Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Back June last year, Yeom Tae-soon and family sought to take apparel manufacturer <a href="https://www.smartkarma.com/entities/shinsung-tongsang-co-ltd" target="_blank" data-smartkarma-citation="entities:4107:1" rel="noopener">Shinsung Tongsang (005390 KS)</a> private at ₩2,300, but fell short of the 95% delisting threshold.</li>
<li>The family have returned to the well with a more respectable ₩4,100/share Offer, a 35.8% premium to undisturbed, and optically, a fair price. The family and related parties hold 83.87%.</li>
<li>
Should the family fall short of the 95% threshold, again, they may seek delisting through a comprehensive stock exchange.</li>
</ul>


Back June last year, Yeom Tae-soon and family sought to take apparel manufacturer Shinsung Tongsang (005390 KS) private at ₩2,300, but fell short of the 95% delisting threshold.
The family have returned to the well with a more respectable ₩4,100/share Offer, a 35.8% premium to undisturbed, and optically, a fair price. The family and related parties hold 83.87%.

Should the family fall short of the 95% threshold, again, they may seek delisting through a comprehensive stock exchange.


Shinsung Tongsang (005390 KS): The Family Reloads At ₩4,100/Share

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

<ul>
<li>On 9 June, Shinsung Tongsang (005390 KS) announced a second tender offer after a failed attempt last year. Tender offer price is 4,100 won per share.</li>
<li>The tender offer price this time (second try) is much higher than recent prices, making it much more likely that the tender offer will be successful.</li>
<li>From 2019 to 2023, Top Ten's sales nearly tripled whereas Uniqlo Korea's sales declined by about 33% in the same period.</li>
</ul>


On 9 June, Shinsung Tongsang (005390 KS) announced a second tender offer after a failed attempt last year. Tender offer price is 4,100 won per share.
The tender offer price this time (second try) is much higher than recent prices, making it much more likely that the tender offer will be successful.
From 2019 to 2023, Top Ten's sales nearly tripled whereas Uniqlo Korea's sales declined by about 33% in the same period.


Shinsung Tongsang: A Second Try at Tender Offer and Privatization

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

<ul>
<li>The review period for the September rebalance of the KOSPI Size Indices commenced on 1 June and will end on 31 August.</li>
<li>Nearing halfway in the review period, we forecast 53 migrating stocks. Among new listings, 1 stock could be added to LargeCap, 3 to MidCap and 1 to SmallCap.</li>
<li>Two potential downward migrations could be deleted from a global index in August. The new listing that is a potential LargeCap add could be added to a globalindex in September.</li>
</ul>


The review period for the September rebalance of the KOSPI Size Indices commenced on 1 June and will end on 31 August.
Nearing halfway in the review period, we forecast 53 migrating stocks. Among new listings, 1 stock could be added to LargeCap, 3 to MidCap and 1 to SmallCap.
Two potential downward migrations could be deleted from a global index in August. The new listing that is a potential LargeCap add could be added to a globalindex in September.


KOSPI Size Indices: Overlaps Between Active & Passive Flows

<ul>
<li>Shinsung Tongsang shares rose 10% to 2,510 won today after it was announced that the tender offer failed. Basically, the tender offer failed because the tender offer price was too low. </li>
<li>Only 26% of the 31.664 million shares responded to the tender offer. Accordingly, the shareholding ratio of Chairman Yeom and his related parties increased from 77.98% to 83.88%. </li>
<li>Top Ten has benefited from executing its strategy well (such as employing Lee Na-Young in advertisements to grab customers from Uniqlo). Overall, we remain positive on Shinsung Tongsang.</li>
</ul>


Shinsung Tongsang shares rose 10% to 2,510 won today after it was announced that the tender offer failed. Basically, the tender offer failed because the tender offer price was too low. 
Only 26% of the 31.664 million shares responded to the tender offer. Accordingly, the shareholding ratio of Chairman Yeom and his related parties increased from 77.98% to 83.88%. 
Top Ten has benefited from executing its strategy well (such as employing Lee Na-Young in advertisements to grab customers from Uniqlo). Overall, we remain positive on Shinsung Tongsang.


Shinsung Tongsang: Tender Offer Fails and How to Take Away Customers From Uniqlo

<ul>
<li>On the<a href="https://www.bdapartners.com/transaction/bda-advises-praxis-on-sale-of-businesson-to-skylake/" target="_blank" rel="noopener"> 25th July</a>, SkyLake Equity Partners acquired a 46.9% stake from Praxis Capital Partners in <a href="https://www.smartkarma.com/entities/businesson-communication-co-ltd" target="_blank" data-smartkarma-citation="entities:26040:1" rel="noopener">BusinessOn Communication (138580 KS)</a>, Korea’s leading B2B SaaS company; plus 24.3% from BusinessOn's management. </li>
<li>SkyLake has now launched a Tender Offer for 28.94% of BusinessOn. The Tender offer price is ₩15,849/share.</li>
<li>Super clean deal. SkyLake will acquire all shares tendered. There is no minimum tendering % condition. </li>
</ul>


On the 25th July, SkyLake Equity Partners acquired a 46.9% stake from Praxis Capital Partners in BusinessOn Communication (138580 KS), Korea’s leading B2B SaaS company; plus 24.3% from BusinessOn's management. 
SkyLake has now launched a Tender Offer for 28.94% of BusinessOn. The Tender offer price is ₩15,849/share.
Super clean deal. SkyLake will acquire all shares tendered. There is no minimum tendering % condition. 


BusinessOn Communication (138580 KS): SkyLake's Delisting Offer

South Korea

Shinsung Tongsang Co., Ltd. designs, manufactures, and sells ladies' and men's garments.  The Company's products include shirts, sweaters, jackets, suits, pants, and skirts.  Shinsung Tongsang markets its products under the brand names such as Union Bay, Olzen, and Ziozia and supplies them to JC Penney, Sears, and Target. In addition, the Company operates construction business.

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Shinsung Tongsang (005390 KS)

Shinsung Tongsang: A Second Try at Tender Offer and Privatization

On 9 June, Shinsung Tongsang (005390 KS) announced a second tender offer after a failed attempt last year. Tender offer price is 4,100 won per share.

Douglas Kim

KOSPI Size Indices: Overlaps Between Active & Passive Flows

There could be 53 migrations for the KOSPI Size Indices in Sep. Among new listings, there could be 1 LargeCap add and 3 MidCap adds. There are 2...

Brian Freitas

Shinsung Tongsang: Tender Offer Fails and How to Take Away Customers From Uniqlo

Shinsung Tongsang shares rose 10% to 2,510 won today after it was announced that the tender offer failed. Basically, the tender offer failed...

Douglas Kim

BusinessOn Communication (138580 KS): SkyLake's Delisting Offer

Trading (expectedly) tight at a gross spread of 0.7% - before taking into account the securities tax. Not much juice for arbitrageurs. For LOs: if...

David Blennerhassett

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