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

<h2>Stock swap arb spread</h2><p>The cancellation risk from the Green Cross Lab Cell/Green Cross Cell merger has disappeared. Although no official announcement has been made yet, a Green Cross Lab Cell company official said in an interview with the local media last Friday that the stock purchase cost was less than ₩150B, set as the ceiling.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/234/324/original/1.png?1633802584" class="editor-image img-responsive" data-smartkarma-image-id="234324"></figure></section><p><a href="https://n.news.naver.com/article/243/0000017006" target="_blank" rel="noopener">The link to this news report by "The Economist" is here.</a></p><p>The appraisal rights exercise period was September 13 to October 4 for Green Cross Lab Cell (the acquirer) and Green Cross Cell (the target company).</p><table class="table table-striped">
<colgroup>
<col width="200">
<col width="200">
</colgroup>
<tbody>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Schedule"}' data-sheets-note="Sang Hyun Park: We have to buy shares until BOD+1 to be eligible to receive stock purchase rights. We then have to notify our dissenting opinion until the end of dissenting opinion notice period.">Schedule</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Stock purchase right exercise"}'><strong>Stock purchase right exercise begins</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"2020. 09. 13 ~ 10. 04"}'><strong>2021. 09. 13</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Listing"}'><strong>Stock purchase right exercise ends</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44147}' data-sheets-numberformat='{"1":5,"2":"yyyy. mm. dd","3":1}'><strong>2021. 10. 04</strong></td>
</tr>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><p>The exercise prices are ₩103,244 for Green Cross Lab Cell and ₩41,163 for Green Cross Cell. The share prices had consistently been substantially below the exercise prices, making many arb traders worry about the cancellation. But despite a decent spread (3~7%) throughout the exercise period, it turns out that the company managed to keep it below the threshold that may trigger the cancellation.</p><table class="table table-striped">
<colgroup>
<col width="200">
<col width="200">
</colgroup>
<tbody>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Swap overview"}'>Appraisal rights exercise overview</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Stock purchase ceiling condition"}'><strong>Stock purchase ceiling condition</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"If exceeds for both combined"}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}'><strong>If the total cost exceeds</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Amount"}'><strong>- Ceiling amount for both companies combined</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":150}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'><strong>₩150.0B</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Exercise price - Green Cross Lab Cell Corp"}' data-sheets-formula='="Exercise price - "&amp;R[-11]C[1]'>Exercise price - Green Cross Lab Cell Corp</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":103244}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}'>₩103,244</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Exercise price - Green Cross Cell Corp"}' data-sheets-formula='="Exercise price - "&amp;R[-9]C[1]'>Exercise price - Green Cross Cell Corp</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":41163}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}'>₩41,163</td>
</tr>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"Spread - stock purchase"}'>Spread - stock purchase</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Acquirer"}'>Acquirer</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Target company"}'>Target company</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Current price"}'><strong>Price on the last trading day of the appraisal rights exercise period (October 1)</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":98200}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}' data-sheets-formula="=Status!R[-9]C[1]"><strong>₩98,200</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":38150}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}' data-sheets-formula="=Status!R[-9]C[1]"><strong>₩38,150</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Exercise price"}'>Exercise price</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":103244}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}' data-sheets-formula="=Terms!R[-18]C[0]">₩103,244</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":41163}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}' data-sheets-formula="=Terms!R[-17]C[-1]">₩41,163</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Transfer income tax"}'>Transfer income tax</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":2220.68}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}' data-sheets-formula="=R[16]C[0]/R[9]C[0]">₩2,221</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":937.86}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}' data-sheets-formula="=R[16]C[0]/R[9]C[0]">₩938</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Shares"}'>- Shares</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":10000}' data-sheets-numberformat='{"1":2,"2":"#,##0"}' data-sheets-formula="=R[8]C[0]">10,000</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":10000}' data-sheets-numberformat='{"1":2,"2":"#,##0"}' data-sheets-formula="=R[8]C[0]">10,000</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Tax-adj. exercise price"}'>Tax-adj. exercise price</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":101023.32}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}' data-sheets-formula="=R[-3]C[0]-R[-2]C[0]">₩101,023</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":40225.14}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}' data-sheets-formula="=R[-3]C[0]-R[-2]C[0]">₩40,225</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Spread"}'><strong>Spread</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.0287507128309573}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(R[-1]C[0]-R[-5]C[0])/R[-5]C[0]"><strong>2.88%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.05439423328964612}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(R[-1]C[0]-R[-5]C[0])/R[-5]C[0]"><strong>5.44%</strong></td>
</tr>
<tr><td colspan="3" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART &amp; KRX"}'>Source: DART &amp; KRX</td></tr>
</tbody>
</table><p>The current swap arb spread is 1.99%. As the possibility of a merger increased, the swap spread was gradually revised down. Nevertheless, we were able to obtain an arb spread of close to 5% by mid-September, so we would have been able to secure decent profits if we started arb trading at this time.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"Swap gain"}'>Swap gain</td>
<td style="text-align: center;" data-sheets-value='{"1":2,"2":"Green Cross Lab Cell Corp"}' data-sheets-formula="=Terms!R[2]C[0]">Green Cross Lab Cell Corp</td>
<td style="text-align: center;" data-sheets-value='{"1":2,"2":"Green Cross Cell Corp"}' data-sheets-formula="=Terms!R[5]C[-1]"><div><div>Green Cross Cell Corp</div></div></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Current price"}'>Current price</td>
<td style="text-align: center;" data-sheets-value='{"1":3,"3":92900}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}' data-sheets-formula='=googlefinance(Terms!R[2]C[0], "price")'>₩92,900</td>
<td style="text-align: center;" data-sheets-value='{"1":3,"3":36650}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}' data-sheets-formula='=googlefinance(Terms!R[5]C[-1], "price")'>₩36,650</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Swap price"}'>Swap price</td>
<td style="text-align: center;" data-sheets-value='{"1":3,"3":102882}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}'>₩102,882</td>
<td style="text-align: center;" data-sheets-value='{"1":3,"3":41395}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}'>₩41,395</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Swap ratio"}'>Swap ratio</td>
<td colspan="2" rowspan="1" style="text-align: center;" data-sheets-value='{"1":3,"3":0.40235415330184093}' data-sheets-numberformat='{"1":2,"2":"#,##0.0000000","3":1}' data-sheets-formula="=R[-1]C[1]/R[-1]C[0]">0.4023542</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Price for 100 shares of the target company"}'><strong>Price for 100 shares of the target company</strong></td>
<td colspan="2" rowspan="1" style="text-align: center;" data-sheets-value='{"1":3,"3":3665000}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}' data-sheets-formula="=R[-3]C[1]*100"><strong>₩3,665,000</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Number of new shares of the acquiring company"}'>Number of new shares of the acquiring company</td>
<td colspan="2" rowspan="1" style="text-align: center;" data-sheets-value='{"1":3,"3":40.2354153301841}' data-sheets-numberformat='{"1":2,"2":"#,##0.0000000","3":1}' data-sheets-formula="=100*R[-2]C[0]">40.2354153</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Value of the new shares at the current price"}'><strong>Value of the new shares at the current price</strong></td>
<td colspan="2" rowspan="1" style="text-align: center;" data-sheets-value='{"1":3,"3":3737870.0841741026}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}' data-sheets-formula="=R[-1]C[0]*R[-5]C[0]"><strong>₩3,737,870</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Swap gain"}'><strong>Swap gain</strong></td>
<td colspan="2" rowspan="1" style="text-align: center;" data-sheets-value='{"1":3,"3":0.019882696909714226}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(R[-1]C[0]-R[-3]C[0])/R[-3]C[0]"><strong>1.99%</strong></td>
</tr>
<tr><td colspan="3" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART &amp; KRX"}'>Source: DART &amp; KRX</td></tr>
</tbody>
</table><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/234/325/original/image_92664529421633803241243.png?1633803242" class="editor-image img-responsive" data-smartkarma-image-id="234325"></figure><div class="content-highlight"><ul>
<li><strong>There are still opportunities for arb trade. We can immediately execute arb trading if sufficient spread occurs before the Green Cross Cell trading suspension (October 28).</strong></li>
<li><strong>However, it is uncertain whether we will see a spread of more than 4% again from now as the cancellation risk, which was the only risk of this event, disappeared.</strong></li>
<li><strong>Still, it seems worthwhile to keep an eye on the spread movement until the trading suspension date.</strong></li>
</ul></div><table class="table table-striped">
<colgroup>
<col width="200">
<col width="200">
</colgroup>
<tbody>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Schedule"}' data-sheets-note="Sang Hyun Park: We have to buy shares until BOD+1 to be eligible to receive stock purchase rights. We then have to notify our dissenting opinion until the end of dissenting opinion notice period.">Schedule</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Trade suspension (only Green Cross Cell)"}'><strong>Trade suspension begins (only for Green Cross Cell)</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"2020. 10. 28 ~ 11. 11"}'><strong>2021. 10. 28</strong></td>
</tr>
<tr>
<td><strong>Trade suspension begins (only for Green Cross Cell) </strong></td>
<td style="text-align: right;"><strong>2021. 11. 11 </strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Listing"}'>Listing</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44147}' data-sheets-numberformat='{"1":5,"2":"yyyy. mm. dd","3":1}'>2021. 11. 12</td>
</tr>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table>

Stock swap arb spreadThe cancellation risk from the Green Cross Lab Cell/Green Cross Cell merger has disappeared. Although no official announcement has been made yet, a Green Cross Lab Cell company official said in an interview with the local media last Friday that the stock purchase cost was less than ₩150B, set as the ceiling.The link to this news report by "The Economist" is here.The appraisal rights exercise period was September 13 to October 4 for Green Cross Lab Cell (the acquirer) and Green Cross Cell (the target company).





Schedule

Stock purchase right exercise begins
2021. 09. 13


Stock purchase right exercise ends
2021. 10. 04

Source: DART

The exercise prices are ₩103,244 for Green Cross Lab Cell and ₩41,163 for Green Cross Cell. The share prices had consistently been substantially below the exercise prices, making many arb traders worry about the cancellation. But despite a decent spread (3~7%) throughout the exercise period, it turns out that the company managed to keep it below the threshold that may trigger the cancellation.





Appraisal rights exercise overview

Stock purchase ceiling condition
If the total cost exceeds


- Ceiling amount for both companies combined
₩150.0B


Exercise price - Green Cross Lab Cell Corp
₩103,244


Exercise price - Green Cross Cell Corp
₩41,163

Source: DART









Spread - stock purchase
Acquirer
Target company


Price on the last trading day of the appraisal rights exercise period (October 1)
₩98,200
₩38,150


Exercise price
₩103,244
₩41,163


Transfer income tax
₩2,221
₩938


- Shares
10,000
10,000


Tax-adj. exercise price
₩101,023
₩40,225


Spread
2.88%
5.44%

Source: DART &amp; KRX

The current swap arb spread is 1.99%. As the possibility of a merger increased, the swap spread was gradually revised down. Nevertheless, we were able to obtain an arb spread of close to 5% by mid-September, so we would have been able to secure decent profits if we started arb trading at this time.







Swap gain
Green Cross Lab Cell Corp
Green Cross Cell Corp


Current price
₩92,900
₩36,650


Swap price
₩102,882
₩41,395


Swap ratio
0.4023542


Price for 100 shares of the target company
₩3,665,000


Number of new shares of the acquiring company
40.2354153


Value of the new shares at the current price
₩3,737,870


Swap gain
1.99%

Source: DART &amp; KRX


There are still opportunities for arb trade. We can immediately execute arb trading if sufficient spread occurs before the Green Cross Cell trading suspension (October 28).
However, it is uncertain whether we will see a spread of more than 4% again from now as the cancellation risk, which was the only risk of this event, disappeared.
Still, it seems worthwhile to keep an eye on the spread movement until the trading suspension date.






Schedule

Trade suspension begins (only for Green Cross Cell)
2021. 10. 28


Trade suspension begins (only for Green Cross Cell) 
2021. 11. 11 


Listing
2021. 11. 12

Source: DART



GC Lab Cell Merger: Multi-Staged Arb Setups for Swap Spreads & KOSDAQ 150 Rebalancing on Oct 27

<p>The arb spread of the Green Cross swap event widened to 5% again today. Although it is less than the level that expanded to the 7% level a while ago, the current level is definitely attractive compared to the 4% level last week.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/229/447/original/image_15933136631631505330831.png?1631505332" class="editor-image img-responsive" data-smartkarma-image-id="229447"></figure><p>Today is the day of the general meeting of shareholders for the approval of the merger. And both companies have just obtained shareholder approval. The key was whether Green Cross Cell would receive shareholder approval, and as 5.68 million shares voted in favor of the merger, the merger passed the general shareholders' meeting.</p><table class="table table-striped">
<colgroup>
<col width="200">
<col width="200">
</colgroup>
<tbody>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Schedule"}' data-sheets-note="Sang Hyun Park: We have to buy shares until BOD+1 to be eligible to receive stock purchase rights. We then have to notify our dissenting opinion until the end of dissenting opinion notice period.">Schedule</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Shareholder meeting"}'><strong>Shareholder meeting</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44087}' data-sheets-numberformat='{"1":5,"2":"yyyy. mm. dd","3":1}'><strong>2021. 09. 13</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Stock purchase right exercise"}'><strong>Stock purchase right exercise</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"2020. 09. 13 ~ 10. 04"}'><strong>2021. 09. 13 ~ 10. 04</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Trade suspension (only Green Cross Cell)"}'>Trade suspension (only Green Cross Cell)</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"2020. 10. 28 ~ 11. 11"}'>2021. 10. 28 ~ 11. 11</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Listing"}'>Listing</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":44147}' data-sheets-numberformat='{"1":5,"2":"yyyy. mm. dd","3":1}'>2021. 11. 12</td>
</tr>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><p>Of course, just because the merger was approved at the shareholders' meeting doesn't mean everything is over. We will now have an appraisal rights exercise period from today to October 4th. If the stock purchase cost exceeds ₩150B, the merger may be canceled. Currently, the spread between Green Cross Cell's dissent rights exercise price and the current share price has widened to the 7% range, so we cannot be relieved.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"Spread - stock purchase"}'>Spread - stock purchase</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Acquirer"}'>Green Cross Lab Cell</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Target company"}'>Green Cross Cell</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Current price"}'>Current price</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":99400}' data-sheets-numberformat='[null,2,"[$₩-412]#,##0",1]' data-sheets-formula="=R[-29]C[0]">₩99,400</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":38000}' data-sheets-numberformat='[null,2,"[$₩-412]#,##0",1]' data-sheets-formula="=R[-29]C[0]"><strong>₩38,000</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Exercise price"}'>Exercise price</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":103244}' data-sheets-numberformat='[null,2,"[$₩-412]#,##0",1]' data-sheets-formula="=Terms!R[-18]C[0]">₩103,244</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":41163}' data-sheets-numberformat='[null,2,"[$₩-412]#,##0",1]' data-sheets-formula="=Terms!R[-17]C[-1]"><strong>₩41,163</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Transfer income tax"}'>Transfer income tax</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":790.68}' data-sheets-numberformat='[null,2,"[$₩-412]#,##0",1]' data-sheets-formula="=R[16]C[0]/R[9]C[0]">₩791</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":640.86}' data-sheets-numberformat='[null,2,"[$₩-412]#,##0",1]' data-sheets-formula="=R[16]C[0]/R[9]C[0]"><strong>₩641</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Shares"}'>- Shares</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":10000}' data-sheets-numberformat='[null,2,"#,##0"]' data-sheets-formula="=R[8]C[0]">10,000</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":10000}' data-sheets-numberformat='[null,2,"#,##0"]' data-sheets-formula="=R[8]C[0]"><strong>10,000</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Tax-adj. exercise price"}'>Tax-adj. exercise price</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":102453.32}' data-sheets-numberformat='[null,2,"[$₩-412]#,##0",1]' data-sheets-formula="=R[-3]C[0]-R[-2]C[0]">₩102,453</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":40522.14}' data-sheets-numberformat='[null,2,"[$₩-412]#,##0",1]' data-sheets-formula="=R[-3]C[0]-R[-2]C[0]"><strong>₩40,522</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Spread"}'>Spread</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.030717505030181155}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=(R[-1]C[0]-R[-34]C[0])/R[-34]C[0]">3.07%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.06637210526315789}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=(R[-1]C[0]-R[-34]C[0])/R[-34]C[0]"><strong>6.64%</strong></td>
</tr>
<tr><td colspan="3" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART &amp; KRX"}'>Source: DART &amp; KRX</td></tr>
</tbody>
</table>

The arb spread of the Green Cross swap event widened to 5% again today. Although it is less than the level that expanded to the 7% level a while ago, the current level is definitely attractive compared to the 4% level last week.Today is the day of the general meeting of shareholders for the approval of the merger. And both companies have just obtained shareholder approval. The key was whether Green Cross Cell would receive shareholder approval, and as 5.68 million shares voted in favor of the merger, the merger passed the general shareholders' meeting.





Schedule

Shareholder meeting
2021. 09. 13


Stock purchase right exercise
2021. 09. 13 ~ 10. 04


Trade suspension (only Green Cross Cell)
2021. 10. 28 ~ 11. 11


Listing
2021. 11. 12

Source: DART

Of course, just because the merger was approved at the shareholders' meeting doesn't mean everything is over. We will now have an appraisal rights exercise period from today to October 4th. If the stock purchase cost exceeds ₩150B, the merger may be canceled. Currently, the spread between Green Cross Cell's dissent rights exercise price and the current share price has widened to the 7% range, so we cannot be relieved.







Spread - stock purchase
Green Cross Lab Cell
Green Cross Cell


Current price
₩99,400
₩38,000


Exercise price
₩103,244
₩41,163


Transfer income tax
₩791
₩641


- Shares
10,000
10,000


Tax-adj. exercise price
₩102,453
₩40,522


Spread
3.07%
6.64%

Source: DART &amp; KRX



Green Cross Merger Got Shareholder Approval (Both Companies): Arb Spread at 5%, I'd Trade It

<p>Green Cross Lab Cell (the acquiring company) &amp; Green Cross Cell Corp (the target company) are still in the middle of the stock swap process. At the current prices, the swap spread stands at 4.95%.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"Swap gain"}'>Swap gain</td>
<td style="text-align: center;" data-sheets-value='{"1":2,"2":"Green Cross Lab Cell Corp"}' data-sheets-formula="=Terms!R[2]C[0]">Green Cross Lab Cell Corp</td>
<td style="text-align: center;" data-sheets-value='{"1":2,"2":"Green Cross Cell Corp"}' data-sheets-formula="=Terms!R[5]C[-1]"><div><div>Green Cross Cell Corp</div></div></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Current price"}'><strong>Current price</strong></td>
<td style="text-align: center;" data-sheets-value='{"1":3,"3":101200}' data-sheets-numberformat='[null,2,"[$₩-412]#,##0",1]' data-sheets-formula='=googlefinance(Terms!R[2]C[0], "price")'><strong>₩101,200</strong></td>
<td style="text-align: center;" data-sheets-value='{"1":3,"3":38900}' data-sheets-numberformat='[null,2,"[$₩-412]#,##0",1]' data-sheets-formula='=googlefinance(Terms!R[5]C[-1], "price")'><strong>₩38,900</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Swap price"}'><strong>Swap price</strong></td>
<td style="text-align: center;" data-sheets-value='{"1":3,"3":102882}' data-sheets-numberformat='[null,2,"[$₩-412]#,##0",1]'><strong>₩102,882</strong></td>
<td style="text-align: center;" data-sheets-value='{"1":3,"3":41395}' data-sheets-numberformat='[null,2,"[$₩-412]#,##0",1]'><strong>₩41,395</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Swap ratio"}'>Swap ratio</td>
<td colspan="2" rowspan="1" style="text-align: center;" data-sheets-value='{"1":3,"3":0.40235415330184093}' data-sheets-numberformat='[null,2,"#,##0.0000000",1]' data-sheets-formula="=R[-1]C[1]/R[-1]C[0]">0.4023542</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Price for 100 shares of the target company"}'>100 shares of the target company</td>
<td colspan="2" rowspan="1" style="text-align: center;" data-sheets-value='{"1":3,"3":3890000}' data-sheets-numberformat='[null,2,"[$₩-412]#,##0",1]' data-sheets-formula="=R[-3]C[1]*100">₩3,890,000</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Number of new shares of the acquiring company"}'>New shares of the acquiring company</td>
<td colspan="2" rowspan="1" style="text-align: center;" data-sheets-value='{"1":3,"3":40.2354153301841}' data-sheets-numberformat='[null,2,"#,##0.0000000",1]' data-sheets-formula="=100*R[-2]C[0]">40.2354153</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Value of the new shares at the current price"}'> - Value at the current price</td>
<td colspan="2" rowspan="1" style="text-align: center;" data-sheets-value='{"1":3,"3":4071824.0314146304}' data-sheets-numberformat='[null,2,"[$₩-412]#,##0",1]' data-sheets-formula="=R[-1]C[0]*R[-5]C[0]">₩4,071,824</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Swap gain"}'><strong>Swap gain</strong></td>
<td colspan="2" rowspan="1" style="text-align: center;" data-sheets-value='{"1":3,"3":0.04674139625054765}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=(R[-1]C[0]-R[-3]C[0])/R[-3]C[0]"><strong>4.95%</strong></td>
</tr>
<tr><td colspan="3" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART &amp; KRX"}'>Source: DART &amp; KRX</td></tr>
</tbody>
</table><p>The swap spread soared to 8.21% last Friday and stayed at 8% this Monday. And today it is again approaching 5%.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/225/992/original/image_43107879131629868820922.png?1629868822" class="editor-image img-responsive" data-smartkarma-image-id="225992"></figure><p>This wide swap spread was caused by the fact that the share price decline of Green Cross Cell last week was significantly greater than that of Green Cross Lab Cell. This can be seen as an increase in price disparity following the harsher stock price correction of the entire KOSDAQ market compared with the KOSPI market.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/225/993/original/Screen+Shot+2021-08-25+at+1.24.19+AM.png?1629869082" class="editor-image img-responsive" data-smartkarma-image-id="225993"></figure></section><p>However, we aren't seeing active arb trades yet. This is mainly because both companies' appraisal rights exercise prices are higher than the current prices. In particular, Green Cross Cell's exercise price is 4.68% higher than the current price. So yes, this means we have a real concern about the cancellation.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"Spread - stock purchase"}'>Spread - stock purchase</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Acquirer"}'>Green Cross Lab Cell Corp</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Target company"}'>Green Cross Cell Corp</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Current price"}'>Current price</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":101200}' data-sheets-numberformat='[null,2,"[$₩-412]#,##0",1]' data-sheets-formula="=R[-29]C[0]">₩101,200</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":38900}' data-sheets-numberformat='[null,2,"[$₩-412]#,##0",1]' data-sheets-formula="=R[-29]C[0]">₩38,900</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Exercise price"}'>Exercise price</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":103244}' data-sheets-numberformat='[null,2,"[$₩-412]#,##0",1]' data-sheets-formula="=Terms!R[-18]C[0]">₩103,244</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":41163}' data-sheets-numberformat='[null,2,"[$₩-412]#,##0",1]' data-sheets-formula="=Terms!R[-17]C[-1]">₩41,163</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Transfer income tax"}'>Transfer income tax</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":394.68}' data-sheets-numberformat='[null,2,"[$₩-412]#,##0",1]' data-sheets-formula="=R[16]C[0]/R[9]C[0]">₩395</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":442.86}' data-sheets-numberformat='[null,2,"[$₩-412]#,##0",1]' data-sheets-formula="=R[16]C[0]/R[9]C[0]">₩443</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Shares"}'>- Shares</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":10000}' data-sheets-numberformat='[null,2,"#,##0"]' data-sheets-formula="=R[8]C[0]">10,000</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":10000}' data-sheets-numberformat='[null,2,"#,##0"]' data-sheets-formula="=R[8]C[0]">10,000</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Tax-adj. exercise price"}'>Tax-adj. exercise price</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":102849.32}' data-sheets-numberformat='[null,2,"[$₩-412]#,##0",1]' data-sheets-formula="=R[-3]C[0]-R[-2]C[0]">₩102,849</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":40720.14}' data-sheets-numberformat='[null,2,"[$₩-412]#,##0",1]' data-sheets-formula="=R[-3]C[0]-R[-2]C[0]">₩40,720</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Spread"}'><strong>Spread</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.01629762845849809}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=(R[-1]C[0]-R[-34]C[0])/R[-34]C[0]"><strong>1.63%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.04679023136246785}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=(R[-1]C[0]-R[-34]C[0])/R[-34]C[0]"><strong>4.68%</strong></td>
</tr>
<tr><td colspan="3" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART &amp; KRX"}'>Source: DART &amp; KRX</td></tr>
</tbody>
</table><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"Transfer income tax - stock purchase"}'>Transfer income tax</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Acquirer"}'>Green Cross Lab Cell Corp</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Target company"}'>Green Cross Cell Corp</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Note"}'>Note</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Initial purchase amount"}'>Initial purchase amount</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1012000000}' data-sheets-numberformat='[null,2,"[$₩-412]#,##0",1]' data-sheets-formula="=R[1]C[0]*R[2]C[0]">₩1,012,000,000</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":389000000}' data-sheets-numberformat='[null,2,"[$₩-412]#,##0",1]' data-sheets-formula="=R[1]C[0]*R[2]C[0]">₩389,000,000</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"A = B × C"}'>A = B × C</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Price"}'>- Price</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":101200}' data-sheets-numberformat='[null,2,"[$₩-412]#,##0",1]' data-sheets-formula="=R[-39]C[0]">₩101,200</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":38900}' data-sheets-numberformat='[null,2,"[$₩-412]#,##0",1]' data-sheets-formula="=R[-39]C[0]">₩38,900</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"B"}'>B</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Shares"}'>- Shares</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":10000}' data-sheets-numberformat='[null,2,"#,##0"]'>10,000</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":10000}' data-sheets-numberformat='[null,2,"#,##0"]'>10,000</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"C"}'>C</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Transaction amount"}'>Transaction amount</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1032440000}' data-sheets-numberformat='[null,2,"[$₩-412]#,##0",1]' data-sheets-formula="=R[1]C[0]*R[-1]C[0]">₩1,032,440,000</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":411630000}' data-sheets-numberformat='[null,2,"[$₩-412]#,##0",1]' data-sheets-formula="=R[1]C[0]*R[-1]C[0]">₩411,630,000</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"D = E × C"}'>D = E × C</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Price"}'>- Price</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":103244}' data-sheets-numberformat='[null,2,"[$₩-412]#,##0",1]' data-sheets-formula="=R[-12]C[0]">₩103,244</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":41163}' data-sheets-numberformat='[null,2,"[$₩-412]#,##0",1]' data-sheets-formula="=R[-12]C[0]">₩41,163</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"E"}'>E</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Securities transaction tax"}'>Securities transaction tax</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='[null,2,"[$₩-412]#,##0",1]' data-sheets-formula="=If((R[-1]C[0]-R[-5]C[0])*R[1]C[0]&gt;0, (R[-1]C[0]-R[-5]C[0])*R[1]C[0], 0)">₩0</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='[null,2,"[$₩-412]#,##0",1]' data-sheets-formula="=If((R[-1]C[0]-R[-5]C[0])*R[1]C[0]&gt;0, (R[-1]C[0]-R[-5]C[0])*R[1]C[0], 0)">₩0</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"F = D × G"}'>F = D × G</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Rate"}'>- Rate</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.005}' data-sheets-numberformat='[null,3,"0.00%",1]'>0.50%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.005}' data-sheets-numberformat='[null,3,"0.00%",1]'>0.50%</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"G"}'>G</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Transfer income basic deduction"}'>Basic deduction</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":2500000}' data-sheets-numberformat='[null,2,"[$₩-412]#,##0",1]'>₩2,500,000</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":2500000}' data-sheets-numberformat='[null,2,"[$₩-412]#,##0",1]'>₩2,500,000</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"H"}'>H</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Transfer income tax base"}'>Transfer income tax base</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":17940000}' data-sheets-numberformat='[null,2,"[$₩-412]#,##0",1]' data-sheets-formula="=if(R[-5]C[0]-R[-8]C[0]-R[-3]C[0]-R[-1]C[0]&gt;0, R[-5]C[0]-R[-8]C[0]-R[-3]C[0]-R[-1]C[0], 0)">₩17,940,000</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":20130000}' data-sheets-numberformat='[null,2,"[$₩-412]#,##0",1]' data-sheets-formula="=if(R[-5]C[0]-R[-8]C[0]-R[-3]C[0]-R[-1]C[0]&gt;0, R[-5]C[0]-R[-8]C[0]-R[-3]C[0]-R[-1]C[0], 0)">₩20,130,000</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"I = D - A - F - H"}'>I = D - A - F - H</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Transfer income tax"}'>Transfer income tax</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":3946800}' data-sheets-numberformat='[null,2,"[$₩-412]#,##0",1]' data-sheets-formula="=R[-1]C[0]*R[1]C[0]">₩3,946,800</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":4428600}' data-sheets-numberformat='[null,2,"[$₩-412]#,##0",1]' data-sheets-formula="=R[-1]C[0]*R[1]C[0]">₩4,428,600</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"J = I × K"}'>J = I × K</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Rate"}'>- Rate</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.22}' data-sheets-numberformat='[null,3,"0.00%",1]'>22.00%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.22}' data-sheets-numberformat='[null,3,"0.00%",1]'>22.00%</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"K"}'>K</td>
</tr>
<tr><td colspan="4" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART &amp; KRX"}'>Source: DART &amp; KRX</td></tr>
</tbody>
</table>

Green Cross Lab Cell (the acquiring company) &amp; Green Cross Cell Corp (the target company) are still in the middle of the stock swap process. At the current prices, the swap spread stands at 4.95%.







Swap gain
Green Cross Lab Cell Corp
Green Cross Cell Corp


Current price
₩101,200
₩38,900


Swap price
₩102,882
₩41,395


Swap ratio
0.4023542


100 shares of the target company
₩3,890,000


New shares of the acquiring company
40.2354153


 - Value at the current price
₩4,071,824


Swap gain
4.95%

Source: DART &amp; KRX

The swap spread soared to 8.21% last Friday and stayed at 8% this Monday. And today it is again approaching 5%.This wide swap spread was caused by the fact that the share price decline of Green Cross Cell last week was significantly greater than that of Green Cross Lab Cell. This can be seen as an increase in price disparity following the harsher stock price correction of the entire KOSDAQ market compared with the KOSPI market.However, we aren't seeing active arb trades yet. This is mainly because both companies' appraisal rights exercise prices are higher than the current prices. In particular, Green Cross Cell's exercise price is 4.68% higher than the current price. So yes, this means we have a real concern about the cancellation.







Spread - stock purchase
Green Cross Lab Cell Corp
Green Cross Cell Corp


Current price
₩101,200
₩38,900


Exercise price
₩103,244
₩41,163


Transfer income tax
₩395
₩443


- Shares
10,000
10,000


Tax-adj. exercise price
₩102,849
₩40,720


Spread
1.63%
4.68%

Source: DART &amp; KRX










Transfer income tax
Green Cross Lab Cell Corp
Green Cross Cell Corp
Note


Initial purchase amount
₩1,012,000,000
₩389,000,000
A = B × C


- Price
₩101,200
₩38,900
B


- Shares
10,000
10,000
C


Transaction amount
₩1,032,440,000
₩411,630,000
D = E × C


- Price
₩103,244
₩41,163
E


Securities transaction tax
₩0
₩0
F = D × G


- Rate
0.50%
0.50%
G


Basic deduction
₩2,500,000
₩2,500,000
H


Transfer income tax base
₩17,940,000
₩20,130,000
I = D - A - F - H


Transfer income tax
₩3,946,800
₩4,428,600
J = I × K


- Rate
22.00%
22.00%
K

Source: DART &amp; KRX



Green Cross Stock Swap: A 5% Spread Is a Rare Opportunity

<h2>Swap overview</h2><p>This merger swap is very similar to the recent case of GS Retail &amp; GS Home Shopping. Green Cross Lab Cell will merge with Green Cross Cell through a stock swap. The Green Cross Cell shareholders will get 0.4023542 Green Cross Lab Cell shares for each Green Cross Cell share.</p><table class="table table-striped">
<colgroup>
<col width="300">
<col width="300">
</colgroup>
<tbody>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Swap overview"}'>Swap overview</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Type"}'>Type</td>
<td data-sheets-value='{"1":2,"2":"Stock swap"}'>Stock swap</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Acquirer"}'>Acquirer</td>
<td data-sheets-value='{"1":2,"2":"Green Cross Lab Cell Corp (144510)"}'>Green Cross Lab Cell Corp (144510)</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Target company"}'>Target company</td>
<td data-sheets-value='{"1":2,"2":"Green Cross Cell Corp (031390)"}'>Green Cross Cell Corp (031390)</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Swap price for Green Cross Lab Cell"}'><strong>Swap price for Green Cross Lab Cell</strong></td>
<td data-sheets-value='{"1":3,"3":102882}'><strong>₩102,882</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Swap price for Green Cross Cell"}'><strong>Swap price for Green Cross Cell</strong></td>
<td data-sheets-value='{"1":3,"3":41395}'><strong>₩41,395</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Swap ratio"}'><strong>Swap ratio</strong></td>
<td data-sheets-value='{"1":3,"3":0.40235415330184093}' data-sheets-numberformat='{"1":2,"2":"#,##0.0000000","3":1}' data-sheets-formula="=R[-1]C[0]/R[-2]C[0]"><strong>0.4023542</strong></td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><h2>Schedule</h2><p>The record date for securing voting rights at the general shareholders' meeting is August 2nd. The last day to secure the purchase right was yesterday. If you have purchased stocks by yesterday, you can exercise your stock purchase right by notifying your dissenting opinion between August 27 and September 13.</p><p>The exercise period of the stock appraisal right is from September 13th to October 4th. Trading of Green Cross Cell will be suspended from October 28th to November 11th, and new shares of Green Cross Lab Cell will be listed on November 12th.</p><table class="table table-striped">
<colgroup>
<col width="300">
<col width="300">
</colgroup>
<tbody>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Schedule"}' data-sheets-note="Sang Hyun Park: We have to buy shares until BOD+1 to be eligible to receive stock purchase rights. We then have to notify our dissenting opinion until the end of dissenting opinion notice period.">Schedule</td></tr>
<tr>
<td><span data-sheets-value='{"1":2,"2":"Last day to own stock purchase rights"}' data-sheets-userformat='{"2":15041,"3":{"1":0},"9":0,"10":1,"12":0,"14":{"1":2,"2":4408131},"15":"Courier New","16":9}'>Last day to own stock purchase rights</span></td>
<td><span data-sheets-value='{"1":3,"3":44031}' data-sheets-userformat='{"2":15041,"3":{"1":5,"2":"yyyy. mm. dd","3":1},"9":2,"10":1,"12":0,"14":{"1":2,"2":4408131},"15":"Courier New","16":9}'>2020. 07. 19</span></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Record date of shareholder register"}'>Record date of the shareholder register</td>
<td data-sheets-value='{"1":3,"3":44045}' data-sheets-numberformat='{"1":5,"2":"yyyy. mm. dd","3":1}'>2020. 08. 02</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Dissenting opinion notice"}'><strong>Dissenting opinion notice</strong></td>
<td data-sheets-value='{"1":2,"2":"2020. 08. 27 ~ 09. 13"}'><strong>2020. 08. 27 ~ 09. 13</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Shareholder meeting"}'><strong>Shareholder meeting</strong></td>
<td data-sheets-value='{"1":3,"3":44087}' data-sheets-numberformat='{"1":5,"2":"yyyy. mm. dd","3":1}'><strong>2020. 09. 13</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Stock purchase right exercise"}'><strong>Stock purchase right exercise</strong></td>
<td data-sheets-value='{"1":2,"2":"2020. 09. 13 ~ 10. 04"}'><strong>2020. 09. 13 ~ 10. 04</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Trade suspension (only Green Cross Cell)"}'><strong>Trade suspension (only Green Cross Cell)</strong></td>
<td data-sheets-value='{"1":2,"2":"2020. 10. 28 ~ 11. 11"}'><strong>2020. 10. 28 ~ 11. 11</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Listing"}'>Listing</td>
<td data-sheets-value='{"1":3,"3":44147}' data-sheets-numberformat='{"1":5,"2":"yyyy. mm. dd","3":1}'>2020. 11. 12</td>
</tr>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><div>
<h2>Stock purchase rights</h2>
<p>The stock purchase cost ceiling is set at ₩150.0B combined for both. The exercise prices are currently 6.31% and 5.91% below the current share prices of GS Retail and GS Home Shopping. </p>
<table class="table table-striped">
<colgroup>
<col width="200">
<col width="200">
<col width="200">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"Spread - stock purchase"}'>Spread - stock purchase</td>
<td style="text-align: center;" data-sheets-value='{"1":2,"2":"Green Cross Lab Cell Corp"}' data-sheets-formula="=R[-52]C[0]">Green Cross Lab Cell Corp</td>
<td style="text-align: center;" data-sheets-value='{"1":2,"2":"Green Cross Cell Corp"}' data-sheets-formula="=R[-49]C[-1]">Green Cross Cell Corp</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Current price"}'>Current price</td>
<td style="text-align: center;" data-sheets-value='{"1":3,"3":110200}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}' data-sheets-formula='=googlefinance(Terms!R[-52]C[0], "price")'>₩110,200</td>
<td style="text-align: center;" data-sheets-value='{"1":3,"3":43750}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}' data-sheets-formula='=googlefinance(Terms!R[-49]C[-1], "price")'>₩43,750</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Exercise price"}'><strong>Exercise price</strong></td>
<td style="text-align: center;" data-sheets-value='{"1":3,"3":103244}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}' data-sheets-formula="=R[-43]C[0]"><strong>₩103,244</strong></td>
<td style="text-align: center;" data-sheets-value='{"1":3,"3":41163}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}' data-sheets-formula="=R[-42]C[-1]"><strong>₩41,163</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Premium/discount to the current price"}'><strong>Premium/discount to the current price</strong></td>
<td style="text-align: center;" data-sheets-value='{"1":3,"3":-0.06312159709618875}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(R[-1]C[0]-R[-2]C[0])/R[-2]C[0]"><strong>-6.31%</strong></td>
<td style="text-align: center;" data-sheets-value='{"1":3,"3":-0.05913142857142857}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(R[-1]C[0]-R[-2]C[0])/R[-2]C[0]"><strong>-5.91%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Stock purchase ceiling condition"}'><strong>Stock purchase ceiling condition</strong></td>
<td colspan="2" rowspan="1" style="text-align: center;" data-sheets-value='{"1":3,"3":150}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}' data-sheets-formula="=R[-46]C[0]"><strong>₩150.0B</strong></td>
</tr>
<tr><td colspan="3" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART &amp; KRX"}'>Source: DART &amp; KRX</td></tr>
</tbody>
</table>
<hr>
<h2>Price calculations</h2>
<p>Below is the calculation of swap prices and stock purchase rights exercise prices for reference.</p>
<table class="table table-striped">
<colgroup>
<col width="300">
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"Swap prices"}'>Swap prices</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Green Cross Lab Cell Corp"}' data-sheets-formula="=Terms!R[2]C[0]">Green Cross Lab Cell Corp</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Green Cross Cell Corp"}' data-sheets-formula="=Terms!R[5]C[-1]">Green Cross Cell Corp</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Note"}'>Note</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"1-month VWAP (June 16~July 15, 2021)"}'>1-month VWAP (June 16~July 15, 2021)</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":104418}'>₩104,418</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":41268}'>₩41,268</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"A"}'>A</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"1-week VWAP (July 9~July 15, 2021)"}'>1-week VWAP (July 9~July 15, 2021)</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":104029}'>₩104,029</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":41068}'>₩41,068</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"B"}'>B</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"1-day close (July 15, 2021)"}'>1-day close (July 15, 2021)</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":100200}'>₩100,200</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":41850}'>₩41,850</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"C"}'>C</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Swap price"}'><strong>Swap price</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":102882.33333333333}' data-sheets-formula="=sum(R[-3]C[0]:R[-1]C[0])/3"><strong>₩102,882</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":41395.333333333336}' data-sheets-formula="=sum(R[-3]C[0]:R[-1]C[0])/3"><strong>₩41,395</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"(A+B+C)/3"}'><strong>(A+B+C)/3</strong></td>
</tr>
<tr><td colspan="4" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART &amp; KRX"}'>Source: DART &amp; KRX</td></tr>
</tbody>
</table>
</div><table class="table table-striped">
<colgroup>
<col width="300">
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"Stock purchase rights"}'>Stock purchase rights</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Green Cross Lab Cell Corp"}' data-sheets-formula="=Terms!R[-5]C[0]">Green Cross Lab Cell Corp</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Green Cross Cell Corp"}' data-sheets-formula="=Terms!R[-2]C[-1]">Green Cross Cell Corp</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Note"}'>Note</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"2-month VWAP (May 17~July 15, 2021)"}'>2-month VWAP (May 17~July 15, 2021)</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":101285}'>₩101,285</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":41154}'>₩41,154</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"A"}'>A</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"1-month VWAP (June 16~July 15, 2021)"}'>1-month VWAP (June 16~July 15, 2021)</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":104418}'>₩104,418</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":41268}'>₩41,268</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"B"}'>B</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"1-week VWAP (July 9~July 15, 2021)"}'>1-week VWAP (July 9~July 15, 2021)</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":104029}'>₩104,029</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":41068}'>₩41,068</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"C"}'>C</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Swap price"}'><strong>Swap price</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":103244}' data-sheets-formula="=sum(R[-3]C[0]:R[-1]C[0])/3"><strong>₩103,244</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":41163.333333333336}' data-sheets-formula="=sum(R[-3]C[0]:R[-1]C[0])/3"><strong>₩41,163</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"(A+B+C)/3"}'><strong>(A+B+C)/3</strong></td>
</tr>
<tr><td colspan="4" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART &amp; KRX"}'>Source: DART &amp; KRX</td></tr>
</tbody>
</table>

Swap overviewThis merger swap is very similar to the recent case of GS Retail &amp; GS Home Shopping. Green Cross Lab Cell will merge with Green Cross Cell through a stock swap. The Green Cross Cell shareholders will get 0.4023542 Green Cross Lab Cell shares for each Green Cross Cell share.





Swap overview

Type
Stock swap


Acquirer
Green Cross Lab Cell Corp (144510)


Target company
Green Cross Cell Corp (031390)


Swap price for Green Cross Lab Cell
₩102,882


Swap price for Green Cross Cell
₩41,395


Swap ratio
0.4023542

Source: DART

ScheduleThe record date for securing voting rights at the general shareholders' meeting is August 2nd. The last day to secure the purchase right was yesterday. If you have purchased stocks by yesterday, you can exercise your stock purchase right by notifying your dissenting opinion between August 27 and September 13.The exercise period of the stock appraisal right is from September 13th to October 4th. Trading of Green Cross Cell will be suspended from October 28th to November 11th, and new shares of Green Cross Lab Cell will be listed on November 12th.





Schedule

Last day to own stock purchase rights
2020. 07. 19


Record date of the shareholder register
2020. 08. 02


Dissenting opinion notice
2020. 08. 27 ~ 09. 13


Shareholder meeting
2020. 09. 13


Stock purchase right exercise
2020. 09. 13 ~ 10. 04


Trade suspension (only Green Cross Cell)
2020. 10. 28 ~ 11. 11


Listing
2020. 11. 12

Source: DART


Stock purchase rights
The stock purchase cost ceiling is set at ₩150.0B combined for both. The exercise prices are currently 6.31% and 5.91% below the current share prices of GS Retail and GS Home Shopping. 








Spread - stock purchase
Green Cross Lab Cell Corp
Green Cross Cell Corp


Current price
₩110,200
₩43,750


Exercise price
₩103,244
₩41,163


Premium/discount to the current price
-6.31%
-5.91%


Stock purchase ceiling condition
₩150.0B

Source: DART &amp; KRX



Price calculations
Below is the calculation of swap prices and stock purchase rights exercise prices for reference.









Swap prices
Green Cross Lab Cell Corp
Green Cross Cell Corp
Note


1-month VWAP (June 16~July 15, 2021)
₩104,418
₩41,268
A


1-week VWAP (July 9~July 15, 2021)
₩104,029
₩41,068
B


1-day close (July 15, 2021)
₩100,200
₩41,850
C


Swap price
₩102,882
₩41,395
(A+B+C)/3

Source: DART &amp; KRX











Stock purchase rights
Green Cross Lab Cell Corp
Green Cross Cell Corp
Note


2-month VWAP (May 17~July 15, 2021)
₩101,285
₩41,154
A


1-month VWAP (June 16~July 15, 2021)
₩104,418
₩41,268
B


1-week VWAP (July 9~July 15, 2021)
₩104,029
₩41,068
C


Swap price
₩103,244
₩41,163
(A+B+C)/3

Source: DART &amp; KRX



Green Cross Merger Swap Summary & Arb Spread Status

Index Rebal/Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal/Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

<p>South Korean biopharmaceutical companies <a href="https://www.smartkarma.com/entities/green-cross-cell-corp" target="_blank" data-smartkarma-citation="entities:15811:1" rel="noopener">Green Cross Cell (031390 KS)</a> ("<strong>GC Cell"</strong>) and <a href="https://www.smartkarma.com/entities/green-cross-labcell-corp" target="_blank" data-smartkarma-citation="entities:33237:1" rel="noopener">Green Cross LabCell (144510 KS)</a> (<strong>"GC LabCell"</strong>) <a href="http://www.globalgreencross.com/eng/community/news_view.do?currentPage=0&amp;idx=1345&amp;gubun=0&amp;searchValue=" target="_blank" rel="noopener">announced</a> last Friday they had entered into a definitive merger agreement to combine in an all-stock transaction. Following the completion of the Merger, GC LabCell will be the surviving entity and GC Cell will be the extinct entity. </p><p>The exchange ratio is set at 0.4023542 GC LabCell Shares per GC Cell Share. At present, the companies have a combined market cap of KRW1.7tn (~US$1.5bn). </p><p>The Deal has been approved by the Boards of both companies. The completion of this Transaction is subject to Shareholder Approvals and Regulatory Approvals and the Transaction is expected to close in 4Q 2021. </p><p><em>More below the fold.</em></p><hr><div class="content-remarks"><p><strong>For more information on M&amp;A rules and practices in Korea, please check: </strong><strong><a href="https://www.smartkarma.com/insights/quiddity-korea-m-a-guide-2020" target="_blank" data-smartkarma-citation="insights:39658" rel="noopener">Quiddity Korea M&amp;A Guide 2020</a> </strong></p></div>

South Korean biopharmaceutical companies Green Cross Cell (031390 KS) ("GC Cell") and Green Cross LabCell (144510 KS) ("GC LabCell") announced last Friday they had entered into a definitive merger agreement to combine in an all-stock transaction. Following the completion of the Merger, GC LabCell will be the surviving entity and GC Cell will be the extinct entity. The exchange ratio is set at 0.4023542 GC LabCell Shares per GC Cell Share. At present, the companies have a combined market cap of KRW1.7tn (~US$1.5bn). The Deal has been approved by the Boards of both companies. The completion of this Transaction is subject to Shareholder Approvals and Regulatory Approvals and the Transaction is expected to close in 4Q 2021. More below the fold.For more information on M&amp;A rules and practices in Korea, please check: Quiddity Korea M&amp;A Guide 2020 

GC Cell - GC LabCell: Korean Biopharma Merger Trading Tight

South Korea

Green Cross LabCell Corp. is a biotechnology company that researches and develops cell therapy products.  The Company is also engaged in cell banking, clinical laboratory services, clinical trial, and bio-logistics services.

Price Gauge
52-week Range	0.00 - 0.00
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P/E	0.00
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Green Cross LabCell (144510 KS)

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This merger swap is very similar to the recent case of the GS merger swap. So, we are likely to face a rather juicy swap spread opening probably 2...

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GC Cell - GC LabCell: Korean Biopharma Merger Trading Tight

South Korean Biopharma companies GC Cell and GC Lab Cell are merging in an all-stock Deal. The companies have a combined market cap of ~US$1.5bn....

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Price Gauge

52-week Range

Market Cap (USDm)

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