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>There is no cancellation risk, regardless of where and how the ongoing proxy battle will be heading and unfolding. But there is a pro rata allocation risk, though.</li>
<li>Regarding tax, a tender event in Korea is treated as an over-the-counter trade. So transfer income tax is imposed.</li>
<li>SM provides shorting instruments necessary for arb trade, and the possibility of an arb opening coming out during tendering isn't completely dead, given the uncertainties surrounding the current proxy battle.</li>
</ul>


There is no cancellation risk, regardless of where and how the ongoing proxy battle will be heading and unfolding. But there is a pro rata allocation risk, though.
Regarding tax, a tender event in Korea is treated as an over-the-counter trade. So transfer income tax is imposed.
SM provides shorting instruments necessary for arb trade, and the possibility of an arb opening coming out during tendering isn't completely dead, given the uncertainties surrounding the current proxy battle.


Critical Details of Regulatory Filing for the SM Ent Tender Event

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<ul>
<li>We believe Dentium is an attractive stock to own right now. It has an excellent combination of strong growth in sales and profits and discounted valuations.</li>
<li>Driven by its strong share price appreciation in the past year, Dentium now has become a strong candidate for a potential inclusion in KOSPI 200 index in 2023.</li>
<li>There is a growing probability that Dentium could be targeted by corporate activists to pressure the company to cancel treasury shares and provide higher dividends. </li>
</ul>


We believe Dentium is an attractive stock to own right now. It has an excellent combination of strong growth in sales and profits and discounted valuations.
Driven by its strong share price appreciation in the past year, Dentium now has become a strong candidate for a potential inclusion in KOSPI 200 index in 2023.
There is a growing probability that Dentium could be targeted by corporate activists to pressure the company to cancel treasury shares and provide higher dividends. 


Dentium: An Undervalued Corporate Activist Target + Likely Inclusion Candidate for KOSPI 200 in 2023

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>For the month of January, four new deals (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$3bn.</li>
<li>The average premium for the new deals announced (or first discussed) in January was ~28%, which is distorted by the take under for <strong><a href="https://www.smartkarma.com/entities/esso-thailand-pcl" target="_blank" data-smartkarma-citation="entities:17717:1" rel="noopener">Esso Thailand (ESSO TB)</a></strong>.</li>
<li>This compares to the average premium for all deals in 2022 (106 deals), 2021 (165 deals), 2020 (158 deals), and 2019 (145 deals) of 41%, 33%, 31%, and 31% respectively.</li>
</ul>


For the month of January, four new deals (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$3bn.
The average premium for the new deals announced (or first discussed) in January was ~28%, which is distorted by the take under for Esso Thailand (ESSO TB).
This compares to the average premium for all deals in 2022 (106 deals), 2021 (165 deals), 2020 (158 deals), and 2019 (145 deals) of 41%, 33%, 31%, and 31% respectively.


(Mostly) Asia M&A, Jan 2023: Essential Metals, Relia Inc, Osstem Implant, Esso Thailand

<ul>
<li>We provide details of the Osstem Implant tender offer as well as Chairman Choi's children exchange of CB call options for BWs. </li>
<li>We believe that the majority of the minority shareholders in Osstem Implant are not likely to sell their shares at 190,000 won per share but hold on to it. </li>
<li>Over a longer time frame, Osstem's share price could reach higher levels driven by its improving sales and profit growth, deep valuation discount to global peers, and further M&amp;A fight. </li>
</ul>


We provide details of the Osstem Implant tender offer as well as Chairman Choi's children exchange of CB call options for BWs. 
We believe that the majority of the minority shareholders in Osstem Implant are not likely to sell their shares at 190,000 won per share but hold on to it. 
Over a longer time frame, Osstem's share price could reach higher levels driven by its improving sales and profit growth, deep valuation discount to global peers, and further M&amp;A fight. 


Osstem Implant: Details of Tender Offer & Chairman Choi's Children Exchange CB Call Options for BWs

<ul>
<li>The acquirer would cancel the deal unless at least 2.394M shares (15.4% of SO) were tendered. This is the minimum purchase quantity condition that will trigger a cancellation.</li>
<li>If the minimum purchase volume is exceeded, will there be a pro rata allocation risk? The answer is no. The acquirer will purchase all the tendered shares</li>
<li>The cancellation risk seems slim as only 15.4% of the SO should be tendered, which doesn't seem to be a challenging target.</li>
</ul>


The acquirer would cancel the deal unless at least 2.394M shares (15.4% of SO) were tendered. This is the minimum purchase quantity condition that will trigger a cancellation.
If the minimum purchase volume is exceeded, will there be a pro rata allocation risk? The answer is no. The acquirer will purchase all the tendered shares
The cancellation risk seems slim as only 15.4% of the SO should be tendered, which doesn't seem to be a challenging target.


Clarifications About Osstem Implant Tender Event

South Korea

Osstem Implant Co., Ltd. manufactures dental implant system. The Company also markets dental management software. Osstem Implant provides products for dental surgery and exports abroad.

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Osstem Implant (048260 KS)

Critical Details of Regulatory Filing for the SM Ent Tender Event

This post offers critical details of the regulatory filing about HYBE's tender offer to the shareholders of SM Entertainment.

Sanghyun Park

Dentium: An Undervalued Corporate Activist Target + Likely Inclusion Candidate for KOSPI 200 in 2023

There is a growing probability that Dentium could be targeted by corporate activists to pressure the company to cancel treasury shares and provide...

Douglas Kim

(Mostly) Asia M&A, Jan 2023: Essential Metals, Relia Inc, Osstem Implant, Esso Thailand

For the month of January, four new deals were discussed on Smartkarma with an overall announced deal size of ~US$3bn. The average premium for the...

David Blennerhassett

Osstem Implant: Details of Tender Offer & Chairman Choi's Children Exchange CB Call Options for BWs

We provide details of the Osstem Implant tender offer as well as Chairman Choi's children exchange of CB call options for BWs.

Douglas Kim

Clarifications About Osstem Implant Tender Event

This post clarifies the areas where the market is a bit confused in Osstem Implant (048260 KS)'s tender event and discusses the degree of...

Sanghyun Park

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