This weekly newsletter pulls together summaries of the top ten most-read Insights across Event-Driven and Index Rebalance on Smartkarma.
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1. Con Aero Tech (232 HK) Should (Almost) Double At The Bell
- After SOE-backed small plane engine maker Continental Aerospace Technologies (232 HK)‘s share price popped on the 26th May, it confirmed a possible sale that could have Takeovers Code implications.
- Late Friday (5th June) CAT confirmed it has entered into an SPA to sell its core business, potentially leading to a large cash distribution (HK$0.419-HK$0.436/share), and subsequent winding up.
- The SPA requires reg approvals and a Scheme-like vote. 46.4% of the register is supportive. Additional dividends expected from the sale of property. Get involved.
2. Merger Arb Mondays (08 Jun) – ENN, Con Aero, Skyworth, Kakaku, Shinko Shoji, Cygnus, Tourism Hldgs
- I summarise the latest spreads and newsflow for the merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, the Philippines, Thailand, and Chinese ADRs.
- Highest spreads: Continental Aerospace Technologies (232 HK), Skyworth (751 HK), ENN Energy (2688 HK), Qoria (QOR AU), Humm Group (HUM AU), Changhong Jiahua (3991 HK), Tourism Holdings (THL NZ).
- Lowest spreads: Australian Strategic Materials (ASM AU), Taiyo Holdings (4626 JP), Magnetic Resources Nl (MAU AU), Kakaku.com Inc (2371 JP), Emmerson Resources (ERM AU), Shinko Shoji (8141 JP).
3. Curator’s Cut: Memory’s Hold on the KOSPI, Counting Down to SpaceX & Iron Ore’s Cold Snap
- Welcome to Curator’s Cut – a fortnightly roundup of standout themes from the 1,500+ insights shared on Smartkarma. We’re back after a brief one-issue hiatus.
- In this cut, we revisit memory’s grip on the record-breaking KOSPI, count down to the record-setting SpaceX (SPCX US) IPO, and unpack cooling iron ore prices.
- Want to dig deeper? Comment or message with the themes you’d like to see highlighted next.
4. StubWorld: Big Moves In “Kings”
- Yesterday, Kingboard (148 HK) gained 25% and ~67%-held Kingboard Laminates (1888 HK) 13%. Unrelated, Kingsoft (3888 HK) gained ~10% and 51.4%-held Beijing Kingsoft Office Software (688111 CH) just 0.9%.
- Preceding my comments on the “Kings” – are the current setup/unwind tables for Asia-Pacific Holdcos.
- These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.
5. Con Aero Tech (232 HK): Q&A With The FA
- Back on the 5th June, SOE-backed Continental Aerospace Technologies (232 HK)‘s entered into an SPA to sell its core business, potentially leading to a substantial cash distribution.
- The SPA requires reg approvals and a Scheme-like vote. 46.4% of the register is supportive. Separately, additional dividends are expected from the sale of property. And possibly cash on hand.
- I had a number of questions concerning the transaction – as did many readers. This afternoon I pinned down a one-on-one with the FA to the Purchaser.
6. Con Aero Tech (232 HK): Q&A With The Other FA
- Back on the 5th June, SOE-backed plane engine maker Continental Aerospace Technologies (232 HK)‘s entered into an SPA to sell its core business, potentially leading to a substantial cash distribution.
- In Con Aero Tech (232 HK): Q&A With The FA, I discussed my one-on-one with the FA to the Purchaser.
- In this insight, I discuss my one-on-one with the FA to the Seller – or Con Aero Tech.
7. Nippon Sheet Glass (5202 JP): Widening Spread Ahead of the 26 June Vote
- On 24 March, Nippon Sheet Glass (5202 JP) outlined its restructuring plan to create a new NSG group. The minority cash-out price is JPY500. The AGM is on 26 June.
- The gross spread has increased to 6.4% due to heightened vote risk from the significant re-rating of peers and the decent FY2026 results on 11 May.
- However, the AGM vote remains low-risk as no activist has emerged, key shareholders are supportive, and the leverage remains precarious.
8. Nippon Dry-Chemical (1909 JP): Neuberger Starts an Activist Campaign, but Success Is Uncertain
- Neuberger issued a letter concerning the unfair terms of the Alsok (2331 JP) and Carlyle offer for Nippon Dry Chemical (1909 JP). The first closing date is 29 June.
- Neuberger, the second-largest shareholder, highlights six issues with the tender offer. While Neuberger’s criticisms have merit, the Board could credibly refute most of them.
- The probability of a bump is low, as Neuberger cannot block the tender, the offer is attractive on several measures, and ALSOK/Carlyle can use the playbook to counter activists.
9. Steadfast (SDF AU): Amwins’ (Possibly Opportunistic) A$6/Share NBIO
- As discussed in Steadfast (SDF AU): Suitors Circle As Share Price Languishes After Internal Complaint, insurance play Steadfast (SDF AU) was reportedly attracting PE interest, such as Blackstone.
- Steadfast has now entered into a process deal with Amwins and Dragoneer at A$6/share by way of a Scheme, a 51.9% premium to undisturbed.
- Amwins/Dragoneer have been provided with eight weeks of exclusive due diligence access. A firm Offer will requires FIRB and OIO signing off.
10. On James Hardie (JHX AU)’s Class Action Suit
- This morning (9th June), building products outfit James Hardie Industries Plc (JHX AU) announced a shareholder class action filing.
- The class action initiated by law firm Maurice Blackburn – see attached at bottom – currently involves seven group members.
- James Hardie is being accused of misleading the market, and the proceeding is brought on behalf of shareholders who acquired shares between 21st May 2025 and 19th August 2025.
