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. Sept 22 MTD Opposition Raises Oct 21 Survival Odds, Boosting Hynix ADR Expansion Incentive
- Sept. 22 Opposition largely recycles the CAC, but its January 2026 customer vetting logic strengthens MTD survival odds, keeping Hynix as the key litigation focus.
- The January 2026 customer vetting point makes Hynix’s need to double down on its HBM transition narrative even more critical, potentially strengthening the case for ADR expansion.
- Regulatory approval remains key, but political and strategic incentives increasingly support ADR expansion, potentially making Hynix ADR arb a key trade setup from mid October.
2. [Japan M&A/Activism] Kobayashi Pharma (4967) Gets Buyout Proposal
- Last night, news came out that Kobayashi Pharmaceutical Co (4967 JP) had received a ~¥500bn buyout proposal from a PE Fund consortium of CVC, NSSK, and the founding family.
- Kobayashi was at the center of a beni koji (red rice yeast) supplements contamination scandal revealed in 2024. The Chairman and CEO from the family resigned.
- Activist Oasis Management built a stake 2+yrs ago and have steadily increased it to 14%. They want the founding family influence out. This isn’t as easy as one likes.
3. Kobayashi Pharma (4967 JP): CVC/NSSK Buyout Rumour Faces an Oasis Hurdle
- CVC and NSSK are reportedly proposing a buyout of Kobayashi Pharmaceutical Co (4967 JP) worth over JPY500bn, possibly with the founding family. That implies JPY6,406 a share, a 9% premium.
- While the offer appears attractive relative to precedent and peer multiples, Oasis, the largest shareholder, is unlikely to back it.
- At the rumoured offer, Oasis will get a 17% return on its average cost, which is modest. The Taisho privatisation precedent suggests Oasis will push for a higher offer.
4. IDP Education (IEL AU): Blackstone’s Offer Rejection Justified, Third Approach Likely
- In response to an AFR article, IDP Education (IEL AU) disclosed that it rejected a non-binding proposal from Blackstone (BX US) at A$2.50 (received on 9 September).
- The offer is light on several metrics. Based on its weighted-average purchase price, Southeastern (which has quickly grown to be the largest shareholder) would need a A$3.00+ offer.
- Several factors suggest that Blackstone is likely to return with at least a third offer. An offer of at least A$3.00 is required to pressure the Board to engage.
5. StubWorld: Prosus Is Still A Buy
- Prosus NV (PRX NA) is still coming up “cheap” on my monitor versus Tencent (700 HK).
- Preceding my comments on Prosus/Tencent/Naspers (NPN SJ) 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%.
6. IDP Education (IEL AU): Blackstone’s Cheeky Offers As Pricing Touch A Decade-Plus Low
- Since its share price peaked in 4Q21, IDP Education (IEL AU), a multinational education services outfit, has fallen ~95%.
- IDP has faced pressure from immigration/student visa caps and competing English language tests for students and immigrants. Plus, IDP has never recovered from Covid.
- That share price decline was not lost on Blackstone, which has tabled two NBIOs (the last at A$2.50/share), both of which have been rightfully rejected. Definitely scope for a re-bid.
7. Global Lithium (GL1 AU): Titan’s Binding Scheme, an Uncertain MinRes Vote
- Global Lithium Resources Ltd (GL1 AU) entered into a scheme implementation deed with Titan at A$1.15 per share, a 72.9% premium to the undisturbed price.
- Regulatory approvals (FIRB, ACCC) are low-risk. Barring Mineral Resources (MIN AU), there is little doubt that the remaining substantial shareholders will be supportive.
- While MinRes will crystallise a material loss at the offer price, it is unlikely to interfere, as it recently stated that it does not want further exposure to lithium.
8. Global Lithium (GL1 AU): Trading Wide To Titan’s A$1.15/Share Scheme
- Mineral Resources (MIN AU)-backed Aussie lithium play Global Lithium Resources Ltd (GL1 AU), has entered into a Scheme with UAE-backed Titan Mining.
- Titan is offering $1.15/share, in cash, for each GL1 share, or a 73% premium to undisturbed. Titan is also providing GL1 with a loan to develop the Manna Lithium Project.
- GL1 directors, holding 12.5%, are supportive. The Scheme meeting is expected to be held in December. The Scheme requires FIRB & ACCC signing off. Expect scrutiny.
9. Merger Arb Mondays (21 Sep) – Kadoya, Leopalace21, Kakaku, Skyworth, Z Fin, OFX, Peet, Cleanaway
- I summarise the latest spreads and newsflow for the merger arb situations covered across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, the Philippines, Thailand, and Chinese ADRs.
- Highest spreads: Skyworth (751 HK), OFX Group (OFX AU), Z Fin (1168 HK), Peet Ltd (PPC AU), Atlantic Lithium (A11 AU), Tourism Holdings (THL NZ), Cleanaway Waste Management (CWY AU).
- Lowest spreads: Kadoya Sesame Mills (2612 JP), Leopalace21 Corp (8848 JP), Carnaby Resources (CNB AU), Kakaku.com Inc (2371 JP), Accent Group (AX1 AU), FleetPartners Group (FPR AU).
10. Christian Dior: Tailoring the LVMH Hedge
- Arnault family proposes a cash OPR at 95% of CDI’s look-through NAV, based on LVMH’s one-month VWAP ahead of the December EGM.
- At €425.40, CDI trades at 91.7% of current NAV, versus the proposed 95% exit level, implying 3.6% gross upside at current LVMH prices.
- Long CDI / short ~1.11 LVMH hedges most of the initial market exposure, with the short reduced progressively as the December VWAP fixes.
