Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

M&amp;A deals in the Aussie energy space continue.
<a href="https://www.smartkarma.com/entities/posco-international-corporation" target="_blank" data-smartkarma-citation="entities:5954:1" rel="noopener">Posco International Corporation (047050 KS)</a>, the trading arm of South Korea's mega-steel play <a href="https://www.smartkarma.com/entities/posco" target="_blank" data-smartkarma-citation="entities:208:1" rel="noopener">Posco (005490 KS)</a>, has been granted exclusive due diligence through to 5 November to bump its indicative Offer of A$4.40/share for natural gas producer <a href="https://www.smartkarma.com/entities/senex-energy-ltd" target="_blank" data-smartkarma-citation="entities:18390:1" rel="noopener">Senex Energy (SXY AU)</a>. 
PIC first approached Senex on the 2 September with a A$4.00/share Offer, then A$4.20 on the 27 August, before submitting an indicative proposal of A$4.40/share on the 2 September, which is a 40% premium to the 30-day VWAP on that day. 
PIC was granted due diligence on the 15 September. The DD extension is to provide PIC with additional time to assess a further revised proposal at a higher price.
Should a firm Offer transpire, it will be done via an off-market takeover with a 50.1% minimum acceptance condition. FIRB approval would also be a condition. 
Senex is open to other offers:
<blockquote>
The Senex Board believes it is in the best interests of its shareholders to continue to engage with POSCO International and will assess any proposal received on its merits
</blockquote>
The proposal follows ongoing deals for <a href="https://www.smartkarma.com/entities/oil-search-ltd" target="_blank" data-smartkarma-citation="entities:773:1" rel="noopener">Oil Search Ltd (OSH AU)</a> (<a href="https://skr.ma/jxkVJ" target="_blank" rel="noopener">Oil Search/Santos: PNG a Potential Party Pooper</a> ) and <a href="https://www.smartkarma.com/entities/woodside-petroleum-ltd" target="_blank" data-smartkarma-citation="entities:177:1" rel="noopener">Woodside Petroleum (WPL AU)</a> tilt for <a href="https://www.smartkarma.com/entities/bhp-group-ltd" target="_blank" data-smartkarma-citation="entities:147:1" rel="noopener">BHP Group (BHP AU)</a> O&amp;G ops (<a href="https://skr.ma/wsrxa" target="_blank" rel="noopener">If Woodside Buys BHP Petroleum for Scrip, There Will Be Flowback</a>). 
More below the fold.

M&amp;A deals in the Aussie energy space continue.
Posco International Corporation (047050 KS), the trading arm of South Korea's mega-steel play Posco (005490 KS), has been granted exclusive due diligence through to 5 November to bump its indicative Offer of A$4.40/share for natural gas producer Senex Energy (SXY AU). 
PIC first approached Senex on the 2 September with a A$4.00/share Offer, then A$4.20 on the 27 August, before submitting an indicative proposal of A$4.40/share on the 2 September, which is a 40% premium to the 30-day VWAP on that day. 
PIC was granted due diligence on the 15 September. The DD extension is to provide PIC with additional time to assess a further revised proposal at a higher price.
Should a firm Offer transpire, it will be done via an off-market takeover with a 50.1% minimum acceptance condition. FIRB approval would also be a condition. 
Senex is open to other offers:

The Senex Board believes it is in the best interests of its shareholders to continue to engage with POSCO International and will assess any proposal received on its merits

The proposal follows ongoing deals for Oil Search Ltd (OSH AU) (Oil Search/Santos: PNG a Potential Party Pooper ) and Woodside Petroleum (WPL AU) tilt for BHP Group (BHP AU) O&amp;G ops (If Woodside Buys BHP Petroleum for Scrip, There Will Be Flowback). 
More below the fold.

Korea / Special Situations, Clepsydra Capital

Sanghyun Park

Korea / Special Situations

Quantitative Analysis

First, let me tell you this. The worst may not yet be to come. But it also seems right that we are currently in a highly rare situation as well. The previous 5D yield of the KOSPI index hit -12.03% as of now. What does it mean? The odds that we are in this situation are 0.04% based on the last 30 years from 1990 to today.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/122/753/original/5.png?1584029598" class="editor-image img-responsive" data-smartkarma-image-id="122753"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/122/754/original/3.png?1584029617" class="editor-image img-responsive" data-smartkarma-image-id="122754"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/122/755/original/1.png?1584029629" class="editor-image img-responsive" data-smartkarma-image-id="122755"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/122/756/original/2.png?1584029635" class="editor-image img-responsive" data-smartkarma-image-id="122756"></figure>It is worth noting that the winning percentage in a situation like this for the next five trading days is a whopping 73%, and the average KOSPI index yield was 4.32%.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/122/759/original/4.png?1584030387" class="editor-image img-responsive" data-smartkarma-image-id="122759"></figure>

First, let me tell you this. The worst may not yet be to come. But it also seems right that we are currently in a highly rare situation as well. The previous 5D yield of the KOSPI index hit -12.03% as of now. What does it mean? The odds that we are in this situation are 0.04% based on the last 30 years from 1990 to today.It is worth noting that the winning percentage in a situation like this for the next five trading days is a whopping 73%, and the average KOSPI index yield was 4.32%.

Time for Capital Structure Basket Arbitrage in Korea? Target Names in Basket to Short & Long

Japan TMT Analyst

Pelham Smithers

Market Intel on Asian Tech with a Japan focus

Pelham Smithers Associates

Founded in 2009, Pelham Smithers Associates (PSA) provides market intelligence on Asian technology, focusing in particular on Japan. The industries covered by our team of specialists are: consumer electronics, telecomms, pharmaceuticals, internet, electronic parts and materials, automotive technology, retail and capital goods. 

Research is provided by the following:
Pelham Smithers: Macro, consumer electronics, telecoms & pharma
Joel Scheiman: Electronics materials / components
Julie Boote: Autos
Will Nestuk: Capital goods, machinery & transportation equipment parts
Thao Nguyen: eCommerce, internet content, marketing & advertising

There is a tendency to view <a href="https://www.smartkarma.com/entities/637" target="_blank" data-smartkarma-citation="entities:637:1">Toshiba (6502 JP)</a> as an extreme, but ultimately typical example of Japanese corporate culture (e.g. this well-worth reading Reuters article <a href="https://goo.gl/NEZqK9" target="_blank">https://goo.gl/NEZqK9</a> ) and by extension a warning to investors about the risks Japanese corporate culture pose. In as much as those elements of Japanese corporate culture - the secrecy, the deference to seniority, the subservience of shareholders to management, the shame resulting from the publication of a single mistake…

There is a tendency to view Toshiba (6502 JP) as an extreme, but ultimately typical example of Japanese corporate culture (e.g. this well-worth reading Reuters article https://goo.gl/NEZqK9 ) and by extension a warning to investors about the risks Japanese corporate culture pose. In as much as those elements of Japanese corporate culture - the secrecy, the deference to seniority, the subservience of shareholders to management, the shame resulting from the publication of a single mistake…

Toshiba: The Surprising Lack of Read-Across to the Rest of Japan Inc.

South Korea

Posco International Corporation is a general trading company.  The Company exports and imports steel, cement, crude oil, heavy machinery, automobile parts, and textiles.  Daewoo also manufactures synthetic fabrics for footwear, garments, and car seats, and operates a department store in Masan.

Posco International Corporation (047050 KS)

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Posco International Corporation (047050 KS)

Senex (SXY AU): Posco's Looming Offer

Given DD has been afforded, $4.40/share is approaching full value Currently trading just below terms. I think $4.60/share will garner board...

David Blennerhassett

Time for Capital Structure Basket Arbitrage in Korea? Target Names in Basket to Short & Long

First, let me tell you this. The worst may not yet be to come. But it also seems right that we are currently in a highly rare situation as well....

Sanghyun Park

Toshiba: The Surprising Lack of Read-Across to the Rest of Japan Inc.

There is a tendency to view Toshiba (6502 JP) as an extreme, but ultimately typical example of Japanese corporate culture (e.g. this well-worth...

Pelham Smithers Associates

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