Event-Driven

In December, Nidec Corp (6594 JP) made an unsolicited bid for Makino Milling Machine Co (6135 JP). Makino wanted more time. Nidec wanted to squeeze. Makino proposed a poison pill.
Makino appeared to act slowly but white knight bidders were mooted in the media. Nidec launched, but apparently approvals may have been hard. They withdrew. Makino cancelled the poison pill.
Shares fell sharply. Yesterday, they rose because it appears Effissimo owns 3%. Today, we got news post-close that MBK may be close to making an ¥11,000+ bid.

Makino Milling Machine (6135 JP): Relief as a White Knight Bidder Surfaces

In response to a Nikkei article, Makino Milling Machine Co (6135 JP) confirmed it had received a legally binding acquisition proposal from MBK Partners.
The price is expected to exceed Nidec Corp (6594 JP) JPY11,000 hostile offer. On 8 May, Nidec withdrew its offer due to the Board’s proposed countermeasures.
My analysis suggests that MBK’s white knight bid could be JPY11,677 per share, 13.7% higher than the last close price of JPY10,270.

StubWorld: First Pacific (142 HK) Looking Stretched

Via 49.9%-held MPIC, First Pacific Co (142 HK) is spinning off Maynilad, a provider of water and wastewater services in the Greater Manila Area, on the Philippine Stock Exchange
Maynilad will tentatively have a market cap of US$2.7bn. Other key investors include DMCI Holdings (DMC PM) and Marubeni Corp (8002 JP). Listing is expected in July.
I see First Pac’s discount to NAV at ~30%, around its narrowest level in a decade.

ORIX JREIT (8954) Sponsor To Buy Units – Looks Minor, It’s Bigger

It has been a sport of the J-REITs the past 18-24mos to buy back their units at well under PNAV 1.0x and to have sponsor entities up their stakes.
The goal? Get valuation to PNAV1+ so they can, in good faith, get the REIT to buy assets with an equity raise. Below PNAV1 would work with a rights offering.
Now the Orix JREIT Inc (8954 JP) has announced it will triple its small holding. Meaningful portion of ADV, more meaningful portion of MRWF.

Seven & I Holdings (3382 JP): Wait and Hope

The Seven & I Holdings (3382 JP) AGM was a vote of confidence in the Board’s strategy of pursuing two parallel paths to generate value.
The Board’s management initiatives are steadily being implemented, but have yet to deliver shareholder value. Since they were announced, the share price has modestly outperformed the Nikkei 225.
7&I and Couche Tard signed an NDA but a viable divestiture plan to gain US regulatory approval remains in doubt, particularly as PE has emerged as the likely bidder.

HYBE to Sell Its 9.4% Stake in SM Entertainment to Tencent Music in a Block Deal Sale

On 27 May, HYBE announced that it will sell its 9.4% in S.M.Entertainment (2.21 million shares) for about 243 billion won (US$145 million) to Tencent Music Entertainment.
HYBE’s sale of its stake in SM Entertainment is expected to take place on Friday (30 May) after the market close through an after hours block deal trade.
The block deal sale of SM Entertainment by HYBE to Tencent is likely to have a negative impact on SM Entertainment’s shares mainly due to large share price discount (15.3%).

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May 27

Daily Brief Event-Driven: [Japan Activism/M&A] – Shareholders Approve Tsuruha/Welcia Merger – Now It’s Partial Offer+Synergies and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

[Japan Activism/M&A] – Shareholders Approve Tsuruha/Welcia Merger – Now It’s Partial Offer+Synergies
[Japan Activism] The Upcoming Fuji Media AGM Stoush – Foreigners Vs Voting Right Limits
Soundwill (878 HK): Thoughts On The Latest Scheme Fail
A/H Premium Tracker (To 23 May 2025): AH Premia Contract, H Premia Names Perform Best; Batteries!
Forged in Politics: Nippon’s $55 Bid for X Heats Up Again
NIFTY Index Outlook (With an Eye on Zomato’s Passive Selling Starting…)
Connect SOUTHBOUND Flows (To 23 May 2025); Volumes OK, Telecoms & Banks Bought, Tech & Consumer Sold
LS Marine Solution’s Rights Deal Is Serving up a Pretty Rare Arbitrage Hunting Ground
SSI Weekly Newsletter: Strategic Reviews, Merger Arbitrage, Tender Offers, and Portfolio Updates
Weekly Update (GTX, HAVAS, LION, SNRE, MDT)

[Japan Activism/M&A] – Shareholders Approve Tsuruha/Welcia Merger – Now It’s Partial Offer+Synergies

This morning the Nikkei reported shareholders of Welcia Holdings (3141 JP) and Tsuruha Holdings (3391 JP) approved their Merger. Activists opposed but it was going to be close at best.
As expected, Welcia shares popped, and the spread converged to 2% with Tsuruha falling back to just below ¥11,400. Some of this is unwind of speculative interest in Tsuruha.
The new yuhos are out, which shows roughly where we stand (as of end-Feb, and some updates). Now the trade is NEWCO vs Aeon’s interest and NEWCO vs World.

[Japan Activism] The Upcoming Fuji Media AGM Stoush – Foreigners Vs Voting Right Limits

Fuji Media Holdings (4676 JP) has for years been “undervalued” and owned by value-oriented actively-managed fund managers. Under-used real estate and IP assets. Lack of governance regarding capital.
A Shukan Bunshun article in Dec-2024 reported a former boy band SMAP member and Fuji TV regular made a big payment to an unidentified woman after a June 2023 “incident.”
Fuji TV hemmed and hawed about its involvement. Advertisers bolted. Activists activisted. The chairman resigned. Now Major Activist Dalton has a director slate for the AGM. What Next?

Soundwill (878 HK): Thoughts On The Latest Scheme Fail

After Goldlion (533 HK)‘s spectacular Scheme fail, Soundwill (878 HK) appeared destined to be the next failure as shares dipped hard ahead of the Scheme vote. And fail it did.
Just like for Goldlion, Soundwill’s Offer was clearly light. The counter-argument was that terms were, arguably, as good as it gets. And no competing Offer would emerge. Minorities voiced otherwise.
Hong Kong has been the proverbial graveyard for arb deals of late. However, in a positive sense, minorities in Goldlion and Soundwill simply rejected opportunistic Offers.

A/H Premium Tracker (To 23 May 2025): AH Premia Contract, H Premia Names Perform Best; Batteries!

AH spreads are slightly narrower, but performance is concentrated in fewer names and broad spread volatility is up. BYD (1211 HK) now 5% through. CATL 10% through will help.
It feels like there were some concentrated shorts on H vs A. BYD performance on CATL and Hang Seng upweight/inclusion exacerbate the issue. CATL H less liquid than people think.
The data tables below update on a daily basis in the Tools section of Smartkarma. The SOUTHBOUND Flow Monitor and AH Monitor are both there free for SK readers.

Forged in Politics: Nippon’s $55 Bid for X Heats Up Again

Trump’s endorsement removes the political overhang, reigniting momentum for Nippon Steel’s $55/share all-cash offer.
Implied EV/EBITDA of 8.94x reflects ~$2–3B in strategic synergies over standalone valuation.
11.59% annualized return offers attractive arbitrage upside with manageable regulatory and execution risk.

NIFTY Index Outlook (With an Eye on Zomato’s Passive Selling Starting…)

By Nico Rosti

As reported by Brian Freitas , one of the NIFTY Index (NIFTY INDEX) ‘s component (Zomato: Eternal (ETERNAL IN) ) will be subject to big passive selling beginning on Tuesday.
Let’s have a look at the NIFTY Index (NIFTY INDEX) to evaluate the tactical outlook according to our model.
Since our last BUY recommendation in a previous insight in early May, the index has made some progress uptrending, let’s see if the rally can continue…

Connect SOUTHBOUND Flows (To 23 May 2025); Volumes OK, Telecoms & Banks Bought, Tech & Consumer Sold

Gross SOUTHBOUND volumes back below HK$100bn a day this past week, but net buying was nearly HK$19bn, which is decent.
Among the top buys as a percentage of volume, FINANCIALS and TELECOMS stand out, dramatically. Among top sells, it is CONSUMER and INFO TECH dominating the top 20.
The data tables below update on a daily basis in the Tools section of Smartkarma. The SOUTHBOUND Flow Monitor and AH Monitor are both there free for SK readers.

LS Marine Solution’s Rights Deal Is Serving up a Pretty Rare Arbitrage Hunting Ground

By Special Situation Investments

This raise stands out with a near-60% issuance ratio—fat rights per share make pre-positioning before ex-date a compelling trade with solid pickup potential.
LS Cable holds 66.75% and has been steadily upping its stake—likely all-in on this raise, which adds serious anchor support and puts a strong floor under the rights.
Skip chasing rights—this setup favors buying shares pre–ex-rights, where the embedded rights value likely beats the ex-day drop, making it a clean trade.

SSI Weekly Newsletter: Strategic Reviews, Merger Arbitrage, Tender Offers, and Portfolio Updates

Elevation Oncology (ELEV) is undergoing a strategic review after discontinuing its lead program, with potential 14–42% upside.
Mayne Pharma (MYX:AX) faces merger arbitrage challenges due to Cosette Pharmaceuticals’ Material Adverse Change claims, trading at a 35% discount.
Air Canada (AC:TO) offers a tender with odd-lot provision, repurchasing shares at C$18.50 – C$21.00, with potential upside.

Weekly Update (GTX, HAVAS, LION, SNRE, MDT)

I sold Garrett Motion (GTX). Nothing against GTX as the stock still looks cheap at 6.6x FCF and 6.6x EBITDA.
But it’s been incredibly strong, and I don’t quite understand why.
Further, PE owners Oaktree, Centerbridge and Cyrus, were planning to sell 17MM shares in a secondary offering (looks like the secondary is being pulled).

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May 26

Daily Brief Event-Driven: Horizon Robotics (9660 HK): Southbound Stock Connect Inclusion Today & Upcoming Index Flows and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Horizon Robotics (9660 HK): Southbound Stock Connect Inclusion Today & Upcoming Index Flows
Tsuruha (3391 JP)/Welcia (3141 JP): Vote Musings
Weekly Deals Digest (25 May) – Toyota Industries, Shibaura, ESR, Soundwill, Mayne Pharma, GMO
Merger Arb Mondays (26 May) – Mayne, Seven & I, Shibaura, Welcia/Tsuruha, Nissin, ESR, Dickson
Zomato/Eternal: The BIG Passive Selling Starts
Clarifying a Few Points of Confusion Surrounding the Samsung Biologics Spin-Off
Underwriting Returns: A Risk Arb Look at Helvetia-Baloise

Horizon Robotics (9660 HK): Southbound Stock Connect Inclusion Today & Upcoming Index Flows

Horizon Robotics (9660 HK) will be added to Southbound Stock Connect from the start of trading today. Then there will be passive buying at the close on 20 June.
The lock up expiry in April will result in large buying from trackers of the Hang Seng TECH Index (HSTECH INDEX) and HSIII Index in September.
The stock will also be added to another large global index, though the timing on inclusion is not certain at the moment.

Tsuruha (3391 JP)/Welcia (3141 JP): Vote Musings

Leading proxies recommend that Tsuruha Holdings (3391 JP) shareholders vote against the Tsuruha/Welcia Holdings (3141 JP) merger on 26 May.
The share exchange terms favour Welcia over Tsuruha shareholders. The Tsuruha vote will be close but likely to be approved. Long Tsuruha is the trade, irrespective of the vote.
For a vote pass, you are long synergies and a likely partial offer bump. For a fail, you are long an undemanding multiple and the optionality of a new bid.

Weekly Deals Digest (25 May) – Toyota Industries, Shibaura, ESR, Soundwill, Mayne Pharma, GMO

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: GMO Internet (4784 JP) secondary offering of 91.7 million shares, worth around US$1.9 billion.
Event-Driven developments: Toyota Industries (6201 JP), Shibaura Electronics (6957 JP), ESR Group (1821 HK), Soundwill Holdings (878 HK), Mayne Pharma (MYX AU), Gold Road Resources (GOR AU).

Merger Arb Mondays (26 May) – Mayne, Seven & I, Shibaura, Welcia/Tsuruha, Nissin, ESR, Dickson

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: Mayne Pharma (MYX AU), Insignia Financial (IFL AU), ENN Energy (2688 HK), Seven & I Holdings (3382 JP), Smartpay Holdings (SPY NZ), ZEEKR (ZK US).
Lowest spreads: Bright Smart Securities And (1428 HK), Dada Nexus (DADA US), Amara Holdings (AMA SP), Nissin Corp (9066 JP), Avjennings Ltd (AVJ AU), SLB Development (SLB SP).

Zomato/Eternal: The BIG Passive Selling Starts

Following shareholder approval of the proposal to reduce the Foreign Ownership Limit from 100% to 49.5%, NSDL has updated the FOL. This starts the process of passive selling in Zomato.
Passives will sell US$350m at the close on Tuesday. There is a low probability of more selling later in the week. There will be bigger selling in August.
The size of the selling in August and beyond will depend on what foreign investors do in the stock till the end of June. Watch the red flag/ breach list.

Clarifying a Few Points of Confusion Surrounding the Samsung Biologics Spin-Off

Will the newly listed spinco also IPO Samsung Bioepis? That’s a textbook ECO — and could spark shareholder value dilution concerns, regulatory pushback, or even a potential KRX block.
The 8% dip looks tied to IPO fears around Bioepis. If Samsung hard-locks its no-IPO stance and FSS signs off, a near-term bounce in Biologics could be in play.
Post-Listing, watch for Samsung C&T to shift exposure—potentially boosting the surviving company’s value while capping the spinco. Sets up a compelling relative-value trade worth positioning for.

Underwriting Returns: A Risk Arb Look at Helvetia-Baloise

Shareholders of both firms have approved the merger, clearing a critical milestone ahead of expected regulatory clearance by late Q3 2025.
CHF 400m in net synergies and potential capital optimization could lift 2028 ROE to nearly 16%, offering meaningful value creation.
I recommend a long Baloise / short Helvetia strategy to capture the current 1.2% spread, translating to an estimated 3.4% annualized return.

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May 25

Daily Brief Event-Driven: Soundwill Holdings (878 HK): Hard Lessons from Another HK Arbageddon and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Soundwill Holdings (878 HK): Hard Lessons from Another HK Arbageddon
Last Week in Event SPACE: Toyota Industries, CATL, Mitsubishi Logisnext, Mayne Pharma, Melco
(Mostly) Asia-Pac M&A: Xanadu Mines, Reject Shop, ESR Group, Shibaura Elect., Jamco, Tsuruha/Welcia
Event Driven: Bajaj Auto Acquired Majority Control of Austrian KTM

Soundwill Holdings (878 HK): Hard Lessons from Another HK Arbageddon

Soundwill Holdings (878 HK) shareholders have voted against the Foo family’s HK$8.50 per share offer. The minority participation rate was high, and the NO vote comfortably failed the value test.
Unlike the Goldlion Holdings (533 HK) deal break, the price action over the last three days pointed to a deal break. Like previous deal breaks, this one offers hard lessons.
Soundwill has the fourth-highest premium of the pre-deal break price to the undisturbed price compared to previous deal breaks. My estimated deal-break price is HK$5.63, 13.2% below the last close.

Last Week in Event SPACE: Toyota Industries, CATL, Mitsubishi Logisnext, Mayne Pharma, Melco

Winner winner chicken dinner. A Nikke article suggests a bid higher than ¥6tn for Toyota Industries (6201 JP). In addition, people thinking about ¥18,400/share are going about this incorrectly.
Contemporary Amperex Technology (CATL) (3750 HK) pops on its IPO debut. The HKEx has issued a high concentration warning
Mitsubishi Logisnext Co., Ltd. (7105 JP) is still ragingly cheap given the move to delist dual parent/sub listings and having a global footprint. Own it here and now.

(Mostly) Asia-Pac M&A: Xanadu Mines, Reject Shop, ESR Group, Shibaura Elect., Jamco, Tsuruha/Welcia

I tally 46 – mostly firm, mostly Asia-Pac – arb transactions currently being discussed and analysed on Smartkarma.
Just one new deal was discussed on Smartkarma this week: Bastion’s off-market Offer for Xanadu Mines (XAM AU).
Key updates/news took place on: Reject Shop (TRS AU),ESR Group (1821 HK), Shibaura Electronics (6957 JP),Jamco Corp (7408 JP), and Tsuruha Holdings (3391 JP)/Welcia Holdings (3141 JP).

Event Driven: Bajaj Auto Acquired Majority Control of Austrian KTM

By Nimish Maheshwari

Bajaj Auto will take majority control of KTM AG by buying out its Austrian partner in Pierer Bajaj AG and injecting €800 million to close KTM’s court-approved restructuring.
The deal rescues a flagship European brand from insolvency, safeguards KTM’s supply chain, and vaults Bajaj into the global premium-sport segment as an OEM rather than a contract partner.
Bajaj’s pivot from passive investor to turnaround owner adds earnings volatility near-term, but long-term it secures technology, brand equity, and a bigger share of high-margin 400-1,000 cc bikes.

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May 24

Daily Brief Event-Driven: Xanadu (XAM AU): A Mongolian Face To A Mongolian Project and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Xanadu (XAM AU): A Mongolian Face To A Mongolian Project
[Alert] Sell HAVAS
[Alert] Sell Garrett Motion

Xanadu (XAM AU): A Mongolian Face To A Mongolian Project

Back on the 21st May, Xanadu Mines (XAM AU), a Mongolian copper-gold mining play, inked an off-market deal with Bastion @A$0.08/share in cash.
Bastion comprises Singapore-based Baroo (comprising board members from Mongolia) and Xanadu director Ganbayer Lkhagvasuren. Bastion is also subscribing for 286.8mn shares, at A$0.06/share, or 13% fully diluted.
A follow-up Q&A session is worth listening to in full to gauge why Zijin (JV partner and 19.8% shareholder) may view Bastion taking control of XAM as a good thing.

[Alert] Sell HAVAS

Since I recommended Havas about a month and a half ago, the stock is up about 19% while the Euro has appreciated ~4%.
As such, the position has appreciated by ~23% in a month and a half.
While my price target of €1.89, implies additional upside of 20%, the stock is not as compelling of a bargain today. I plan to sell my HAVAS shares and redeploy proceeds into higher conviction ideas.

[Alert] Sell Garrett Motion

I’m closing my Garrett Motion (GTX) recommendation.
I’ve been trying to understand why the stock has been so strong since reporting earnings, and I can’t figure it out.
The quarter was fine but not exceptional. The story remains the same.

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May 23

Daily Brief Event-Driven: CATL (3750 HK)’s Concentration Warning and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

CATL (3750 HK)’s Concentration Warning
[Japan Activism/M&A] – Thinking About Positioning Around the Tsuruha/Welcia Vote
Soundwill Holdings (878 HK): An Opportunity or Another HK Arbageddon?
HD Hyundai Marine Solution Block Deal Sale of 8.5% of Outstanding Shares
Clearing Confusion on Samsung C&T’s Forced Holding Co Conversion: Key Trade Angle in Biologics Split
Pony AI IPO Lockup – US$4.3bn Lockup Release with Stock at 69x EV/Sales
Samsung Biologics: Creation of a Holding Company to Split CDMO and Biosimilar Businesses
Air Canada’s Odd-Lot Tender Offer: Potential Upside Amid CapEx Challenges and Transborder Revenue Declines
No Compromise: Deal on Hold, and UniCredit Won’t Pay More

CATL (3750 HK)’s Concentration Warning

Contemporary Amperex Technology (3750 HK) (CATL H), a global leader in providing battery solutions, was listed on the 20th May at $263/share. Here is the prospectus.
Via the H-share listing, CATL raised ~US$5.2bn. Shares have since gained ~26% and trade at HK$330/share, as I type.
It is worth noting the HKEx issued a high concentration warning in CATL’s H shares the day before shares were listed.

[Japan Activism/M&A] – Thinking About Positioning Around the Tsuruha/Welcia Vote

The Tsuruha Holdings (3391 JP) and Welcia Holdings (3141 JP) AGMs to elect directors and approve the share exchange agreement to merge the two.
10% Tsuruha shareholder Orbis objects to the merger ratio AND the later tender whereby Aeon goes to 51%, saying everything is underpriced. ISS/GlassLewis recommend voting against the merger.
I haven’t seen the proxy reports but I’ve done the math. Investors/arbs should look at the possibilities/probabilities and understand what dependencies exist. Shareholders are not helpless, no matter the outcome.

Soundwill Holdings (878 HK): An Opportunity or Another HK Arbageddon?

The spread to the Foo family’s HK$8.50 offer for Soundwill Holdings (878 HK) has materially increased to 15.8% over the last two trading days. The vote is on 23 May.
Several readers have asked if the Soundwill offer will mirror the Goldlion Holdings (533 HK) deal break. The two schemes share similarities but are also different in several ways.
The share price action either reflects an imminent deal break or a result of a negative feedback loop. Tread carefully as this is a high-risk/high-reward situation.

HD Hyundai Marine Solution Block Deal Sale of 8.5% of Outstanding Shares

After the market close today, it was announced that KKR is selling 3.81 million shares (8.5% of outstanding shares) of HD Hyundai Marine Solution in a block deal sale.
The expected block deal sale price is 145,000 won to 148,000 won per share, which represent 7.96% to 9.83% discount to the closing price of 160,800 won on 22 May.
Once this block deal is completed, KKR’s remaining stake in HD Hyundai Marine Solution will be reduced to 11% (4.94 million shares).

Clearing Confusion on Samsung C&T’s Forced Holding Co Conversion: Key Trade Angle in Biologics Split

Samsung C&T’s holding ratio mainly hinges on its Samsung Biologics stake; Samsung Electronics’ 5% isn’t counted, and Samsung SDS is excluded since Samsung Electronics is its largest shareholder.
This ties to calls for Samsung’s governance overhaul, aiming for C&T to avoid forced conversion while boosting control over Samsung Electronics via bold, more aggressive moves than expected.
Samsung C&T will likely sell some Biologics shares around its in-kind contribution to Epis, timing sales based on post-listing price action.

Pony AI IPO Lockup – US$4.3bn Lockup Release with Stock at 69x EV/Sales

By Sumeet Singh

Pony AI (PONY US) raised around US$260m in its upsized US ADR listing in Nov 2024. The lockup on its pre-IPO investors is set to expire soon.
As per Frost & Sullivan, Pony AI was among the first companies in China to obtain licenses to operate fully driverless robotaxis in all four Tier-1 cities in China.
In this note, we will talk about the lockup dynamics and possible placement.

Samsung Biologics: Creation of a Holding Company to Split CDMO and Biosimilar Businesses

By Special Situation Investments

On 22 May, Samsung Biologics (207940 KS) announced that that it plans to establish a new holding company called Samsung Bioepis Holdings through a spin-off.
Samsung Bioepis Holdings will fully incorporate Samsung Bioepis as a wholly owned subsidiary. Samsung Bioepis will focus on the biosimilars business. Samsung Biologics will focus on the CDMO business.
There is likely to be mixed reactions to Samsung Biologics’ announcement to create a holding company structure to split the CDMO and biosimilar businesses.

Air Canada’s Odd-Lot Tender Offer: Potential Upside Amid CapEx Challenges and Transborder Revenue Declines

Air Canada is conducting a tender offer for ~8% of shares, prioritizing odd-lot holders, with potential upside.
The company plans significant CapEx for fleet modernization, impacting free cash flow and financial projections until 2028.
Air Canada’s valuation is low compared to peers, trading at 3.3x EBITDA, with a 54% EBITDA growth target by 2028.

No Compromise: Deal on Hold, and UniCredit Won’t Pay More

Consob suspends offer: Italy’s market regulator halts UniCredit’s bid amid unresolved regulatory conditions and growing uncertainty.
Shareholders push back: With Crédit Agricole holding 19.8%, resistance builds against a bid lacking premium or clarity.
Higher bid unlikely, but Possible: UniCredit has room to raise terms, but tighter capital impact and ROI pressure post-DC rejection make an improved offer improbable without regulatory or shareholder shifts.

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May 22

Daily Brief Event-Driven: [Japan M&A] Seven Bank (8410) – Seven & I Selldown and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

[Japan M&A] Seven Bank (8410) – Seven & I Selldown, Itochu Buy-In, Not on My Bingo Card But Not Bad
CATL (3750 HK): The Tail Wags the Dog
Mayne Pharma (MYX AU): A Case of Buyer’s Remorse
[Japan M&A] Shibaura in Limbo – “Neutral” On Minebea And “Reserves Opinion” On YAGEO Bid, Waiting…
Intel Summary on Samsung Biologics Split and Samsung C&T’s Acquisition of Samsung Electronics Shares
Shibaura Electronics (6957 JP): Board’s Changed Stance as Minebea Hopes Reg Approvals Derail Yageo
ESR Group (1821 HK): Done Deal as Scheme Vote on 13 June
Key Microstructure Angles to Watch as NXT Volume Caps Kick In
ESR (1821 HK): 13th June Vote On Starwood/Warburg’s Offer
Fintech Alpha: Unlocking Hidden Value as Corpay Circles

[Japan M&A] Seven Bank (8410) – Seven & I Selldown, Itochu Buy-In, Not on My Bingo Card But Not Bad

Seven Bank Ltd (8410 JP) has been the ugly duckling of Japan e-banks since it got competition in the form of Rakuten Bank (5838) and SBI Sumishin (7163).
Last year, it was posited, and then confirmed, that Seven & I Holdings (3382 JP) wanted to sell down to de-consolidate. NTT Docomo wanted to buy a bank.
I thought it a good match but no deal has been done. So now we get a different deal – it’s weird for Itochu, but bodes well for Seven Bank

CATL (3750 HK): The Tail Wags the Dog

The buying in Contemporary Amperex Technology (3750 HK) over the last couple of days has dragged Contemporary Amperex Technology (CATL) (300750 CH) higher as the arbs trade the AH spread.
The Fast Entry into a global index could keep CATL (3750 HK) supported over the next few trading days, but reality will take hold pretty soon.
Short CATL (3750 HK) / long CATL (300750 CH) offers great risk/reward, while an outright CATL (3750 HK) short offers higher return albeit at a much higher level of risk.

Mayne Pharma (MYX AU): A Case of Buyer’s Remorse

Mayne Pharma (MYX AU) disclosed that Cosette asserts that a material adverse change has occurred due to its trading performance, litigation and FDA untitled letter.
Cosette has not quantified the impact, and Mayne disputes the assertion. Mayne’s trading performance is likely the largest contributor to Cosette’s MAC-related claims.
Precedent schemes suggest a lower offer is the best-case scenario. An unwilling bidder looking for angles, contractually, to exit suggests the likely outcome is a scheme termination.

[Japan M&A] Shibaura in Limbo – “Neutral” On Minebea And “Reserves Opinion” On YAGEO Bid, Waiting…

Yageo Corporation (2327 TT) approached Shibaura Electronics (6957 JP) for a takeover at ¥4300. Shibaura dismissed them and asked Minebea Mitsumi (6479 JP) to overbid. They did at ¥4500.
Then Yageo overbid Minebea at ¥5400, who then overbid Yageo at ¥5500, who then re-overbid at ¥6200. Despite not having its FEFTA Approval in place, YAGEO overbid and launched.
The Minebea CEO objected. We don’t know status. Now the Shibaura Special Committee has paused, supporting but not recommending the Minebea bid and Neutral on Yageo. We are in limbo.

Intel Summary on Samsung Biologics Split and Samsung C&T’s Acquisition of Samsung Electronics Shares

Samsung Biologics is spinning off Samsung Bio Holdings, transferring full Samsung Bioepis shares; shareholders keep stakes in both, with an expected 70:30 split favoring Biologics.
Post-Split, major shareholders keep stakes; they’ll transfer Biologics shares to Bio Holdings, which becomes parent owning 74.34% Biologics and 100% Bioepis, meeting holding company rules.
Samsung C&T’s restructuring carves out Biologics into a holdco, lowering valuation to avoid forced holding company conversion and enabling future Samsung Electronics share acquisition.

Shibaura Electronics (6957 JP): Board’s Changed Stance as Minebea Hopes Reg Approvals Derail Yageo

The Shibaura Electronics (6957 JP) Board supports Minebea Mitsumi (6479 JP) JPY5,500 offer, but has shifted its recommendation from tendering to a neutral stance.
The Board maintains that it is not yet in a position to provide an opinion on Yageo’s JPY6,200 offer due to concerns on feasibility and synergies.
Minebea hopes Yageo will withdraw due to its failure to secure regulatory approvals. If Yageo secures the required approvals, Minebea will actively consider measures.

ESR Group (1821 HK): Done Deal as Scheme Vote on 13 June

ESR Group (1821 HK)’s IFA opines that the consortium’s HK$13.00 offer is fair and reasonable. The vote is on 13 June.
Key conditions include approval by at least 75% of independent shareholders (<10% of independent shareholders rejection). The offer price is final.
This is a done deal due to the substantial irrevocables. At the last close and for the 10 July payment, the gross/annualised spread is 1.3%/9.12%.

Key Microstructure Angles to Watch as NXT Volume Caps Kick In

With the September review looming, base case is NXT holds steady for now, then starts cutting volume around mid-July — a move that could trigger dislocations in NXT-heavy names.
In theory, SOR shifts retail flow from NXT to KRX seamlessly—but if retail floods in fast, KRX’s institution-heavy book might struggle, causing depth issues or delayed fills.
The attached Excel shows NXT volume share by ticker — a useful read on names heavily reliant on NXT ahead of July caps, where pressure points may start to emerge.

ESR (1821 HK): 13th June Vote On Starwood/Warburg’s Offer

On the 4th December 2024, the Starwood/Warburg Pincus Consortium announced a firm pre-conditional Offer for ESR Group (1821 HK) at HK$13/share (best & final), by way of a Scheme.
There was a raft of pre-cons, however processing went like clockwork, and all were satisfied by the 15th May.
The Scheme Doc is now out, with a Court Meeting on the 13th June, and payment on or before the 10th July. The IFA (Anglo Chinese) says “fair & reasonable“.

Fintech Alpha: Unlocking Hidden Value as Corpay Circles

PUSU deadline looms on May 30, giving Corpay limited time to submit a firm bid or walk away—raising the stakes for investors monitoring deal certainty and potential upside.
Alpha’s valuation remains compelling, with a blended takeover value of ~3,795p vs. a current share price of 3,050p, implying ~24% upside on deal completion.
Synergies estimated at ~99p per share could lift deal terms; I see a 65% probability of a formal bid, recommending accumulation around 3,000p for event-driven investors.

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May 21

Daily Brief Event-Driven: CATL (3750 HK): Reassessing Index Fast Entry; Need Overallotment Exercised by Tomorrow and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

CATL (3750 HK): Reassessing Index Fast Entry; Need Overallotment Exercised by Tomorrow
Melco (200 HK) Trading “Cheap” Into Rights Issue
[Japan Buybacks] ShinEtsu Chem (4063) – How the FCSR Works
Surge in ETF Trading Share on KOSPI: Spot Dislocation Opportunities from Leverage Trades
Samsung Electronics’ Phase 2 Buyback Disposal Plan Virtually Finalized: Two Key Trading Implications
Mayne Disagrees With Cosette On MAC

CATL (3750 HK): Reassessing Index Fast Entry; Need Overallotment Exercised by Tomorrow

CATL (3750 HK) is trading at a 6.9% premium to Contemporary Amperex Technology (CATL) (300750 CH) – if that is due to expectations of Fast Entry, that premium could drop.
CATL (3750 HK) has not announced the overallotment option as exercised and that puts Fast Entry at risk. An announcement prior to the close tomorrow could lead to Fast Entry.
The earliest inclusion could be at the close on 30 May while the other global index inclusion looks likely in December.

Melco (200 HK) Trading “Cheap” Into Rights Issue

In my stub monitor flagged in StubWorld: Toyota Industries/Motors, GMO Internet, I see Melco International Development (200 HK) is trading “cheap” to Melco Resorts & Entertainment (MLCO US).
Last month, Melco proposed one new rights share for two existing shares at a subscription price of HK$1.0286/share, a 72.93% discount to undisturbed, and a 64.28% discount to the TERP.
Lawrence Ho will backstop ~54% of the rights, if need be. Depending on the level of support for the rights, expect Lawrence to further chip away against minorities.

[Japan Buybacks] ShinEtsu Chem (4063) – How the FCSR Works

Late April, Shin Etsu Chemical (4063 JP) announced a huge ¥500bn 200mm shares (10.2%) buyback. That was never ever going to happen. That needed a ¥2500 share price, not ¥4300+.
But it was big, and started in late May. Today, they announced how. It is a “Japan ASR”, the Nomura version, this time with an interesting twist.
In response to a couple of reader questions today, I provide a brief overview of how these things work.

Surge in ETF Trading Share on KOSPI: Spot Dislocation Opportunities from Leverage Trades

ETF trading topped 50% of KOSPI turnover in April—a first outside the March 2020 COVID crash—rising nearly 14 percentage points month-to-month despite a sharp overall volume drop.
Despite a 30% drop in KOSPI volume, leveraged and inverse ETFs surged 28% and 34%, led by ‘KODEX Leverage’ and ‘KODEX 200 Futures Inverse 2X’ hitting top ADV ranks.
Some local traders see opportunities in spot market dislocations amid volatility, futures rollovers, and ETF-driven supply-demand imbalances likely to persist from last month’s surge.

Samsung Electronics’ Phase 2 Buyback Disposal Plan Virtually Finalized: Two Key Trading Implications

If ₩500B comes from common shares, about 40M shares retire, raising Samsung Life and Fire stakes to 10.07%, requiring a ₩0.23T block sale to trim excess.
Slightly smaller than last time but still notable, the insurers acted fast in February. Expect a ~0.07% block trade soon, though price impact was mild previously.
Watch for preferred share outperformance as phase two buyback hits 0.66% common vs. 0.81% preferred (effective buyback assuming cancellation); similar dynamics may repeat in the larger ₩4T phase three buyback.

Mayne Disagrees With Cosette On MAC

As widely speculated, Cosette asserted to Mayne Pharma (MYX AU) on the 17th May a Material Adverse Change (MAC) has occurred.
Mayne disagrees, and views the pre-requisites for a MAC, as defined in the SID, have not been established.
What now? The Scheme is not terminated. Both parties remain in consultation. If those talks are not satisfactory (say, a price reduction [my guess]), Cosette said it will walk.

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May 20

Daily Brief Event-Driven: [Japan M&A/Activism] Toyota Industries (6201) Deal Could Be Announced Near-Term and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

[Japan M&A/Activism] Toyota Industries (6201) Deal Could Be Announced Near-Term
Toyota Industries (6201 JP): A Potential Privatisation Sooner than Expected
[Japan M&A] Mitsubishi Logisnext (7105) – The Deal Still Looks Mighty Good
Telcoware: Tender Offer To Take the Company Private
Xanadu Mines (XAM AU) Inks Deal With Bastion After Zijin Tarries
Svenska Handelsbanken: Arbitraging Brought to Book
Elevation Oncology’s Strategic Review: Potential Liquidation or Sale Offers 60% Upside Opportunity at $0.28/share
Weekly Update (MCK, LBTYA, SNRE, AMRZ)
StubWorld: Toyota Industries/Motors, GMO Internet

[Japan M&A/Activism] Toyota Industries (6201) Deal Could Be Announced Near-Term

Friday 25 April, Toyota Industries (6201 JP) released earnings for last year, guidance for this year and a Bloomberg scoop suggested Toyota Motors chairman Akio TOYODA would launch an MBO.
In some ways surprising, but activists/”noisy shareholders” and TSE guidance on dual listings caused pressure, and Toyota Motors was trying to walk the good governance walk.
I discussed the situation here on Day 1, and here a few days later. Long-only shareholders sold. Today, Kyodo had a follow-up article. Then Nikkei. Looks more solid now.

Toyota Industries (6201 JP): A Potential Privatisation Sooner than Expected

Kyodo news agency reported that Toyota Industries (6201 JP) plans to accept a tender offer by Toyota Motor (7203 JP) and Toyota Chairman Akio Toyoda, potentially in May or June.
The Nikkei reported that Toyota plans to borrow JPY3 trillion to fund the acquisition. These articles provide more clarity on price, composition of the offeror, financing structure, and timeline.
These articles increase the probability of a tender offer around JPY18,515 (JPY6 trillion market cap). At the last close, the gross spread was 12.1%.

[Japan M&A] Mitsubishi Logisnext (7105) – The Deal Still Looks Mighty Good

On 9 May Mitsubishi Logisnext Co., Ltd. (7105 JP) delayed earnings by 30 minutes. Shares popped. Then earnings were released, no deal, and shares crashed. Now they are rebounding.
But they remain volatile and subject to dips like the one this AM -5% at one point. Fears may be due to the idea that first smoke here was Dec-2024.
5 months later, no deal yet. Bids were due pre-earnings but with tariffs and writedowns, one wonders if bidders were waiting for results.

Telcoware: Tender Offer To Take the Company Private

Telcoware announced that the largest shareholder and CEO of the company (Keum Han-Tae) will be undertaking a tender offer of 2.332 million shares (25.24%) to take the company private.
Tender offer price is 13,000 won per share. Tender offer period is from 19 May to 10 June.
Telcoware has 4.08 million treasury shares, accounting for 44.1% of outstanding shares.

Xanadu Mines (XAM AU) Inks Deal With Bastion After Zijin Tarries

Xanadu (XAM AU), a Mongolian copper-gold mining play, has entered a deal with Bastion, two weeks after an agreement with JV partner and major shareholder Zijin Mining (601899 CH) lapsed.
Bastion, which comprises Singapore-based Baroo and Xanadu director Ganbayer Lkhagvasuren, are offering A$0.08/share in cash. Bastion is also subscribing for 286.8mn shares, at A$0.06/share, or 13% fully diluted.
The off-market Offer is contingent on a 50.1% acceptance hurdle. CAAF (11.85%) is supportive. No word on how Zijin (19.8% stakeholder, before dilution) will play this.

Svenska Handelsbanken: Arbitraging Brought to Book

By Special Situation Investments

Handelsbanken B shares trade at a ~55% premium to A shares despite lower voting rights, liquidity, and index status — a rare and statistically extreme dislocation.
Regression and post-2020 cointegration confirm mean-reverting behavior, supporting a relative value trade favoring SHB A over SHB B.
Structural constraints on arbitrage and asymmetric flow dynamics may delay convergence, but the pricing gap remains fundamentally unjustified and actionable.

Elevation Oncology’s Strategic Review: Potential Liquidation or Sale Offers 60% Upside Opportunity at $0.28/share

Elevation Oncology’s market cap is $16.5m, trading at a 50% discount to its mid-year cash guidance of $30m-$35m.
The company has no debt, $0.5m in payables, $3.7m in accrued expenses, and guided mid-year cash of $30m+.
Potential upside of 30%-60% is based on liquidation or buyout scenarios, considering working capital liabilities and cash burn.

Weekly Update (MCK, LBTYA, SNRE, AMRZ)

Before I dig into my regular update, I want to share one chart that caught my eye this week.
Colin King did a nice job modeling out Lionsgate RemainCo Stub / Starz valuation from last May to now.
Interesting to see that at one point it was trading at a negative $1 price.

StubWorld: Toyota Industries/Motors, GMO Internet

Given recent – and ongoing developments – with Toyota Industries (6201 JP) and GMO Internet (4784 JP), I’m revisiting my NAVs.
Preceding my comments on the Toyota Group and GMO, 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%.

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May 19

Daily Brief Event-Driven: [Japan Buybacks] ¥7.3trln of Buybacks Announced In the Last Month – Data on Each and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

[Japan Buybacks] ¥7.3trln of Buybacks Announced In the Last Month – Data on Each, Plus History
A/H Premium Tracker (To 16 May 2025): AH Premia Contract Small Again. BYD and CMB Go Negative.
Merger Arb Mondays (19 May) – Seven & I, Nissin, Welcia/Tsuruha, Mayne, ESR, OneConnect, Frasers
HK Connect SOUTHBOUND Flows (To 16 May 2025); Volumes Pick Up, Net Flows Drop; Banks Still Strong
Reject Shop (TRS AU): 23rd June Vote On Dollarama’s Offer
Liquid Universe of European Ordinary and Preferred Shares: May ’25 Report

[Japan Buybacks] ¥7.3trln of Buybacks Announced In the Last Month – Data on Each, Plus History

Buybacks are a central part of Corporate Japan’s effort to improve corporate/capital governance. Lots of cross-holders want/need to sell. Lots of companies want to reduce excess equity.
This earnings season has seen a LOT of new buybacks announced. ¥7.3trln in the last month and that doesn’t even include the biggest buybacks extant by March-end companies.
We are experimenting with new ways of displaying data/analytics for buybacks in Japan. To that end, we have a new tool. We hope users find it useful. We invite feedback.

A/H Premium Tracker (To 16 May 2025): AH Premia Contract Small Again. BYD and CMB Go Negative.

AH spreads are slightly narrower, but performance is concentrated in fewer names and broad spread volatility is up. BYD (1211 HK) AH is negative now, maybe on HSTECH inclusion expectations.
I didn’t expect much out of Geneva last weekend. I was wrong in that there was a big announcement, but maybe not wrong because content was pretty slim.
The data tables below update on a daily basis in the Tools section of Smartkarma. The SOUTHBOUND Flow Monitor and AH Monitor are both there free for SK readers.

Merger Arb Mondays (19 May) – Seven & I, Nissin, Welcia/Tsuruha, Mayne, ESR, OneConnect, Frasers

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: Insignia Financial (IFL AU), ENN Energy (2688 HK), Smartpay Holdings (SPY NZ), Seven & I Holdings (3382 JP), ZEEKR (ZK US), Mayne Pharma (MYX AU), Smart Share.
Lowest spreads: Bright Smart Securities And (1428 HK), Dada Nexus (DADA US), Nissin Corp (9066 JP), Sinarmas Land (SML SP), Fujitsu General (6755 JP), Torii Pharmaceutical (4551 JP).

HK Connect SOUTHBOUND Flows (To 16 May 2025); Volumes Pick Up, Net Flows Drop; Banks Still Strong

Gross SOUTHBOUND volumes averaged more than HK$100bn a day this past week, which gets us back above halfway to the peak earlier this spring. Net flows were negative HK$8bn+.
Among the top buys as a percentage of volume, financials, utilities, and energy REALLY stand out. Among top sells, industrials, info tech, and consumer discretionary are tops.
The data tables below update on a daily basis in the Tools section of Smartkarma. The SOUTHBOUND Flow Monitor and AH Monitor are both there free for SK readers.

Reject Shop (TRS AU): 23rd June Vote On Dollarama’s Offer

Back on the 27th March, Reject Shop (TRS AU), a discount variety store, has entered into a Scheme Implementation Deed with Canadian outfit Dollarama (DOL CN).
Dollarama Offered A$6.68/share, a 112% premium to last close. The Offer does NOT require FIRB signing off. The Offer has the backing of TRS’ largest shareholder, Kin Group (20.8%).
The Scheme Booklet is now out, with a Scheme Meeting on the 23 June, and expected payment on or before the 22nd July. The IE (Kroll) says “fair & reasonable“.

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