Event-Driven

Nidec Corp (6594 JP) in late December proposed an unsolicited takeover of Makino Milling Machine Co (6135 JP), with a 3-month delay before launching a Tender Offer.
Makino has asked for an extension to the start. Nidec has said no. Makino is going about this the wrong way. Makino needs to assume Nidec thought this through.
Makino needs to open up the process to other bidders, and investors can help.

A/H Premium Tracker (To 17 Jan 2025): AH Premia Fall Further, Lowest Avg Premium in 5yrs

AH Premia are lower over the last few weeks of holiday and this past week of heavy SOUTHBOUND buying on telcos, banks, brokers, insurers, tech, and airlines.
The average AH Premium across all pairs is now the lowest it has been in five years.
The VERY WIDE Tech spreads bifurcated. SMIC (981) and Shanghai Fudan Microelectric (1385) both continued strongly. China Rail Signal (3969) and Flat Glass (6865) widened again.

Last Week In Event SPACE: Shanghai Henlius, Malaysia Airports, Kokusai Electric, Smart Share

LVC sits a blocking stake ahead of Shanghai Henlius Biotech (2696 HK)‘s shareholder vote on the 22nd Janaury. I’ve yet to see a solid rationality why they would block.
Malaysia Airports Holdings (MAHB MK)extends the closing date to the 24th January. Shares held plus tendering is currently 86.18%. This is done.
Kokusai Electric (6525 JP) was IPOed in September 2023. Lockup expiry is next week, and there is a likely large index event in ~10 weeks

Insignia Financial (IFL AU): CC Capital Bumps, Next Move Bain

Insignia Financial (IFL AU) disclosed a revised non-binding privatisation offer from CC Capital at A$4.60, a 7.0% premium compared to its previous A$4.30 offer and Bain’s A$4.30 offer.
While the revised CC Capital offer is attractive compared to historical trading ranges, there remains valuation headroom for Bain to engage in a bidding war.
The presence of several substantial shareholders facilitates a bidding war. The board should provide both bidders with due diligence access to promote the auction.

HK Connect SOUTHBOUND Flows (To 17 Jan 2025); Again Big Net Buying by SB, Again on Tech

SOUTHBOUND gross trading activity was again not stronger per day than the previous several weeks, but SB Net Buying was again BIG. Given the change in Tencent, remarkable even.
The story was follow-through, but SMIC and Xiaomi were also big buys. This is shaping up to be a “let’s buy what US Persons cannot” moment.
No sectors saw net selling through CCASS data five days to Weds. Top 10 activity was quite concentrated this week. Very few stray names.

Quiddity Leaderboard CSI Medical Jun 25: 1-5x ADV to Trade; Sector-Neutral Rebal Trade Idea Inside

CSI Medical Service represents the top 50 largest and most-liquid stocks involved in medical devices, medical care, medical informatization, and other medical theme from the Shanghai, Shenzhen and Beijing Exchanges.
In this insight, we take a look at the potential ADDs and DELs leading the race for the semiannual index rebal event in June 2025.
We expect up to four ADDs and four DELs for the CSI Medical Service index during this index review event based on the latest available data.

GA Pack (468 HK): Shandong Xinjufeng’s Offer on the Cusp of Being Declared Unconditional

Greatview Aseptic Packaging (468 HK)’s offer from Shandong Xinjufeng Technology Packaging (301296 CH) is HK$2.65 with a 50% minimum acceptance condition. The first closing date is 21 January.
The Board has recommended that shareholders not accept. However, based on CCASS data, including acceptances, Shandong Xinjufeng’s shareholding was 46.41% of outstanding shares as of 17 January.
Absent an unlikely competing offer, the offer is on the cusp of being declared unconditional. At the last close and 4 February payment, the gross/annualized spread is 3.1%/128%.

Quiddity Leaderboard STAR 50/100 Mar 25: LONGs Up ~12% Vs SHORTs in a Month; More to Come

STAR 50 Index is a tech-focused, blue-chip index in Mainland China which tracks the top 50 largest and most liquid names in the STAR market of the Shanghai Stock Exchange.
STAR 100 index tracks the next 100 names (51st-150th ranks) and it represents the mid-cap segment of the STAR market.
In this insight, we take a look at the potential ADDs/DELs for the STAR 50 and STAR 100 indices for the March 2025 index rebal event.

(Mostly) Asia-Pac M&A: Jamco, AVJennings, Insignia Financial, Advanced Info Service/Thaicom

I tally 51 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. I’ve yet to see a solid rationality why they would block.
One new deal was discussed this week: Bain’s Tender Offer for Jamco Corp (7408 JP). Ho Bee Land Ltd (HOBEE SP) also countered for AVJennings Ltd (AVJ AU).
Key updates/news took place on: Insignia Financial (IFL AU), Lifestyle China (2136 HK), and Advanced Info Service (ADVANC TB)/Thaicom Pcl (THCOM TB).

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Jan 18

Daily Brief Event-Driven: Insignia Financial (IFL AU): Bumpity Bumpity. Expect Bain To Match – Or Exceed – CC Capital’s Terms and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Insignia Financial (IFL AU): Bumpity Bumpity. Expect Bain To Match – Or Exceed – CC Capital’s Terms
EQD | Samsung Electronics – How to Position Amid a Plethora of Catalysts
Event Driven: Shankara Building Products, A Demerger Play
Macromill (3978 JP): CVC Bumps to JPY1,250, but the Offer Remains Light
Flagging the Hanwha Ocean CB Conversion Risk (20% of Shares Out)

Insignia Financial (IFL AU): Bumpity Bumpity. Expect Bain To Match – Or Exceed – CC Capital’s Terms

After CC Capital waded in on the 6th January with a A$4.30/share NBIO for wealth manager Insignia Financial (IFL AU), trumping Bain’s A$4.00/share proposal, Bain subsequently matched CC Capital’s terms.
CC Capital has now lifted is indicative Offer to A$4.60/share, a ~50% premium to undisturbed. Time for IFL to engage. And for Tanarra to be supportive.
And Bain? I expect them to match CC Capital’s terms, again; if not a small premium.

EQD | Samsung Electronics – How to Position Amid a Plethora of Catalysts

By John Ley

Samsung Electronics stock has been an underperformer outright and also relative to Kospi200 as an overhang of catalysts has weighed on performance.
Implied vols are at the 88th percentile over the last 3 years and are at the top of their range relative to Kospi200.
We recommend 4 different ways to position in front of these catalysts and the large stock buy-back that was announced in November.

Event Driven: Shankara Building Products, A Demerger Play

By Nimish Maheshwari

Shankara Building Products L (SHANKARA IN) plans to demerge its steel manufacturing and building materials marketplace, enabling each business to operate independently with tailored leadership and capital allocation strategies.
This separation allows for targeted expansions in non-steel product lines and dedicated manufacturing improvements, potentially raising margins and fueling profitable growth in India’s booming construction market.
Focused leadership, improved transparency, and strategic capital deployment could enhance investor confidence, offering significant upside as Shankara refocuses on high-growth segments and streamlines its operations post-demerger.

Macromill (3978 JP): CVC Bumps to JPY1,250, but the Offer Remains Light

Macromill, Inc (3978 JP) disclosed a revised tender offer from CVC at JPY1,250, an 8.7% premium to the previous JPY1,150 offer. The offer has been declared final.
The revised offer is reasonable compared to historical trading ranges. Since the announcement of the offer, the share price has never exceeded it.
CVC seeks an irrevocable from Oasis, but Oasis has several reasons to ignore the overtures. Due to the high required acceptance rate, a gross spread of 0.2% is unattractive.

Flagging the Hanwha Ocean CB Conversion Risk (20% of Shares Out)

KEXIM ignoring this premium could be a breach of duty, making Hanwha Ocean a prime short play. With 20% of shares, past cases suggest a 5-10% pullback.
This play’s tougher than HMM’s. Without step-ups, timing the conversion is tricky. Early redemption’s unlikely, so the focus is on when KEXIM pulls the trigger on the conversion.
No hints from KEXIM on the CB conversion yet, so loading up aggressively could be risky. We’ll likely need to wait for a signal from KEXIM before jumping in.

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Jan 17

Daily Brief Event-Driven: Henlius (2696 HK): So and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Henlius (2696 HK): So, When Was The Last Time A PE/VC Outfit Blocked A Deal?
Quiddity Leaderboard CSI 300/500 Jun 25: Large Flows; Some Inflow Names Could Outperform Index
Quiddity Leaderboard ChiNext & ChiNext 50 Jun 25: Great Momentum for the Exp ADDs Vs Exp DELs Trade
Lifestyle China (2136 HK): Lau’s Scheme – The Premium Is Still Wrong. And Now Final
Key Info We Need to Know About Boosting Predictability of Dividend Record Dates in Korea
Lifestyle China (2136 HK): Thomas Lau Bumps, but the Offer Remains Light
Align Partners Goes Activist on Coway
Quiddity Leaderboard F100/F250 Mar 25: Mega Addition for Coke & Multiple Intra-Review Changes Likely
Smart Share Global’s Privatization Proposal: Evaluating the 20% Spread and Potential Offer Increase
Liquid Universe of European Ordinary and Preferred Shares: January’25 Report

Henlius (2696 HK): So, When Was The Last Time A PE/VC Outfit Blocked A Deal?

You might have to go all the back to Guoco Group Ltd (53 HK)‘s 2012/2013 unconditional cash offer, which was ostensibly blocked by First Eagle AND Elliott Advisors.
Otherwise, it’s slim pickings. Past Schemes or Tender Offers arguably failed as minorities were simply not supportive. There are exceptions, like Soho China (410 HK) and TCM (570 HK)
IF LVC wish to remain active in this space/region, they appear to be going about it in a counterproductive way. I still don’t understand why they would want to block.

Quiddity Leaderboard CSI 300/500 Jun 25: Large Flows; Some Inflow Names Could Outperform Index

CSI 300 represents the 300 largest stocks by market cap and liquidity from the Shanghai and Shenzhen Exchanges. CSI 500 is the next 500 names.
In this insight, we take a look at the potential ADDs and DELs leading the race for the semiannual index rebal event in June 2025.
Currently, we see 6 ADDs/DELs for the CSI 300 index and 50 ADDs/DELs for the CSI 500 index.

Quiddity Leaderboard ChiNext & ChiNext 50 Jun 25: Great Momentum for the Exp ADDs Vs Exp DELs Trade

The ChiNext index represents the performance of the 100 largest and most liquid A-share stocks listed on the ChiNext Market of the Shenzhen Stock Exchange.
The ChiNext 50 index is a subset of the ChiNext Index and it consists of the top 50 names in the ChiNext index with the highest daily average turnover.
We see 10 changes for the ChiNext index and 5 changes for the ChiNext 50 index in the next index rebal event. Combined it is about US$1bn to trade one-way.

Lifestyle China (2136 HK): Lau’s Scheme – The Premium Is Still Wrong. And Now Final

Back on the 6th December 2024, Lifestyle China (2136 HK), a PRC department store operator, announced a Scheme from Thomas Lau, its chairman/CEO and major shareholder (74.91%, including concert parties).
The HK$0.913 Offer price was miserly 21.7% premium to last close. But not declared final.
The Offer deserved a bump, and Lau has obliged. However, the revised HK$0.98/share bid, a 30.6% premium to undisturbed, remains underwhelming. Lau has declared terms final.

Key Info We Need to Know About Boosting Predictability of Dividend Record Dates in Korea

Major banks, Hyundai Motor, POSCO Holdings, and companies like HMM, which updated their articles, will likely set dividend record dates pre-AGM in the mid-to-late February window.
Track backwardation in March futures for mispricings. Companies will likely follow last year’s playbook: AGM in mid-to-late March, record date 3–4 weeks prior, announcement 2 weeks ahead.
Opportunity lies in the March futures basis spread between February contract and record date announcement. Watch those for potential dividend hikes and futures mispricing ahead.

Lifestyle China (2136 HK): Thomas Lau Bumps, but the Offer Remains Light

Lifestyle China (2136 HK) disclosed a revised offer from Mr Thomas Lau at HK$0.98 per share, a 7.3% premium to the previous HK$0.913 offer. The offer has been declared final.
The bump was unsurprising. Crucially, the shares have traded above the revised offer on 20 of the 25 trading days since the previous offer was announced.
The revised offer remains light, and minorities remain unimpressed. The high AGM minority participation rates remain a vote risk. Head for the exit as the shares are trading at terms.

Align Partners Goes Activist on Coway

By Douglas Kim

After the market close on 16 January, it was reported that Align Partners started to go activist on Coway Co Ltd (021240 KS).
Align Partners sent a public letter to Coway demanding improvements to shareholder returns and measures to enhance the independence of the board of directors.
The combination of higher shareholder returns, low valuations, and Align Partners putting further activist pressure are likely to lead to continued outperformance of Coway relative to KOSPI this year.

Quiddity Leaderboard F100/F250 Mar 25: Mega Addition for Coke & Multiple Intra-Review Changes Likely

In this insight, we take a look at the potential index changes for the F100 and F250 indices in the run-up to the March 2025 index rebal event.
We see up to four M&A-related intra-review changes in the run up to the March 2025 review.
Our latest estimates suggest there could be one regular change for the F100 index and one change for the F250 index during the March 2025 rebalance.

Smart Share Global’s Privatization Proposal: Evaluating the 20% Spread and Potential Offer Increase

By Dalius Tauraitis

Smart Share Global received a non-binding privatization proposal at $1.25/ADS, with a 20% spread after fees.
The buyer group holds 16% economic interest and 64% voting power; Trustar Capital’s involvement signals deal commitment.
EM’s power bank rental business is breakeven; cashflow positive mainly due to $440m cash pile interest income.

Liquid Universe of European Ordinary and Preferred Shares: January’25 Report

Since mid-December, share-price spreads have generally tightened across European liquid universe of ordinary and preferred shares (8 have widened, 11 tightened) with few changes in the trends.
Telecom Italia savers are trading at 18.5% premium to ords; Handelsbanken B at 32.4% premium to A. The discount of Grifols B has tightened, some await a comeback from Brookfield.
Recommended trades long preferred / short ordinary shares: Atlas Copco, Grifols SA, Media-for-Europe. Recommended trades long ordinary / short preferred shares: Henkel, Roche, SSAB Svenska Stal, Telecom Italia.

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Jan 16

Daily Brief Event-Driven: Murata Manufacturing (6981 JP) – No Immediate Passive Buying Could Lead to More Weakness and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Murata Manufacturing (6981 JP) – No Immediate Passive Buying Could Lead to More Weakness
Murata Mfg (6981) Accelerated Overseas Offer – Minimal Index But Low Vol Vs Peers
Henlius (2696 HK): Musings on the Deal Break Price
AVJennings (AVJ AU): Ho Bee Emerges with a Competing Offer
[JAPAN Activism] Murakami Buying Mitsui Matshima (1518 JP) BIGLY – Now At 38% Aiming at Control?
Hyundai Motor (HYUNDAI IN): Anchor Lock-Up Expiry Increases Float; Index Inclusions Near
Delta Electronics (DELTA TB / 2308 TT): Off the Peak; SET50 Deletion Risk Increases
Funds in Focus Q4 2024 & 2024: A Better Quarter & Year for Active SA Equity Managers
Sunrise Communications (SNRE): Dividend Initiation to Drive Upside

Murata Manufacturing (6981 JP) – No Immediate Passive Buying Could Lead to More Weakness

A group of 7 shareholders are looking to sell 61.3m shares in Murata Manufacturing (6981 JP) to raise JPY 143.8bn (US$916m). That is 3.3% of shares outstanding.
The shares are being offered at a price range of JPY 2296-2345.5/share, a discount of 5-7% to the last close of the stock.
With the offering less than 5% of shares outstanding and less than US$1bn in size, there is no immediate passive buying and there could be further weakness in the stock.

Murata Mfg (6981) Accelerated Overseas Offer – Minimal Index But Low Vol Vs Peers

Today after the close, Murata Manufacturing (6981 JP) announced an equity offering worth roughly US$870mm if the stock prices 10% below last.
Unlike “regular” secondary offerings, this is available only to overseas investors, and bookbuilding is very quick. This “increases the size” relative to its headline (no retail uptake).
At 11 days of ADV and 3.3% of shares out, it has a certain size, but the stock is well-owned by foreigners, and not terribly volatile vs Peers.

Henlius (2696 HK): Musings on the Deal Break Price

Fosun Pharma’s HK$24.60 offer for Shanghai Henlius Biotech (2696 HK) is heading for a deal break. LVC has not changed its shareholding since amassing a blocking stake.
In the absence of a last-ditch effort by Shanghai Fosun Pharmaceutical (Group) (2196 HK) to rescue the deal, the key question is the potential deal break price.
Based on four methods, the potential deal break price is HK$17.28, 12% below the last close price of HK$19.58.

AVJennings (AVJ AU): Ho Bee Emerges with a Competing Offer

Avjennings Ltd (AVJ AU) disclosed a competing non-binding proposal from Ho Bee Land Ltd (HOBEE SP) at A$0.70, a 4.5% premium to AVID’s A$0.67 offer.
The potential for a Ho Bee competing offer was discussed in AVJennings (AVJ AU): Competing Offer Brewing.
Despite the hefty premium to the undisturbed price, the Ho Bee offer is below NTA. Therefore, there is headroom for a bidding war as an offer at NTA implies A$0.81.

[JAPAN Activism] Murakami Buying Mitsui Matshima (1518 JP) BIGLY – Now At 38% Aiming at Control?

I wrote about this stock in May 2024. At the time, Japan activist Murakami-san had gone from 5% to 20% in a hurry. Shortly after, he was at 29%.
Then he fiddled/sold/bought/waited/sold. The stock fell in late 2024 as a quant fund sold. Murakami-san started buying again. In 3 weeks to 7 January bought from 27.02% to 34.51%.
By my calculation, as of last week he has 38.4% of votes. This is worth a closer look again. It’s a discount to BVPS but ask yourself why this big.

Hyundai Motor (HYUNDAI IN): Anchor Lock-Up Expiry Increases Float; Index Inclusions Near

The lock-up on the second half of the anchor investor allocation for Hyundai Motor India (HYUNDAI IN) ends after market close today and the shares will be available for sale tomorrow.
The lock-up expiry further increases free float for the stock and there will be multiple index inclusions over the next few months.
The largest index inclusion will be in February, followed by smaller inclusions in March and June. In total, passives will mop up around 16% of the float.

Delta Electronics (DELTA TB / 2308 TT): Off the Peak; SET50 Deletion Risk Increases

Delta Electronics Thailand (DELTA TB) is trading at a huge valuation premium to Delta Electronics (2308 TT), though that has narrowed over the last couple of months.
Delta Electronics Thailand has already been on the Market Surveillance list for 2 months and inclusion for another 2 months will mean SET 50 Index deletion in June.
A placement by Delta Electronics (2308 TT) is not out of the question and that further increases the downside risk for Delta Electronics Thailand (DELTA TB).

Funds in Focus Q4 2024 & 2024: A Better Quarter & Year for Active SA Equity Managers

By Charlotte van Tiddens, CFA

During the last quarter of 2024, 55% of active SA equity funds outperformed their benchmarks.
This is ahead of preceding quarter where 48% of active funds outperformed.
It is also interesting to note that for the year up to the end of Q3 2024, 22% of funds outperformed their benchmarks.

Sunrise Communications (SNRE): Dividend Initiation to Drive Upside

By Richard Howe

Sunrise Communications (SNRE) is a recent spin-off from Liberty Global (LBTYA).
Since the time of the spin-off, Sunrise has performed relatively well (+7% vs. S&P 500 +1%)
Nonetheless, I believe there is substantial upside ahead. Sunrise has committed to pay a 240CHF annual dividend.

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Jan 15

Daily Brief Event-Driven: Bain To Launch an MBO for Aircraft Maintenance Co JAMCO (7408) ¥1800 Is Too Cheap and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Bain To Launch an MBO for Aircraft Maintenance Co JAMCO (7408) ¥1800 Is Too Cheap
Henlius (2696 HK): LVC Sits On A Blocking Stake. And Me (Maybe) Eating Humble Pie
Henlius (2696 HK): Hurtling Towards a Likely Deal Break
Tokyo Metro (9023 JP): Index Inclusions – Light at the End of the Tunnel
KRX H1 SSF Reshuffle: Play Setup from Last Round’s Learning Curve
Foshan Haitian Flavouring & Food (603288 CH): Index Inclusion Post H-Share Listing
Samsung Electronics’ Key Inflection Point: Lee Jae-Yong’s Final Appeal Ruling on February 3
JAMCO (7408 JP): Bain’s Tender Offer Is Light but Likely a Done Deal
AVJennings (AVJ AU): Ho Bee’s Superior Proposal
Ahead of Macquarie’s PUSU Deadline

Bain To Launch an MBO for Aircraft Maintenance Co JAMCO (7408) ¥1800 Is Too Cheap

Bain is buying out JAMCO (a long time ago called Itochu Aircraft Maintenance) from Itochu, ANA, Bain’s own portfolio company, and the public. It’s an expected deal. A done deal.
It is being done too cheaply. The price is 6x next year’s expected EBIT. This year expected ROE is 22%. Next year could be double that.
And the company has more in non-operating financial assets than its net equity. And a lot of really old land assets are not marked up. Just a shame.

Henlius (2696 HK): LVC Sits On A Blocking Stake. And Me (Maybe) Eating Humble Pie

I was wrong. Loyal Valley Capital (LVC) have stopped buying Shanghai Henlius (2696 HK) – or have not bought since reaching a blocking stake of 7.8295% on the 9th January.
LVC could either use that stake as leverage to negotiate with the Offeror on the scrip terms. Or blow up the deal and pick up shares after the deal breaks
OR perhaps, as per my initial impression, LVC tenders. And they may still do that. It should be this straightforward; but the fact that it is not raises questions.

Henlius (2696 HK): Hurtling Towards a Likely Deal Break

The vote on Fosun Pharma’s HK$24.60 offer for Shanghai Henlius Biotech (2696 HK) is on 22 January. The gross spread has ballooned to 21.8%, which suggests a deal break.
I previously stated that LVC’s trading behaviour over the coming days will indicate its voting intentions. Unfortunately, this behaviour suggests a high likelihood of blocking the vote.
Fosun Pharma has two potential options to secure LVC’s backing: increase the share alternative cap or introduce a rollover option. Both have challenges and are, therefore, not viable options.

Tokyo Metro (9023 JP): Index Inclusions – Light at the End of the Tunnel

Tokyo Metro (9023 JP) listed on 23 October and was added to the TSE Tokyo Price Index TOPIX (TPX INDEX) at the close on 28 November.
Tokyo Metro (9023 JP) was not expected to be added to one global index (it was not added), while it was expected to be added to the other (and missed).
The stock could be added to one global index in February (its close!) and to the other in June (pretty much a sure thing).

KRX H1 SSF Reshuffle: Play Setup from Last Round’s Learning Curve

Last time, price action showed up a week early, suggesting market makers are getting ahead, likely due to learning effects.
This round’s a letdown—no KOSDAQ names and fewer plays. Still, lower-volume KOSPI names showed solid price action correlation in the last reshuffle.
This round, focus on low-volume KOSPI names, enter 5 days before the listing, and exit just before it drops, using the learning curve from the last reshuffle.

Foshan Haitian Flavouring & Food (603288 CH): Index Inclusion Post H-Share Listing

Foshan Haitian Flavouring & Food (603288 CH) has filed for a listing on the HKEX (388 HK) and reports indicate that the raise will be at least US$1.5bn.
In line with the Midea Group (300 HK) and S.F. Holding (6936 HK) H-share listings, the discount on the H-shares could be in the 20-25% range.
The stock will not get Fast Entry to any indices but there should be inclusions at subsequent rebalances, especially once the cornerstone investor lock-up expires.

Samsung Electronics’ Key Inflection Point: Lee Jae-Yong’s Final Appeal Ruling on February 3

Some speculate Samsung might delay the value-up announcement until after the February 3 ruling, using it strategically to influence the verdict and align with the appeal’s outcome.
Market chatter even surrounds Samsung’s HBM test delays with NVIDIA, with some linking it to Lee Jae-yong’s February 3 appeal ruling—though it seems more like speculative conspiracy.
If Lee Jae-yong wins his appeal on February 3, it could trigger key events like value-up disclosure and HBM pass, significantly impacting Samsung’s short-term price action and positions.

JAMCO (7408 JP): Bain’s Tender Offer Is Light but Likely a Done Deal

Jamco Corp (7408 JP) announced a preconditional tender offer from Bain Capital at JPY1,800 per share, a 27.8% premium to the last close.
The offer, which is preconditional on regulatory approvals and will open in mid-February, is attractive compared to historical trading ranges.
On the other hand, the offer is light as it is below the midpoint of the IFA DCF valuation range. However, the modest required acceptance rate suggests a done deal.

AVJennings (AVJ AU): Ho Bee’s Superior Proposal

Back on the 28th November, AVJennings Ltd (AVJ AU), a reputable home builder in Australia/New Zealand, entered into a deed granting the AVID consortium exclusive confirmatory due diligence.
The AVID consortium, comprising Proprium Capital Partners and AVID Property Group, pitched an NBIO (by way of a Scheme) of A$0.67/share. Singapore’s SC Global (54.5% shareholder) was supportive.
In what appeared to be clean deal, Ho Bee Land Ltd (HOBEE SP) then acquired a 5.39% stake on the 23rd December. Now they’ve made their own NBIO at A$0.70/share.

Ahead of Macquarie’s PUSU Deadline

Macquarie’s final offer of 870 pence per share represents a 57% premium over Renewi’s November 27, 2024, closing price, valuing the company at approximately €1.06 billion.
Macquarie secured irrevocable undertakings from major shareholders holding 15.1% of shares and aims to finalize the offer by January 23, 2025, pending due diligence.
The offer aligns closely with Renewi’s intrinsic value, offering investors an attractive exit opportunity with a market-implied deal probability of 78.5%. Via Scheme, completion by end of March/early April.

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Jan 14

Daily Brief Event-Driven: Henlius (2696 HK): Test of Nerves Awaiting LVC’s Next Move and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Henlius (2696 HK): Test of Nerves Awaiting LVC’s Next Move
Kokusai Electric (6525) – Upcoming Lockup Expiry And BIG Index Demand
SHIFT (3697) The Next – Potential Big Index Add
Nikkei 225 Index Rebalance Preview (Mar 2025): SHIFT Splits; Updated Ranking, Capping & Funding
BayCurrent Consulting (6532) – High Growth, OK Multiple, Big Index Inclusion Coming Up?
HMM’s Shaping up to Be a Solid Pick for Classic Dividend Arbitrage Plays
Insignia Financial (IFL AU): Bain Calls CC Capital’s $4.30/Share NBIO
CVSG: A Special Sit with 2x Potential
STAR Chip Index Rebalance Preview: Changes in March
EQD | Hong Kong Single Stock Options Weekly January 06 – 10

Henlius (2696 HK): Test of Nerves Awaiting LVC’s Next Move

The vote on Fosun Pharma’s HK$24.60 offer for Shanghai Henlius Biotech (2696 HK) is on 22 January. The gross spread ballooned today due to LVC’s amassing a blocking stake.
There are valid arguments for LVC to block the vote or to support the offer. LVC’s trading behaviour over the coming days will point to its voting intentions.
I continue to believe that LVC will support the offer. At the current price and for a 15 February payment, the gross/annualised spread is 9.1%/160%.

Kokusai Electric (6525) – Upcoming Lockup Expiry And BIG Index Demand

Kokusai Electric (6525 JP) was IPOed in September 2023. The stock was cheap. It rose sharply, tripling in 9 months. At the ATH, the pre-IPO owners launched a HUGE secondary.
It was like a second IPO. The stock dipped, rallied, plummeted into pricing. Stayed there for two days, and in 6 months, the shares have halved.
Lockup expiry is next week, and there is a likely large index event in ~10 weeks.

SHIFT (3697) The Next – Potential Big Index Add

Shift Inc (3697 JP) is a high-growth stock in the software services, testing, consulting, development business. They have a big specialist TAM ahead of them.
Revenue is up 50-fold in 10 years. OP is up 85-fold in that period. Revenue is guided +17.5% in the year to Aug 2025. OP is guided +28%.
There is an event coming up shortly which could trigger an imminent index inclusion. It’s worth a look.

Nikkei 225 Index Rebalance Preview (Mar 2025): SHIFT Splits; Updated Ranking, Capping & Funding

The review period for the Nikkei 225 Index March rebalance ends in 3 weeks. There could be one outright change and one or two others driven by sector balance.
Shift Inc (3697 JP) will have a 15:1 stock split next week and that puts the stock in the list of potential inclusions over the next couple of rebalances.
The recent drop in Fast Retailing (9983 JP)‘s stock price will lead to a single step drop in the PAF. That means less passive selling and a smaller funding buy.

BayCurrent Consulting (6532) – High Growth, OK Multiple, Big Index Inclusion Coming Up?

BayCurrent Consulting (6532 JP) is a high-growth consulting company. This year sees 22% annual revenue growth and 25% OP growth to Feb 2025. Q3 results come out tomorrow.
The stock has a fairly large and concentrated active institutional holder base, though interestingly, the foreign active insto base is very long-tailed. LOTS of investors hold this.
The company is likely to see an index inclusion imminently which will over time mean a buy of more than a third of Maximum Real World Float.

HMM’s Shaping up to Be a Solid Pick for Classic Dividend Arbitrage Plays

To stay in the Value-up index by June, HMM needs to maintain high ROE, but with 2023’s dip and a 2024 estimate around mid-10%, they’ll be borderline in the rankings.
Local markets expect HMM’s dividend payout to range from 840 KRW to mid-1,000 KRW, with a yield of 4.5% to 8%, while futures show mild backwardation in February and March.
HMM may finalize the dividend and announce the record date by late January, with the record date likely in mid to late February.

Insignia Financial (IFL AU): Bain Calls CC Capital’s $4.30/Share NBIO

By Triple S Special Situations Investing

After wealth manager Insignia Financial (IFL AU) announced – and subsequently rejected Bain’s A$4.00/share Offer, CC Capital waded in on the 6th January with its own A$4.30/share NBIO.
IFL have yet to reach an opinion on CC Capital bid. And to make things interesting, Bain has sweetened its Offer to $4.30/share, matching CC Capital’s terms.
What now? Either, IFL opens the data room to both parties. Or rejects both. I think they should engage.

CVSG: A Special Sit with 2x Potential

CVS Group plc (“CVSG”) has seen its share price take a hit recently, but the decline seems to stem from two short-term issues rather than any real damage to the business fundamentals.
The first blow came in March 2024 when the UK’s Competition and Markets Authority (CMA) unexpectedly announced a nationwide review of veterinary services for household pets.
These investigations typically last 12 to 18 months, so we’re looking at a resolution by late 2025 with a mid term resolution being around the corner mid-year.

STAR Chip Index Rebalance Preview: Changes in March

There could be 1 constituent change for the STAR Chip Index at the March rebalance. There will also be a few capping changes.
Estimated one-way turnover is 6.5% resulting in a round-trip trade of CNY 3.12bn (US$426m). Passives need to trade between 0.24-0.33x ADV in the potential changes.
There is one very close add and the final list could change depending on price performance over the next 10 trading days.

EQD | Hong Kong Single Stock Options Weekly January 06 – 10

By John Ley

Tough week with 82% of optionable stocks we survey declining on the week but no sign of panic as investors still prefer Calls over Puts.
Tencent was far and away the volume leader, accounting for 37% of all option trading.
Materials was the only Sector to see price gains and implied vol rose across all Sectors we survey.

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Jan 13

Daily Brief Event-Driven: Merger Arb Mondays (13 Jan) – ESR and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Merger Arb Mondays (13 Jan) – ESR, Henlius, Goldlion, Canvest, 7&I, Fujitsu General, Pressance
Weekly Deals Digest (12 Jan) – Henlius, GA Pack, Fujitsu General, Fuji Soft, Pressance, LG CNS
HK Connect SOUTHBOUND Flows (To 10 Jan 2025); YUUUUGE Net Buying by SB, $4bn on Tencent
Henlius (2696 HK): LVC Won’t Block. Buy Here & On Weakness
STAR50/STAR100 Index Rebalance Preview: Migrations & Outright Changes Lead to Outperformance
FnGuide Semiconductor Top10 Index Rebalance Preview: Three Changes as Adds Rally Bigly
Bloks Group (325 HK): Bumper Listing; Index Inclusion Timeline
Seven & I Holdings (3382 JP): The MBO Is Still Alive and Kicking
A/H Premium Tracker (To 10 Jan 2025): Super Wide Tech Spreads Best Over Holidays and into NY.
Coca-Cola Europacific Partners (CCEP LN): Halfway In F100

Merger Arb Mondays (13 Jan) – ESR, Henlius, Goldlion, Canvest, 7&I, Fujitsu General, Pressance

We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
Highest spreads: Smart Share Global (EM US), Pressance Corp (3254 JP), Seven & I Holdings (3382 JP), Get Nice Financial Group Ltd (1469 HK), ESR Group (1821 HK).
Lowest spreads: Lifestyle China (2136 HK), Makino Milling Machine Co (6135 JP), Macromill, Inc (3978 JP), Fuji Soft Inc (9749 JP), Latin Resources (LRS AU).

Weekly Deals Digest (12 Jan) – Henlius, GA Pack, Fujitsu General, Fuji Soft, Pressance, LG CNS

A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
ECM developments: LG CNS (LGCNSZ KS) seeks to raise up to US$837 million through a primary/secondary offering.
Event-Driven developments: Shanghai Henlius Biotech (2696 HK), Greatview Aseptic Packaging (468 HK), Fujitsu General (6755 JP), Fuji Soft Inc (9749 JP), Pressance Corp (3254 JP), Smart Share Global (EM US).

HK Connect SOUTHBOUND Flows (To 10 Jan 2025); YUUUUGE Net Buying by SB, $4bn on Tencent

SOUTHBOUND gross trading activity was not stronger per day than the previous two weeks. But SB Net Buying was HUGE. The biggest week since global index deletions in January 2021.
The story was similar. On Tuesday in the US, Tencent was put on a DoD list leading to a possible CMC list appearance (which would lead to index deletions).
Tencent saw US$4bn of SOUTHBOUND net buying. SMIC, Xiaomi, and China Mobile were another $1bn.

Henlius (2696 HK): LVC Won’t Block. Buy Here & On Weakness

Ahead of Shanghai Henlius Biotech (2696 HK)‘s EGM and Court Meeting on the 22 January, the focus has shifted to Loyal Valley Capital (LVC)’s continued buying in the market.
After the close of market last Friday, LVC held 7.8295%, above the 7.826% blocking stake. That % was as at 9th January. I assume LVC are still buying.
Yet if you analyse how LVC has traded in and out of Henlius, they are not in it to block. They’re in for the back-end scrip option.

STAR50/STAR100 Index Rebalance Preview: Migrations & Outright Changes Lead to Outperformance

95% of the way through the review period, there could be 3 changes for the SSE STAR50 (STAR50 INDEX) and 8 changes for the STAR100 Index.
We estimate turnover of 4.1% for the STAR50 INDEX and 9.3% for the STAR100 Index. The net round-trip trade is CNY 14.1bn (US$1.9bn).
The forecast adds to the STAR50 INDEX have outperformed the forecast deletes with steady outperformance over the last 3 months; the performance for the STAR100 Index is a lot better.

FnGuide Semiconductor Top10 Index Rebalance Preview: Three Changes as Adds Rally Bigly

Early in the review period, we forecast 3 changes for the FnGuide Semiconductor Top10 Index at the April rebalance.
Based on the passive assets tracking the index, there will be between 0.6-1.6x ADV to buy in the adds and between 2-4.7x ADV to sell in the deletes.
The forecast adds have outperformed the forecast deletes by a wide margin over the short-term and the medium-term. There could be more prior to the end of the review period.

Bloks Group (325 HK): Bumper Listing; Index Inclusion Timeline

Bloks Group (1850960D CH) was massively oversubscribed, traded 82% higher on Friday and closed its listing day 40% higher than the IPO price.
Bloks Group (1850960D CH) now has a full market cap of US$2.7bn. However, lock-ups and cornerstone allocations result in a much lower free float.
Index inclusions could take place in August and September, but the passive buying is a fraction of the number of shares that will come off lock-up expiry in early July.

Seven & I Holdings (3382 JP): The MBO Is Still Alive and Kicking

On 10 January, Bloomberg reported that Apollo is considering an equity commitment of JPY1.5 trillion in the Seven & I Holdings (3382 JP) MBO.
Securing financing is a key challenge for the MBO. Apollo’s involvement suggests a shift to a higher mix of equity vs debt, which should ease concerns about securing debt financing.
The article suggests that the MBO valuation could be lower than previously reported. However, 7&i’s underlying value supports a JPY8 trillion MBO valuation (market cap).

A/H Premium Tracker (To 10 Jan 2025): Super Wide Tech Spreads Best Over Holidays and into NY.

AH Premia are lower over the last few weeks of holiday and this past week of heavy SOUTHBOUND buying on Tencent, telcos, and banks.
Finance and Tech are seeing large buying, but the really big moves over the past few weeks have been on Industrial Names (CRRC), and Materials, and Tech
The VERY WIDE Tech spreads such as SMIC (981), Shanghai Fudan Microelectric (1385), CHina Rail Signal (3969), and Flat Glass (6865) have been HUGE performers.

Coca-Cola Europacific Partners (CCEP LN): Halfway In F100

By Dimitris Ioannidis

Coca-Cola Europacific Partners (CCEP LN) was transferred on 15 November 2024, to the index’s eligible FCA listing category under the new regime.
The security needs to pass the liquidity test in both January and February 2025 to be assigned a UK nationality and become eligible for the March 2025 review.
The security has already passed the liquidity threshold by ~20% in November and December thus it has a solid probability of being added to F100 at the March 2025 review.

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Jan 12

Daily Brief Event-Driven: Last Week in Event SPACE: Seven & I and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Last Week in Event SPACE: Seven & I, PA Gooddoctor, Fuji Soft, WH Group
Open House Finally Takes Out Pressance (3254) – Done Deal Done Cheap
(Mostly) Asia-Pac M&A: Insignia Financial, Arcadium, CPMC, GAPack, Haitong Sec., Shinko Electric
Pressance (3254 JP): Open House (3288 JP) JPY2,390 Tender Offer a Done Deal
Yibin Bank (2596 HK): 100% IPO Float Fails to Secure Global Index Inclusion

Last Week in Event SPACE: Seven & I, PA Gooddoctor, Fuji Soft, WH Group

Seven & I Holdings (3382 JP)‘s analysts’ call transcript is worth listening to. The math on the takeover maths well. This is a buy on dip. Again.
Those who bought into Ping An Healthcare and Technology (1833 HK)‘s punchy dividend, whether in cash or scrip, the trade has panned out well.
KKR extends its Offer for Fuji Soft Inc (9749 JP). Separately, Bain said it had destroyed confidential data, as requested, but it’s unclear how and when that data was destroyed.

Open House Finally Takes Out Pressance (3254) – Done Deal Done Cheap

Four-Plus years ago, Open House (3288 JP) bought the stake in Pressance Corp (3254 JP) owned by its embattled CEO (who had been arrested for a scandal).
Four years ago, Open House launched a partial tender and capital injection to go to ~65%. A takeout was a matter of time.
That time has come. Today Open House announced a Tender Offer to take Pressance fully-private. This is an easy deal. A done deal. Done too cheap.

(Mostly) Asia-Pac M&A: Insignia Financial, Arcadium, CPMC, GAPack, Haitong Sec., Shinko Electric

I tally 51 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
One new deal was discussed this week: CC Capital’s NBIO for Insignia Financial (IFL AU).
Key updates/news took place on: Arcadium Lithium (LTM AU), CPMC Holdings (906 HK), Greatview Aseptic Packaging (468 HK), Haitong Securities (H) (6837 HK), and Shinko Electric Industries (6967 JP).

Pressance (3254 JP): Open House (3288 JP) JPY2,390 Tender Offer a Done Deal

Pressance Corp (3254 JP) announced a tender offer from Open House (3288 JP) at JPY2,390 per share, a 22.1% premium to the last close.
While the offer is below book value, it represents an all-time high and broadly aligns with the mid-point of the target IFA’s DCF valuation range.
The low minimum acceptance condition (2.3 million or 3.25% ownership ratio) suggests a done deal. The offer runs from 14 January to 26 February (30 business days).

Yibin Bank (2596 HK): 100% IPO Float Fails to Secure Global Index Inclusion

By Dimitris Ioannidis

Yibin City Commercial Bank Co Ltd (2596 HK) is scheduled to debut on the HKEX on 13 January 2025 at a market capitalization of ~$1.6bn.
The IPO free float is 100% as the offered shares represent all the listed shares. However, the significant amount of unlisted shares result in a low fcap.
The security can be added at the June 2025 review if the stock price mimics the IPO debut of Bloks (325 HK) and surges by ~84%.

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Jan 11

Daily Brief Event-Driven: KRX’s Responses to TMI-Related Confusions on KRX Semicon & Autos Rebalancing and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

KRX’s Responses to TMI-Related Confusions on KRX Semicon & Autos Rebalancing
VCredit (2003 HK): Offer Now Open. IFA Says Not Fair. Not Even Close
GJS/Haitong Merger: One Formality Reg To Go
[Quiddity Index Jan25] Nikkei 225 Mar Rebal: 3 IN, 3 OUT, $3bn One Way
EQD| SPX Volatility During the Trump Years (2017-2020)
Chung Yong-Jin Will Receive 10% of E Mart Shares from His Mum to Become the Controlling Shareholder
BBVA’s Bid for Sabadell: A Tough Road Ahead
Weekly Update: January 10, 2025
A Strategic Pivot: Adani Enterprises Exits Adani Wilmar for $2B
Destination XL Group Faces Potential Buyout: Fund 1 Investments Considers Raising Initial $3/Share Offer

KRX’s Responses to TMI-Related Confusions on KRX Semicon & Autos Rebalancing

KRX confirmed no immediate changes on KRX Semicon and KRX Autos. The universe will switch from BMI to TMI large and mid-caps, with constituent updates happening in the September rebalancing.
TMI rebalances quarterly, while KRX Semicon and Autos rebalance annually in September. KRX confirmed these indices will use the September TMI rebalancing results.
TMI rebalances quarterly, likely releasing results before KRX Sector Indices, giving a window to predict shifts in KRX Semicon and Autos stocks and position ahead of the sector rebalancing.

VCredit (2003 HK): Offer Now Open. IFA Says Not Fair. Not Even Close

Back on the 20 December, VCredit Holdings (2003 HK), a provider of consumer financial services in China, announced a unconditional MGO from Ma Ting Hung, VCredit’s chairman. and concert parties.
The catch? The Offer Price of HK$1.80/share was a 9.09% discount to undisturbed. It will not be increased.
VCredit’s Composite Doc is now out, with the Offer open for tendering, with a 3rd February first close. The IFA says “not fair and not reasonable“. Trading 45% through terms.

GJS/Haitong Merger: One Formality Reg To Go

Back on the 9th October, China’s leading state-backed brokerages Guotai Junan Securities (2611 HK) (GJS) and Haitong Securities (6837 HK) announced a scrip merger, with GJS the surviving entity.
Barring a China Traditional Chinese Medicine (570 HK)-like obstacle/debacle, this transaction was a wrap. Fortunately, key regulatory approvals (SAMR and SASAC) have been ticked off.
Approval from the Shanghai Stock Exchange was secured overnight. That was a formality. One approval remains – CSRC. Expect that condition to be satisfied shortly. GJS is no longer shortable.

[Quiddity Index Jan25] Nikkei 225 Mar Rebal: 3 IN, 3 OUT, $3bn One Way

In December, I thought the March 2025 Nikkei 225 Rebalance was going to be 2 ADDs 2 DELETEs and a double-capping for Fast Retailing.
Fast Retailing has fallen sharply vs Nikkei 225, and another stock has announced a large-multiple share split, making it a strong candidate for Nikkei 225 ADDITION in March 2025.
There is short-term path risk on all three ADDs, but they are definitely worth watching. Keep an eye out for separate insights on two of these names.

EQD| SPX Volatility During the Trump Years (2017-2020)

By John Ley

Common perception is that Trump = Volatility. We look at average monthly historic volatility and returns across 2017-2020 and compare with prior 19 years.
Trumps term in office included “Volmageddon”, the Christmas Massacre and Covid but we still find that the returns and historic volatility were not out of line.
Although a small sample size, we see a pattern to how historic volatility deviated from the average over his last term in office.

Chung Yong-Jin Will Receive 10% of E Mart Shares from His Mum to Become the Controlling Shareholder

By Douglas Kim

E Mart’s Chairman Chung Yong-Jin will receive the entire 10% shares of E Mart held by his mum Lee Myung-Hee.
After this transaction, Chung Yong-Jin will become the largest shareholder in E Mart with a 28.6% stake in the company.
This is likely to positively impact E Mart. In Korea, when the final major ownership stake is transferred, there is often a positive boost to the share price.

BBVA’s Bid for Sabadell: A Tough Road Ahead

Lower Acceptance Threshold: BBVA reduced its tender offer threshold to 49.3%, excluding Sabadell’s 1.4% treasury shares to ensure voting rights focus on active shareholders.
Shareholder and Regulatory Hurdles: Retail shareholder resistance, extended antitrust reviews, and opposition from Spanish and Catalonian governments complicate the takeover.
Sabadell’s Defensive Moves: A €2.9 billion shareholder return plan, potential treasury share expansion to 10%, and Zurich’s 3% stake further reduce the offer’s likelihood of success.

Weekly Update: January 10, 2025

By Richard Howe

Galapagos NV (GLPG), a Belgian biotechnology company, announced on January 8, 2025, its plan to split into two publicly traded entities by mid-2025.
Vivendi (VIV), the French media conglomerate, has recently undergone a significant restructuring by spinning off several of its key divisions into independent entities.
On December 30, 2024, Lions Gate Entertainment (LGFA/LGFB) filed its latest proxy related to the spin-off of Lionsgate Studios (LION). You can read it here.

A Strategic Pivot: Adani Enterprises Exits Adani Wilmar for $2B

By Nimish Maheshwari

Adani Enterprises (ADE IN) exits Adani Wilmar (AWLTD IN), selling its entire 44% stake for over $2 billion, redirecting funds toward core infrastructure ambitions.
The exit frees capital for energy, transport, and logistics projects, showcasing Adani’s commitment to strategic resource deployment and robust corporate governance.
Adani’s strategic divestment highlights its focus on infrastructure-driven growth, underscoring the potential for shareholder value creation through timely exits from non-core businesses.

Destination XL Group Faces Potential Buyout: Fund 1 Investments Considers Raising Initial $3/Share Offer

By Dalius Tauraitis

Destination XL Group received a non-binding $3/share proposal from Fund 1 Investments, holding a 21% stake.
Fund 1’s offer values DXLG at 6.1x EBITDA, with potential for a higher bid if additional value is identified.
DXLG repurchased 6.6% of shares in Q3 2024 at an average price of $2.80/share, totaling $10 million.

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Jan 10

Daily Brief Event-Driven: 7&I (3382 JP) – Dippity Doo Dah – Irrational Fears and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

7&I (3382 JP) – Dippity Doo Dah – Irrational Fears, Earnings Vol, But Restructuring Proceeding Apace
Haitong Securities (6837 HK)/GTJA (2611 HK) Merger: The Home Stretch
Bloks (325 HK): Global Index Inclusion Following IPO Lock-Up Expiry
[Quiddity Index Jan25] KOSPI 200 Leaderboard Jun25: Up to 6 Changes Possible
Suntec REIT (SUN SP): Tang’s Curious Bump
Fuji Soft (9749 JP): KKR Extends Again, Delaying the Inevitable Bump
Quiddity Leaderboard SET50 Jun 25: One Change Possible; Delta on Thin Ice Again
IDT 2024 Annual Meeting Summary
Shift Up IPO Lockup – US$1.2bn Lockup Release of Strategic, Employees and IPO Investors
Brookfield/Neoen: Close to Completion

7&I (3382 JP) – Dippity Doo Dah – Irrational Fears, Earnings Vol, But Restructuring Proceeding Apace

Recent news on the Seven & I Holdings (3382 JP) situation includes better-than-expected possible sale of the SST business, a little headline fear-mongering on national security, and earnings.
Earnings this year will be volatile vs expectations. Timing (and magnitude) of kitchen-sinking matters. But neither ACT nor you should be buying it based on trough earnings expectations.
The call transcript is worth listening to. The math on the takeover maths well. This is a buy on dip. Again.

Haitong Securities (6837 HK)/GTJA (2611 HK) Merger: The Home Stretch

The exchange ratio for the merger between Guotai Junan Securities (2611 HK) and Haitong Securities Co Ltd (H) (6837 HK) is 0.62x.
The merger closing is subject to several effectiveness and implementation conditions. The latest update suggests that the remaining conditions are CSRC and HKEx approvals.
The satisfaction of the remaining conditions is a formality. At the last close and for an end February payment, the gross/annualised spread is 3.2%/26.4%.

Bloks (325 HK): Global Index Inclusion Following IPO Lock-Up Expiry

By Dimitris Ioannidis

Bloks (325 HK) is expected to be assigned an index nationality of Hong Kong instead of China due to its incorporation in the Cayman Islands.
The security is expected to be added at the September 2025 review following the 6-month IPO lock-up expiry which increases the fcap above the APAC threshold.
The security is ineligible for the other global index until January 2026 because of the free float being below the minimum threshold of 15%.

[Quiddity Index Jan25] KOSPI 200 Leaderboard Jun25: Up to 6 Changes Possible

KOSPI 200 is a Korean blue-chip index that tracks the 200 largest and most-liquid names listed in the KOSPI section of the Korea Exchange (KRX).
In this insight, we take a look at the names leading the race to become ADDs and DELs during the upcoming semiannual review in June 2025.
We expect six ADDs and six DELs for the KOSPI 200 index during this index rebal event based on the latest available data.

Suntec REIT (SUN SP): Tang’s Curious Bump

Back on the 5th December, Gordan Tang (& his wife Celine) acquired a 2.14% stake in Suntec REIT (SUN SP), lifting their stake to 31.45% from 29.31%, triggering a MGO.
This had all the hallmarks of a technical Offer. The Offer price was S$1.16/share compared to the S$1.17/share undisturbed price. The IFA opined the Offer was not fair nor reasonable.
The Tangs have now bumped to S$1.19/share. Terms are not final. The IFA viewpoint won’t budge. This is an opportunistic move from the Tangs. But why not roll the dice?

Fuji Soft (9749 JP): KKR Extends Again, Delaying the Inevitable Bump

KKR has extended the close date of the Fuji Soft Inc (9749 JP) second tender offer period from 9 to 24 January. All other terms remain unchanged.
KKR unconvincingly tries to criticize the Bain offer and unsurprisingly believes there will not be a tender offer by Bain that investors can tender into.
Despite KKR’s gamesmanship, it has not declared its offer final. A bump remains necessary as Bain remains resolute in launching its offer. The final winning offer could be around JPY10,000.

Quiddity Leaderboard SET50 Jun 25: One Change Possible; Delta on Thin Ice Again

The SET50 index tracks the performance of the top 50 largest and most liquid names listed on the Stock Exchange of Thailand (SET).
In this insight, we take a look at the potential ADDs/DELs for SET 50 during the index rebal event in June 2025.
Currently, we see one expected change, but since the market cap reference period is yet to start, the rankings can fluctuate significantly before the base date.

IDT 2024 Annual Meeting Summary

By Richard Howe

An accelerated return of capital looks unavoidable. IDT has a net cash balance sheet yet generates substantial cash every quarter.
Traditional business is “adding” ice. Investors (including me) view the traditional telecom business as a “melting ice cube,” but IDT’s CFO says the business might start “adding ice.” Key areas of strength include IDT Digital and Mobile Top Up.
Spin-offs aren’t imminent. NRS is performing incredibly well, but IDT’s CEO doesn’t see a spin-off happening until the business is generating $100MM of EBITDA.

Shift Up IPO Lockup – US$1.2bn Lockup Release of Strategic, Employees and IPO Investors

By Sumeet Singh

Shift Up (462870 KS) raised around US$320m in its South Korean IPO, after pricing at the top. Around US$1.2bn worth of shares will be released from their lockup soon.
Shift Up is a South Korean games developer, which as released three games so far for the global markets.
In this note, we will talk about the lockup dynamics and possible placement.

Brookfield/Neoen: Close to Completion