doosan Enerbility has set aside about 600 billion won for exercise of appraisal rights and if it exceeds this amount, the merger may be cancelled. 


Doosan Group Revises Merger Report and Increasing Probability of Merger Getting Cancelled

Korea / Special Situations, Clepsydra Capital

Sanghyun Park

Korea / Special Situations

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

<ul>
<li>FSS Governor Lee challenged the legality of the Robotics-Bobcat merger ratio, citing Article 176-5 of the Capital Markets Act, allowing a 10% premium or discount.</li>
<li>Following the FSS Governor's statements, Doosan must likely apply a 10% premium/discount to the Robotics-Bobcat merger, creating a 30% spread based on current stock prices.</li>
<li>Doosan may still revise or cancel the merger, but the FSS Governor's comments might boost Bobcat short-term. Given the uncertainty, aggressive trading is risky.</li>
</ul>


FSS Governor Lee challenged the legality of the Robotics-Bobcat merger ratio, citing Article 176-5 of the Capital Markets Act, allowing a 10% premium or discount.
Following the FSS Governor's statements, Doosan must likely apply a 10% premium/discount to the Robotics-Bobcat merger, creating a 30% spread based on current stock prices.
Doosan may still revise or cancel the merger, but the FSS Governor's comments might boost Bobcat short-term. Given the uncertainty, aggressive trading is risky.


Korea FSS Chief Calls for 10% Premium/Discount on Doosan Merger, Boosting Swap Spread to 30%

Korea Stock Exchange Kospi Index / Event-Driven

<ul>
<li>KRX's lack of a standardized English translation platform may lead to non-standardized terminology and varying translation quality. KRX stresses cross-checking Korean and English disclosures due to potential errors. </li>
<li>The 3-day lag between Korean and English disclosures poses timeliness challenges, requiring consistent cross-checking. Overall, the process for foreign investors using Korean market disclosure sites remains largely unchanged.</li>
<li>The common procedure should still be to first check disclosures using English titles, then convert to Korean for reading. If English disclosures exist, utilize them for cross-checking.</li>
</ul>


KRX's lack of a standardized English translation platform may lead to non-standardized terminology and varying translation quality. KRX stresses cross-checking Korean and English disclosures due to potential errors. 
The 3-day lag between Korean and English disclosures poses timeliness challenges, requiring consistent cross-checking. Overall, the process for foreign investors using Korean market disclosure sites remains largely unchanged.
The common procedure should still be to first check disclosures using English titles, then convert to Korean for reading. If English disclosures exist, utilize them for cross-checking.


KRX's Mandatory English Disclosure Debut: A Detailed Guide on Utilizing This Without Confusion

South Korea

Bobcat Company specializes in design, manufacture, marketing and distribution of compact equipment for construction, rental, landscaping, agriculture, grounds maintenance, government, utility, industry and mining.

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Doosan Bobcat Inc (241560 KS)

New Reorganization Plan Increases Overhang Risk for Doosan Bobcat

Doosan Group's new reorganization plan is the opposite of KISS strategy, involving several moving parts and complicated deal structure.

Douglas Kim

Align Partners Goes Activist on Doosan Bobcat

On 18 October, a local activist fund Align Partners Asset Management started its "corporate activism" on Doosan Bobcat Inc (241560 KS).

Douglas Kim

Doosan Group Revises Merger Report and Increasing Probability of Merger Getting Cancelled

Lee Bok-Hyun (FSS head) stated today that "In reality, the market prices [of Doosan Bobcat and Doosan Robotics] may not properly reflect their fair...

Douglas Kim

Korea FSS Chief Calls for 10% Premium/Discount on Doosan Merger, Boosting Swap Spread to 30%

The FSS Governor made a shocking statement on TV today, saying that a 10% premium and discount should be applied to the Doosan merger ratio. This...

Sanghyun Park

KRX's Mandatory English Disclosure Debut: A Detailed Guide on Utilizing This Without Confusion

This post is a comprehensive guide on utilizing KRX's inaugural mandatory English disclosures without confusion, which began today.

Sanghyun Park

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