Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Stay long <a href="https://www.smartkarma.com/entities/benefit-one-inc" target="_blank" data-smartkarma-citation="entities:14502:1" rel="noopener">Benefit One (2412 JP)</a>. Dai-Ichi Life can pay more, if pushed on pricing. May not be huge, but it could be a few percent or even 10%. </li>
<li>
<a href="https://www.smartkarma.com/entities/hankook-company-co-ltd" target="_blank" data-smartkarma-citation="entities:19369:1" rel="noopener">Hankook &amp; Company (000240 KS)</a>'s family feud goes public. The public tender looks set to fail. Coal in stockings all-round.</li>
<li>If you had any <a href="https://www.smartkarma.com/entities/toyo-construction-co-ltd" target="_blank" data-smartkarma-citation="entities:1176:1" rel="noopener">Toyo Construction (1890 JP)</a> left over from the rally up to ¥1,300+, get out. There may be a better opportunity later, but not here.</li>
</ul>


Stay long Benefit One (2412 JP). Dai-Ichi Life can pay more, if pushed on pricing. May not be huge, but it could be a few percent or even 10%. 

Hankook &amp; Company (000240 KS)'s family feud goes public. The public tender looks set to fail. Coal in stockings all-round.
If you had any Toyo Construction (1890 JP) left over from the rally up to ¥1,300+, get out. There may be a better opportunity later, but not here.


Last Week in Event SPACE: Benefit One, Hankook, Toyo Construction, Hanwha, Tsuruha, Livent/Allkem

European Event-Driven Analyst

Jesus Rodriguez Aguilar

<ul>
<li>The Spanish Cabinet has agreed on the acquisition of up to 10% of the share capital of <a href="https://www.smartkarma.com/entities/telefonica-sa" target="_blank" data-smartkarma-citation="entities:21299:1" rel="noopener">Telefonica SA (TEF SM)</a> (c.€2.2 billion), higher than the 5% initially mentioned.</li>
<li>This should move the market as it represents 48 trading days. This also means that the Government will likely authorise the purchase of up to 9.9% by STC.</li>
<li>The Kingdom of Spain 10-y benchmark bond yield is 2.9%, while the 24e dividend yield of Telefonica is 8% (source: IBES), therefore the operation makes financial sense.</li>
</ul>


The Spanish Cabinet has agreed on the acquisition of up to 10% of the share capital of Telefonica SA (TEF SM) (c.€2.2 billion), higher than the 5% initially mentioned.
This should move the market as it represents 48 trading days. This also means that the Government will likely authorise the purchase of up to 9.9% by STC.
The Kingdom of Spain 10-y benchmark bond yield is 2.9%, while the 24e dividend yield of Telefonica is 8% (source: IBES), therefore the operation makes financial sense.


SEPI/Telefonica: Acquisition of a 10% Stake

<ul>
<li>The Korean Financial Services Commission and the Financial Supervisory Service held a press briefing, unveiling the comprehensive prohibition of short selling from the 6th November, until June 30th next year.</li>
<li>Recco or Ascendant for <a href="https://www.smartkarma.com/entities/hollysys-automation-technologies" target="_blank" data-smartkarma-citation="entities:26078:1" rel="noopener">Hollysys (HOLI US)</a>? Ascendant could easily get &gt;50% of shares out, and spill the board. Recco, with no shares held, looks to have a weaker hand. </li>
<li>
<a href="https://www.smartkarma.com/entities/sankyo-co-ltd" target="_blank" data-smartkarma-citation="entities:12385:1" rel="noopener">Sankyo (6417 JP)</a> is cheap. It will never trade at 20x expected PER because of the nature of the business; right now, on an ex-cash basis, it trades 1.6x ex-cash PER.</li>
</ul>


The Korean Financial Services Commission and the Financial Supervisory Service held a press briefing, unveiling the comprehensive prohibition of short selling from the 6th November, until June 30th next year.
Recco or Ascendant for Hollysys (HOLI US)? Ascendant could easily get &gt;50% of shares out, and spill the board. Recco, with no shares held, looks to have a weaker hand. 

Sankyo (6417 JP) is cheap. It will never trade at 20x expected PER because of the nature of the business; right now, on an ex-cash basis, it trades 1.6x ex-cash PER.


Last Week in Event SPACE: Korea's Short Selling, Hollysys, Sankyo, Descente

Telefonica Deutschland Holding / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/telefonica-sa" target="_blank" data-smartkarma-citation="entities:21299:1" rel="noopener">Telefonica SA (TEF SM)</a> surprised everyone with a €2.35/share voluntary cash offer for the minorities in <a href="https://www.smartkarma.com/entities/telefonica-deutschland-holding" target="_blank" data-smartkarma-citation="entities:21687:1" rel="noopener">Telefonica Deutschland Holding (O2D GR)</a>, 37.6% premium, 4.4x EV/Fwd EBITDA (vs.5.1x Telefonica), €1970 million value.</li>
<li>The premium is attractive, c.31% premium to median IBES consensus TP, so I believe the offer will succeed. There will be no additional acceptance period. Spread is +0.17%.</li>
<li>Telefonica will add 7% more leverage at a time it is seeking the opposite: on the cards are some sort of divestment of Virgin Media O2 or a dividend cut.</li>
</ul>



Telefonica SA (TEF SM) surprised everyone with a €2.35/share voluntary cash offer for the minorities in Telefonica Deutschland Holding (O2D GR), 37.6% premium, 4.4x EV/Fwd EBITDA (vs.5.1x Telefonica), €1970 million value.
The premium is attractive, c.31% premium to median IBES consensus TP, so I believe the offer will succeed. There will be no additional acceptance period. Spread is +0.17%.
Telefonica will add 7% more leverage at a time it is seeking the opposite: on the cards are some sort of divestment of Virgin Media O2 or a dividend cut.


Telefonica/Telefonica Deutschland Holding AG: Offer for Minorities

<ul>
<li>If you are still long the <a href="https://www.smartkarma.com/entities/hokuhoku-financial-group-inc" target="_blank" data-smartkarma-citation="entities:19006:1" rel="noopener">Financial Group (8377 JP)</a> from before, stay long.If you sold Hokuhoku from before, be long again, and buy on weakness</li>
<li>Disaster for arb players as AusSuper rewrites the record books as an investor class and shoots down Brookfield's sweetened Offer for <a href="https://www.smartkarma.com/entities/origin-energy-ltd" target="_blank" data-smartkarma-citation="entities:797:1" rel="noopener">Origin Energy (ORG AU)</a>.</li>
<li>
<a href="https://www.smartkarma.com/entities/kyocera-corp" target="_blank" data-smartkarma-citation="entities:753:1" rel="noopener">Kyocera (6971 JP)</a> announced Q2 results and lowered its full-year forecast. Then the CEO said it was "reconsidering" what to do with <a href="https://www.smartkarma.com/entities/kddi-corp" target="_blank" data-smartkarma-citation="entities:639:1" rel="noopener">KDDI (9433 JP)</a> shares (after an AGM disaster).</li>
</ul>


If you are still long the Financial Group (8377 JP) from before, stay long.If you sold Hokuhoku from before, be long again, and buy on weakness
Disaster for arb players as AusSuper rewrites the record books as an investor class and shoots down Brookfield's sweetened Offer for Origin Energy (ORG AU).

Kyocera (6971 JP) announced Q2 results and lowered its full-year forecast. Then the CEO said it was "reconsidering" what to do with KDDI (9433 JP) shares (after an AGM disaster).


Last Week in Event SPACE: Hokuhoku, Origin Energy, KDDI, BoJ

Spain

Telefonica S.A. provides telecommunications services mainly to countries in Europe and Latin America.  The Company offers fixed-line and mobile telephone, Internet, and data transmission services to residential and corporate customers.

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Telefonica SA (TEF SM)

Last Week in Event SPACE: Benefit One, Hankook, Toyo Construction, Hanwha, Tsuruha, Livent/Allkem

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

SEPI/Telefonica: Acquisition of a 10% Stake

The Spanish government plans to acquire up to 10% of Telefonica, a higher percentage than initially mentioned, to counterbalance the acquisitions...

Jesus Rodriguez Aguilar

Last Week in Event SPACE: Korea's Short Selling, Hollysys, Sankyo, Descente

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Telefonica/Telefonica Deutschland Holding AG: Offer for Minorities

Telefonica surprises with a cash offer for Telefonica Deutschland, offering a 38% premium and potentially adding more leverage. The offer should...

Jesus Rodriguez Aguilar

Last Week in Event SPACE: Hokuhoku, Origin Energy, KDDI, BoJ

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

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52-week Range

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Last Week in Event SPACE: Benefit One, Hankook, Toyo Construction, Hanwha, Tsuruha, Livent/Allkem

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

SEPI/Telefonica: Acquisition of a 10% Stake

​The Spanish government plans to acquire up to 10% of Telefonica, a higher percentage than initially mentioned, to counterbalance the acquisitions...

Jesus Rodriguez Aguilar

Last Week in Event SPACE: Korea's Short Selling, Hollysys, Sankyo, Descente

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Telefonica/Telefonica Deutschland Holding AG: Offer for Minorities

​Telefonica surprises with a cash offer for Telefonica Deutschland, offering a 38% premium and potentially adding more leverage. The offer should...

Jesus Rodriguez Aguilar

Last Week in Event SPACE: Hokuhoku, Origin Energy, KDDI, BoJ

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

The Spanish government plans to acquire up to 10% of Telefonica, a higher percentage than initially mentioned, to counterbalance the acquisitions...

Telefonica surprises with a cash offer for Telefonica Deutschland, offering a 38% premium and potentially adding more leverage. The offer should...