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.

Event-Driven

<ul>
<li>The FSS requested Doosan Robotics to revise the prospectuses for both the Share Swap with Doosan Bobcat and Merger with Doosan Enerbility.</li>
<li>Although the FSS's wording seems aggressive, it does not request the cancellation. Authorities are displeased but lack political momentum to derail Doosan's restructuring.</li>
<li>The FSS asks Doosan to clarify merger synergies, warn of Robotics' overvalued stock price and potential decline, and highlight the collaborative robot market's growth risks.</li>
</ul>


The FSS requested Doosan Robotics to revise the prospectuses for both the Share Swap with Doosan Bobcat and Merger with Doosan Enerbility.
Although the FSS's wording seems aggressive, it does not request the cancellation. Authorities are displeased but lack political momentum to derail Doosan's restructuring.
The FSS asks Doosan to clarify merger synergies, warn of Robotics' overvalued stock price and potential decline, and highlight the collaborative robot market's growth risks.


Clarifications Regarding the FSS's Unexpected Revision Request for the Doosan Mergers

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

<ul>
<li>On 26 July, it was reported in the local media that there has been a major breach of duty by nearly 40 current/former employees at Doosan Bobcat.</li>
<li>The fact that this material breach of duty was not revealed prior to the merger announcement adds to the argument that this merger/split/delisting should be either cancelled or redone. </li>
<li>We remain negative on all major companies involved in this deal including Doosan Bobcat and Doosan Robotics. The breach of duty at Doosan Bobcat adds to the fire. </li>
</ul>


On 26 July, it was reported in the local media that there has been a major breach of duty by nearly 40 current/former employees at Doosan Bobcat.
The fact that this material breach of duty was not revealed prior to the merger announcement adds to the argument that this merger/split/delisting should be either cancelled or redone. 
We remain negative on all major companies involved in this deal including Doosan Bobcat and Doosan Robotics. The breach of duty at Doosan Bobcat adds to the fire. 


Doosan Bobcat Employees Involved In Major Breach of Duty + Doosan Group Pushes Ahead With Merger

<ul>
<li>On 24 July, the Financial Supervisory Service (FSS) ordered the Doosan Group to resubmit the merger plan. </li>
<li>It is rare for FSS to reject companies' merger reports but there has been an exception this time since this deal is egregiously negative to many minority investors.</li>
<li>Doosan Group needs to resubmit a revised merger plan within next three months. Otherwise, the securities report involving the merger plan of the Doosan Group companies will be considered withdrawn. </li>
</ul>


On 24 July, the Financial Supervisory Service (FSS) ordered the Doosan Group to resubmit the merger plan. 
It is rare for FSS to reject companies' merger reports but there has been an exception this time since this deal is egregiously negative to many minority investors.
Doosan Group needs to resubmit a revised merger plan within next three months. Otherwise, the securities report involving the merger plan of the Doosan Group companies will be considered withdrawn. 


FSS Orders Doosan Group to Resubmit the Merger Plan - "Merger Plan Is Not Illegal, But Is It Fair?"

<ul>
<li>During Kim Byung-hwan's hearing, he acknowledged market concerns about the Doosan merger, increasing skepticism about Doosan's ability to maintain the original merger ratio.</li>
<li>Calculating Bobcat's net asset value using the net asset value method yields approximately ₩6.1T, derived from ₩5.95T in year-end equity plus ₩0.13T in adjustments.</li>
<li>Reassess arb trading opportunities; with no short hedge for Robotics, consider an outright long position in Bobcat if its swap price is revised and the spread widens.</li>
</ul>


During Kim Byung-hwan's hearing, he acknowledged market concerns about the Doosan merger, increasing skepticism about Doosan's ability to maintain the original merger ratio.
Calculating Bobcat's net asset value using the net asset value method yields approximately ₩6.1T, derived from ₩5.95T in year-end equity plus ₩0.13T in adjustments.
Reassess arb trading opportunities; with no short hedge for Robotics, consider an outright long position in Bobcat if its swap price is revised and the spread widens.


Robotics+Bobcat Merger: Merger Ratio Revision Possibility & Arb Spread Recalculations

<ul>
<li>On 11 July, the Doosan Group announced a major business structure reorganization, including the delisting of Doosan Bobcat Inc (241560 KS).</li>
<li>In our view (over the next 3-6 months), these transactions appear to be value-destroying for Doosan Bobcat and Doosan Enerbility minority shareholders but positive for Doosan Robotics shareholders.</li>
<li>Doosan Robotics plans to acquire the remaining 54% stake in Doosan Bobcat through a tender offer. Once Doosan Robotics fully owns Doosan Bobcat, its shares will be delisted.</li>
</ul>


On 11 July, the Doosan Group announced a major business structure reorganization, including the delisting of Doosan Bobcat Inc (241560 KS).
In our view (over the next 3-6 months), these transactions appear to be value-destroying for Doosan Bobcat and Doosan Enerbility minority shareholders but positive for Doosan Robotics shareholders.
Doosan Robotics plans to acquire the remaining 54% stake in Doosan Bobcat through a tender offer. Once Doosan Robotics fully owns Doosan Bobcat, its shares will be delisted.


Reorganization of the Doosan Group: Why Delist Doosan Bobcat (Jewel of Doosan Group)?

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)

Clarifications Regarding the FSS's Unexpected Revision Request for the Doosan Mergers

Doosan submitted the revised securities registration statement for its restructuring. As suggested in this post, the merger ratio remains...

Sanghyun Park

Doosan Bobcat Employees Involved In Major Breach of Duty + Doosan Group Pushes Ahead With Merger

On 26 July, it was reported in the local media that there has been a major breach of duty by nearly 40 current/former employees at Doosan Bobcat.

Douglas Kim

FSS Orders Doosan Group to Resubmit the Merger Plan - "Merger Plan Is Not Illegal, But Is It Fair?"

Doosan Group needs to resubmit a revised merger plan within next three months. Otherwise, the securities report involving the merger plan of the...

Douglas Kim

Robotics+Bobcat Merger: Merger Ratio Revision Possibility & Arb Spread Recalculations

On July 11, Bobcat announced an EGM on September 25 to address the merger approval and capital reduction. Initially, details about the capital...

Sanghyun Park

Reorganization of the Doosan Group: Why Delist Doosan Bobcat (Jewel of Doosan Group)?

There has been a major backlash among both domestic and overseas investors on the split of Doosan Enerbility, merger swap between Doosan Enerbility...

Douglas Kim

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