Event-Driven

The difference between an LBO (Leveraged Buy Out) and an MBO (Management Buy Out) is that an MBO is usually just an LBO where the buyers don’t replace the CEO.
After 4+mos of speculation/noise since a Bloomberg article said Topcon was weighing takeover bids, we have a deal. KKR and JIC will buy out Topcon in an “MBO” at ¥3,300/share.
Unusually, the lower limit is 50.1%. This is an OK exit for the “Bad Cops” but not a great one. It should be higher. Start delayed for 4 months.

Weekly Deals Digest (30 Mar) – Seven & I, Topcon, ENN Energy, Jinke Smart, Sinarmas Land, Gold Road

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: DN Solutions (298440 KS) seeks to raise US$1.1 billion in a KRX IPO.
Event-Driven developments: Seven & I Holdings (3382 JP), Topcon Corp (7732 JP), ENN Energy (2688 HK), Jinke Smart Services (9666 HK), Sinarmas Land (SML SP), Gold Road Resources (GOR AU).

Korea Short Selling: Off to the Races

Short selling in Korea resumes in a couple of hours. Expect heightened volatility for a few days before things settle down.
Foreign investors have increased their holdings over the last five weeks and there could be further buying in select stocks on stock price drops.
The KOSPI 200 INDEX has outperformed the KOSDAQ 150 Index, and the forecast index deletes have underperformed the indices indicating that there will be positioning for the short-sell resumption.

Jinke Smart Services (9666 HK): Boyu to Launch a Privatisation Offer?

Jinke Smart Services (9666 HK) is in a trading halt “pending the release of an announcement pursuant to the Hong Kong Code on Takeovers and Mergers which constitutes inside information.”
It is likely that Boyu, the largest shareholder, is seeking to privatise Jinke. The privatisation of PRC-incorporated entities is usually done through a merger by absorption.
I use several methods to triangulate the likely offer price, which suggests a price range of HK$10.00-16.86, with an average of HK$12.47, a 45% premium to the last close.

Vesync (2148 HK): Scheme Vote on 23 April

Vesync (2148 HK)’s IFA opines that the Yang family’s HK$5.60 cash offer is fair and reasonable. The IFA does not recommend the scrip option. The vote is on 23 April.
Key conditions include approval by at least 75% of independent shareholders (<10% of independent shareholders rejection). The offer price is final.
The vote is low-risk due to a lack of opposition. At the last close and for the 15 May payment, the gross/annualised spread is 2.9%/28.7%.

Merger Arb Mondays (31 Mar) – ENN Energy, ESR, Vesync, Seven & I, Topcon, Sinarmas Land, Gold Road

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: ENN Energy (2688 HK), Seven & I Holdings (3382 JP), OneConnect Financial Technology (OCFT US), Insignia Financial (IFL AU), Smart Share Global (EM US), Soundwill Holdings (878 HK).
Lowest spreads: Makino Milling Machine Co (6135 JP), Shibaura Electronics (6957 JP), PointsBet Holdings (PBH AU), Millennium & Copthorne Hotels Nz (MCK NZ), Tonami Holdings (9070 JP).

Vesync (2148 HK): 23rd April Scheme Vote. Done Deal

On the 27th December, Vesync (2148 HK), a manufacturer of small home appliances, announced an Offer, by way of a Scheme, from the Yang family controlling ~69.04% of Vesync.
The Cancellation Price of $5.60/share – declared final – was a 33.3% premium to undisturbed, and above the 2020 IPO price of HK$5.52/share.
The Scheme Doc is now out, with a Court Meeting on the 23rd April, and expected payment on or before the 15th May. The IFA (Somerley) says “fair & reasonable”.

The Reject Shop: Dollarama’s Done Deal

Reject Shop (TRS AU), a discount variety store, has entered into a Scheme Implementation Deed with Canadian outfit Dollarama (DOL CN).
Dollarama is offering A$6.68/share, a 112% premium to last close. The Offer does NOT require FIRB signing off. The Offer has the unanimous backing of both boards.
The Offer also has the backing of TRS’ largest shareholder, Kin Group (20.8%). Implementation is expected July 2025. This is done.

MFE Tunes In to ProSieben for a Pan-European Broadcast Power Play

MFE’s €5.70/share offer reflects strategic aims, not a traditional control premium, and values ProSieben near peer multiples amid industry disruption and weak organic growth prospects.
The deal structure and German takeover law enable MFE to carry out a creeping takeover strategy, allowing it to gradually increase its stake post-settlement without launching a new public offer.
Estimated net synergies of €1.00–1.39 per share, boosting the deal’s potential strategic return.Market skepticism is visible in the -10.2% gross spread.

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Mar 30

Daily Brief Event-Driven: Topcon (7732 JP): KKR/JICC-Sponsored Preconditional MBO and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Topcon (7732 JP): KKR/JICC-Sponsored Preconditional MBO, with Caveats
ETF Flows in Q1: Inflows for Taiwan, Outflows for China
(Mostly) Asia-Pac M&A: Gold Fields, Sinarmas Land, Shinko Electric, Domain, Japfa, Tsuruha/Welcia
The Widjaja Family’s Tilt For Sinarmas Land: This Needs A Bump
Last Week in Event SPACE: Seven & I, ENN Energy, Sun Corp, Great Eastern Holdings

Topcon (7732 JP): KKR/JICC-Sponsored Preconditional MBO, with Caveats

Topcon Corp (7732 JP) recommended a KKR/JICC-sponsored preconditional MBO at JPY3,300, representing an 87.9% premium to the undisturbed price and a 5.4% premium to the last close.
The offer is preconditional on regulatory approvals and is scheduled to start at the end of July. The offer is attractive and represents an all-time high.
The offer comes with caveats: the Board recommendation is not unanimous, the lower limit is set below the two-thirds threshold, and KKR offered a higher price during the discussions.

ETF Flows in Q1: Inflows for Taiwan, Outflows for China

The largest ETF inflows in the region have been in Taiwan as investors rush into indices that have higher dividend yields.
China had large inflows last year as markets floundered. With markets trading in a range over the last 6 months, those flows have reversed in Q1 this year.
Australia has seen net inflows this year, while there have been net outflows from Hong Kong, India and Japan focused ETFs.

(Mostly) Asia-Pac M&A: Gold Fields, Sinarmas Land, Shinko Electric, Domain, Japfa, Tsuruha/Welcia

I tally 55 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma.
Three news new deals discussed this week: Gold Road Resources (GOR AU),ENN Energy (2688 HK), and Sinarmas Land (SML SP).
Key updates/news took place on: Shinko Electric Industries (6967 JP), Domain Holdings (DHG AU),Japfa Ltd (JAP SP), Paragon REIT (PGNREIT SP), and Tsuruha Holdings (3391 JP)/Welcia Holdings (3141 JP).

The Widjaja Family’s Tilt For Sinarmas Land: This Needs A Bump

The family trust of the Widjaja Family has made a voluntary unconditional general Offer for the 29.7% in Sinarmas Land (SML SP) not held.
The S$0.31 cash Offer (not declared final) for the (mainly) Indo property play is a 12.9% premium to last close; but a 73.9% discount to Sinarmas’ 1H24 NAV of S$1.19/share.
The Offer is unconditional in all respects. Trading a spread through terms. This deserves a bump.

Last Week in Event SPACE: Seven & I, ENN Energy, Sun Corp, Great Eastern Holdings

By Special Situation Investments

If you don’t think Seven & I (3382 JP)‘s Standalone Plan has legs to go north of here, or ACT gets its act together, then you should sell into strength.
ENN Energy (2688 HK)‘s cash and scrip (into a unlisted H-share-equivalent entity) Offer was not what the doctor ordered.
Sun Corp (6736 JP) is cheap to its holding in Cellebrite DI (CLBT US). How cheap depends on the form and structure of its eventual exit.

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Mar 29

Daily Brief Event-Driven: 4 Spin-offs with Insider Buying and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

4 Spin-offs with Insider Buying
The Hot Chatter in the Local Market: Tax-Free Dividends – Is Samsung In?
NIOX Group Faces Potential Acquisition by Keensight Capital Amid Ongoing Private Sale
Ashok Leyland Restructuring: Switch UK Winds Down & Switch India’s Strategic Pivot

4 Spin-offs with Insider Buying

By Richard Howe

One factor that I closely follow in the spin-off universe is insider buying.
Here’s what Peter Lynch wrote about insiders and spin-offs in One Up on Wall Street: [Spin-offs] are a fertile area for amateur investors…….A month or two after the spinoff is completed, you can check to see if there is heavy insider buying among the new officers and directors.
There are four names in my universe that have interesting insider activity.

The Hot Chatter in the Local Market: Tax-Free Dividends – Is Samsung In?

By Sanghyun Park

Chosun reports that some Samsung affiliates are exploring tax-free dividends at the operational level, with execs reportedly briefed on the idea.
Surprisingly, regulators and politicians haven’t objected to tax-free dividends, which ironically align with the value-up policy. The delay in Samsung’s value-up announcements may be due to this decision.
It’s unclear if Samsung Electronics and Life will drop tax-free dividends, but if regulators approve, they could introduce it suddenly in their value-up updates, especially with Lee Jae-yong’s cash crunch.

NIOX Group Faces Potential Acquisition by Keensight Capital Amid Ongoing Private Sale

NIOX Group received a non-binding takeover proposal from Keensight Capital at 81p/share, with a 9% spread.
NIOX’s management is open to the offer, having previously run a limited private sale process with ongoing negotiations.
Valuation at 81p/share aligns with industry standards, given NIOX’s growth, profitability, and upcoming product launches.

Ashok Leyland Restructuring: Switch UK Winds Down & Switch India’s Strategic Pivot

Ashok Leyland (AL IN) plans to shut manufacturing at its UK EV subsidiary, Switch Mobility UK, and shift focus to India and UAE plants.
The UK exit curbs cash burn and earnings drag, while Switch India, driven by rising demand, nears breakeven with 1800+ e-Bus orders and 80%+ e-LCV share.
This marks a value-accretive pivot, realigning capital to India’s high-growth EV market and improving group-level profitability and return metrics.

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Mar 28

Daily Brief Event-Driven: Tinycap Cash-Rich Cookpad (2193) With HUGE Buyback. AGAIN and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Tinycap Cash-Rich Cookpad (2193) With HUGE Buyback. AGAIN
FSS Surprisingly Halts Hanwha Aerospace’s Rights Offering Capital Raise Temporarily
Sinarmas Land (SML SP): Widjaja Family’s Light Voluntary Unconditional Offer
Quiddity Leaderboard ASX Jun25: De Grey Mining Intra-Review Replacement + More Regular Changes
Domain Holdings (DHG AU): CoStar Returns with a Final NBIO at A$4.43
Policy Shift: Inocsa Makes a Premium Move on Catalana Occidente

Tinycap Cash-Rich Cookpad (2193) With HUGE Buyback. AGAIN

Hugely cash-rich Cookpad Inc (2193 JP) wouldn’t hit my radar except for two things. 1) it was the target of Melco Holdings (6676 JP) chairman Maki-san a few years ago…
And 2) they did a huge buyback last year which pumped up the stock very bigly.
Maki-San appears long gone from the shares, but now they are doing another big buyback. Just as bigly. But there are new nuances this year.

FSS Surprisingly Halts Hanwha Aerospace’s Rights Offering Capital Raise Temporarily

After the market close on 27 March, the Financial Supervisory Service (FSS) surprisingly announced a temporary halt to the 3.6 trillion won rights offering capital raise of Hanwha Aerospace.
The FSS has requested a correction report to the massive paid-in capital increase securities report submitted by Hanwha Aerospace on 20 March.
While there could be a short term pop to Hanwha Aerospace’s stock tomorrow, we continue remain negative on Hanwha Aerospace over next 1 year mainly due to its stretched valuations

Sinarmas Land (SML SP): Widjaja Family’s Light Voluntary Unconditional Offer

Sinarmas Land (SML SP) has disclosed a voluntary unconditional offer from the Widjaja family at S$0.31 per share, a 12.7% premium to the undisturbed price of S$0.275 (24 March).
The offer is unattractive compared to historical trading ranges and implies a 74.0% discount to the last reported NAV per share of S$1.191 (30 June 2024).
The offer has not been declared final. As the Widjaja family aims to privatise Sinarmas, a bump is likely to secure the required minority acceptances.

Quiddity Leaderboard ASX Jun25: De Grey Mining Intra-Review Replacement + More Regular Changes

By Janaghan Jeyakumar, CFA

In this insight, we take a look at the potential index changes for ASX 200, 100, 50, and 20 in the run-up to the June 2025 index rebal event.
We expect one change for ASX 50, one change for ASX 100, and two changes for ASX 200.
The official index changes will be announced after the close on Friday 6th June 2025.

Domain Holdings (DHG AU): CoStar Returns with a Final NBIO at A$4.43

Domain Holdings Australia (DHG AU) announced a final non-binding proposal from Costar Group (CSGP US) at A$4.43, a 5.5% premium to the previous A$4.20 offer.
The scheme vote is low-risk as Nine Entertainment Co Holdings (NEC AU) seems supportive. Nine suggested that the revised price would result in after-tax cash proceeds of A$1.4 billion.
While attractive to precedent transaction multiples, the revised offer remains light compared to peer multiples. Nevertheless, expect a binding proposal to be forthcoming.

Policy Shift: Inocsa Makes a Premium Move on Catalana Occidente

Inocsa offers €50 per share for GCO, representing an 18.3% premium, aiming to consolidate control and delist the company from the Spanish stock exchange if thresholds are met.
GCO reported €623 million in FY 2024 net income, with strong solvency (242%) and leading positions in traditional and credit insurance across Spain and over 50 international markets.
With a fair value near €50.68/share and solid fundamentals, minority shareholders receive a full but not generous offer, lacking a typical control premium often seen in similar takeovers.

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Mar 27

Daily Brief Event-Driven: ENN Energy (2688 HK): ENN Natural Gas’ Preconditional Cash/Scrip Offer and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

ENN Energy (2688 HK): ENN Natural Gas’ Preconditional Cash/Scrip Offer
Shinko Electric (6967) – Chicken and Logistics
Changes to Hang Seng Methodology – Early Doors but $3bn a Side Across Major Indices
Korea Exchange Highlights 38 Companies That Could Be Delisted in 2025
ENN Energy (2688 HK) Privatization: Details & Index Implications
Norwegian Billionaire Øystein Spetalen’s Mandatory Bid for SAGA Pure
A Power Move: Naturgy Sparks a Strategic Rebalance
Taking Stock Off the Market: Alba’s Final Call

ENN Energy (2688 HK): ENN Natural Gas’ Preconditional Cash/Scrip Offer

ENN Energy (2688 HK) announced a pre-conditional privatisation from ENN Natural Gas (600803 CH)/ENN-NG comprising HK$24.50 cash per share + 2.9427 ENN-NG H Shares per ENN share.
The appraised offer value is HK$80.00 (HK$82.35, including the 2024 dividend), which is a tad optimistic. My calculations suggest a realistic offer value range of HK$71.47-76.32.
The offer is final. The precondition satisfaction is low-risk. A high AGM minority participation is a risk, but the scheme vote should pass as the offer terms are reasonable.

Shinko Electric (6967) – Chicken and Logistics

The Tender Offer closed end of last week. The bidder JICC-04 got 59.281mm shares. Most of what was left over – perhaps even more than 100%, was passive-owned.
More than 100%? How does that work? It works because of how the logistics goes.
And right now, the reason why the stock is trading well through terms is a matter of Chicken and Logistics.

Changes to Hang Seng Methodology – Early Doors but $3bn a Side Across Major Indices

Janaghan Jeyakumar, CFA put out June rebal predictions on HSCEI, HSTECH, and Hang Seng Internet & Infotech on 17-Mar-25 (and 7 mainland indices 19-21 March) and…
…the Quiddity team put out its regular predictions of all 7 major HS indices and 11 mainland indices, but on 21-March after the close, the Hang Seng team updated methodology.
They changed the way float is calculated for Secondary Listings in Hang Seng indices. It affects only a few names, but this adds US$2.7bn of buying to three names.

Korea Exchange Highlights 38 Companies That Could Be Delisted in 2025

On 26 March, Korea Exchange provided a list of 38 companies in KOSPI and KOSDAQ that are subject to delisting this year.
These 38 companies have a combined market cap of 3.4 trillion won.
Many of these companies have received ‘refusals of opinion’ from auditors in the audit report. Some of them also face charges of embezzlement and breach of trust.

ENN Energy (2688 HK) Privatization: Details & Index Implications

By Special Situation Investments

ENN Natural Gas has made a pre-conditional proposal to privatise ENN Energy (2688 HK). For each ENN share, shareholders will receive 2.9427 ENN Natural Gas shares and HK$24.5 in cash.
The ENN Natural Gas H-shares will be listed on the HKEX. The value received by ENN Energy shareholders depends on ENN Natural Gas stock performance and the H-share discount.
The ENN Natural Gas (600803 CH) H-shares are likely to replace ENN Energy (2688 HK) in global indices and the Hang Seng Index (HSI INDEX).

Norwegian Billionaire Øystein Spetalen’s Mandatory Bid for SAGA Pure

Øystein Spetalen’s 50% ownership in SAGA Pure triggers a mandatory bid, with shares trading at 1.31 NOK.
SAGA’s NAV is 1.79-1.87 NOK/share, with potential value from SDSD acquisition, contrasting with the mandatory bid price.
SAGA’s shareholder base is mostly retail, unlike SDSD, affecting potential bid strategies and investor expectations.

A Power Move: Naturgy Sparks a Strategic Rebalance

Naturgy’s 10% self-tender offer at €26.50/share offers a 3.5% premium and ~40.6% annualized return, pending CNMV approval with settlement likely by mid-May 2025.
Strategic negotiations may see Taqa acquire up to 29.9% from exiting funds GIP and CVC, rebalancing Naturgy’s ownership toward industrial partners and reducing geopolitical friction.
With treasury shares reissued, free float could rise to 21%, boosting ADTV above €12 million and enhancing index eligibility, while dividend payouts remain attractive despite temporary uplift being unsustainable.

Taking Stock Off the Market: Alba’s Final Call

Corporación Financiera Alba’s delisting offer runs from today until April 24, 2025, offering €84.20 per share with a 0.60% gross spread and no intention to implement a squeeze-out.
With shares trading at €83.70 and low daily liquidity (~€1 million), the offer presents a 6.05% annualized return for investors tendering into the deal by the estimated May 2 settlement.
Despite a 15.6% NAV discount, arbitrage through shorting Alba’s listed assets is complex and likely only feasible for institutional investors with efficient execution and access to shorting facilities.

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Mar 26

Daily Brief Event-Driven: Seven & I Holdings (3382 JP): Uncomfortable Truths and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Seven & I Holdings (3382 JP): Uncomfortable Truths
7&I (3382) – Clarifications of Clarifications But Progress Is Apparent
Fuji Soft (9749 JP) – KKR Does Deal With the Family To Squeeze Out Minorities – You Can Join Too
Event Driven- SKF India Demerger: The Automotive & Industrial Split
How to Clean Up Korea’s Borrowing Balance Stats
This Needs To Be Sorted: Great Eastern (GE SP)’s Protracted Suspension
NZME’s Strategic Review and Activist Involvement Signal Potential Value Unlock Through OneRoof Spin-Off and Board Overhaul

Seven & I Holdings (3382 JP): Uncomfortable Truths

Seven & I Holdings (3382 JP) has published two documents to respond to misinformation and detail its “constructive engagement” with Alimentation Couche-Tard (ATD CN).
The statements underscore the Board’s serious doubts about securing US antitrust approval. The significant discrepancies in the engagement timeline point to two parties at loggerheads.
While the Board claims it is pursuing a dual-track process to create value, the reality is that the process is designed to hinder Couche-Tard’s offer to facilitate the restructuring plan.

7&I (3382) – Clarifications of Clarifications But Progress Is Apparent

On 10 March, Seven & I Holdings (3382 JP) released a statement about its interactions with Alimentation Couche-Tard (ATD CN). The next day, ATD released its own. They didn’t match.
The 7&i spokesperson admitted one technical point, but investors seemed to believe ATD over 7&i. On 13 March, ATD held a presentation in Tokyo. Materials? Unchanged. Earnings comments? Unchanged.
This morning, 7&i released a document which “corrects the record regarding critical false and misleading claims about 7&i’s engagement with Alimentation Couche-Tard (ACT).” OUCH. The stock fell.

Fuji Soft (9749 JP) – KKR Does Deal With the Family To Squeeze Out Minorities – You Can Join Too

KKR’s Second Tender Offer for Fuji Soft Inc (9749 JP) ended 19 February 2025 and KKR got a whopping 57.9% after Bain bowed out. It was close.
The Nozawa founder said it would not tender. Others family members may have, but now KKR has signed a deal with Nozawa family company YK NFC, to support the squeezeout.
Assuming, Nozawa Hiroshi’s stake and the NFC stake remain unchanged, that cements the result of the 25 April AGM. But there may be games to play.

Event Driven- SKF India Demerger: The Automotive & Industrial Split

SKF India Ltd (SKF IN) has announced the demerger of its industrial business, which will be listed separately for enhanced focus and operational efficiency in both segments.
The company’s automotive business has high volume but low margins, whereas the industrial segment offers higher margins, highlighting a significant contrast in profitability between the two business segments.
The automotive business would attract investors seeking long-term, steady growth, while the industrial segment would appeal to investors focused on higher margins and more lucrative returns.

How to Clean Up Korea’s Borrowing Balance Stats

By Sanghyun Park

Local traders size up borrowing balances by comparing them to free-float shares, using KRX data for consistency. While not always exact, it’s the go-to reference for most traders.
They usually watch for borrowing balances crossing 3% of float, triggering price action. With short selling back, many are now bumping that threshold to 4%.
Borrowing balance structures differ between large and small/mid-caps. Traders use a 1 trillion KRW market cap threshold to split them, aligning with TMI indices for long/short setups.

This Needs To Be Sorted: Great Eastern (GE SP)’s Protracted Suspension

By Special Situation Investments

Back on the 10th May 2024, OCBC (OCBC SP) launched a voluntary unconditional general Offer for the 11.56% in life/non-life insurer Great Eastern Holdings (GE SP) not held.
The Offer closed on the 12th July with OCBC holding 93.62%. Shares were subsequently. suspended. And have been suspended ever since. Compulsory acquisition was not afforded.
The SGX has thrice granted OCBC an extension of time to restore the float. UK-based activist Palliser is agitating for better terms. Time for a bump.

NZME’s Strategic Review and Activist Involvement Signal Potential Value Unlock Through OneRoof Spin-Off and Board Overhaul

NZME Limited’s strategic review of OneRoof aims for potential separation, with activist Jim Grenon acquiring a 13.5% stake.
Grenon and Osmium Partners are pushing for board changes and OneRoof’s monetization, suggesting a possible spin-off.
The sum-of-the-parts valuation estimates NZME’s stock at A$1.49/share, implying a 35% upside from current levels.

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Mar 25

Daily Brief Event-Driven: Xiaomi (1810 HK)’s US$5bn Placement: Unfavourable Index Dynamics but Strong Momentum and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Xiaomi (1810 HK)’s US$5bn Placement: Unfavourable Index Dynamics but Strong Momentum
Tokyu Corp (9005) To Lift Stake in Tokyu REIT (8957) Again – Bigger Than You Think It Is
Gold Road (GOR AU): Rejects an NBIO from Gold Fields (GFI US)
Short Selling Resuming on 31 March in Korea – Stocks With Highest Short Selling Lending Balance
StubWorld: Sun Corp (6736 JP) Is Still Inexpensive To Its Cellebrite Stake
More Gold Fever: Gold Field’s Hostile Tilt For Gold Road
Insiders’ Playbook: Who’s Buying and Selling Amid Market Turbulence?
Telefónica: Execution and Valuation Update

Xiaomi (1810 HK)’s US$5bn Placement: Unfavourable Index Dynamics but Strong Momentum

Xiaomi Corp (1810 HK) is looking to place 750m shares at a price range of HK$52.8-54.6/share, a 4.2-7.4% discount from last. That could raise up to HK$40.95bn (US$5.27bn).
There will be limited passive buying near-term. There will be more passive buying at the end of May. Then there will be passive selling early June.
Shorts will be hurting from the relentless move higher in the stock and there could be short covering if the stock moves lower from these levels.

Tokyu Corp (9005) To Lift Stake in Tokyu REIT (8957) Again – Bigger Than You Think It Is

Today, Tokyu Corp (9005 JP) announced it would increase its stake its family REIT, buying up to 48,880 units or 5.0% of units out over the next six months.
This comes a couple of days after Hankyu Hanshin announced the same for its REIT, discussed here. Others have done so before. Tokyu has. Others will do so going forward.
The main reason? Squeeze the ‘share’ price higher. Get the REIT to 1.0x PNAV then stuff it with sponsor-held properties. That’s not bad. The goal is a higher price.

Gold Road (GOR AU): Rejects an NBIO from Gold Fields (GFI US)

Gold Road Resources (GOR AU) has rejected a non-binding proposal from Gold Fields (GFI US). The offer is A$2.27 plus value per share of Gold Road’s shareholding in De Grey.
The Board has rejected the offer mainly due to opportunistic timing and no value attributed to the potential underground expansion of the Gruyere mine (Gold Road/Gold Fields are JV partners).
The proposal is a logical consolidation to eliminate dis-synergies. The offer is reasonable compared to peer multiples, precedent transactions and historical trading ranges.

Short Selling Resuming on 31 March in Korea – Stocks With Highest Short Selling Lending Balance

Short selling balance in the Korean stock market was 62.4 trillion won as of 21 March 2025, up significantly from 47.2 trillion won three months ago.
Among the stocks in KOSPI with high short selling balance and high lending balance ratios include Posco Future M, Yuhan Corp, LG Energy Solution, and Hanwha Aerospace.
Among the stocks in KOSDAQ with high short selling balance and high lending balance ratios include Ecopro BM, Ecopro Co, HLB, and Eo Technics.

StubWorld: Sun Corp (6736 JP) Is Still Inexpensive To Its Cellebrite Stake

Sun Corp (6736 JP) has declined ~6% in the past month. Its 44.3% stake in Cellebrite DI (CLBT US) is worth ~186% of its market cap.
Preceding my comments on Sun Corp 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%.

More Gold Fever: Gold Field’s Hostile Tilt For Gold Road

Gold Road Resources (GOR AU) has rejected an unsolicited offer from Gold Fields Ltd (GFI SJ),
In a bid to secure control over the Gruyere JV mine in WA, Gold Roads offered A$2.27/share, “plus … Gold Road’s interest in .. De Grey Mining (DEG AU).“
To spice things up Gold Road countered with a proposal to acquire Gold Fields’ interest in Gruyere, which was also rejected by Gold Fields.

Insiders’ Playbook: Who’s Buying and Selling Amid Market Turbulence?

The start of 2025 has been particularly turbulent for Indian equities as broader market sentiment soured due to elevated valuations, foreign institutional investor (FII) outflows, and global macro uncertainty.
However, amid this volatility, one signal stood out: insider trading activity.
In this report, we deep-dive into insider buying and selling trends from January 1 to March 3, 2025, to uncover where company promoters and top executives are placing their bets

Telefónica: Execution and Valuation Update

Telefónica is nearing completion of its Latin American divestment strategy, unlocking capital from low-margin markets and reducing geopolitical risk, with €2.5 billion equity value estimated for remaining Hispam units.
A conservative 4x EV/EBITDA multiple applied to Hispam subsidiaries yields a fair value of €5.06 per share, while a prudent €4.50 target reflects geopolitical and execution risk buffers.
Proceeds from disposals strengthen Telefónica’s balance sheet, support its 7% dividend yield, and enable reinvestment into high-growth segments like Tech and fibercos, enhancing long-term shareholder value and operating efficiency.

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Mar 24

Daily Brief Event-Driven: Sun Corp (6736) – Still Cheap and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Sun Corp (6736) – Still Cheap
A/H Premium Tracker (To 21 Mar 2025): AH Premia Still Falling; Expect Curve Torsion or AH Widening
Weekly Deals Digest (23 Mar) – CK Hutchison, Canvest, ENN Energy, HKBN, Fengxiang, Spartan, DN Sols
Merger Arb Mondays (24 Mar) – HKBN, ESR, Canvest, Vesync, Seven & I, Proto, Makino, Spartan
PC Partners (1263 HK): SGX Primary Listing Justified To Maintain NVIDIA Supply
Market Movers: Key Dates at a Glance (March 24-30)
Weekly Update (ANGI, IAC, SNRE)

Sun Corp (6736) – Still Cheap

Eight months on from the Tender Offer which changed the shape of the shareholder register, Sun Corp (6736 JP) is as cheap to its main asset as it was before.
Sun Corp is cheap to its holding in Cellebrite DI (CLBT US). How cheap depends on the form and structure of its eventual exit.
Understanding what the options are (and the dynamics around hedging/exposure) is worthwhile.

A/H Premium Tracker (To 21 Mar 2025): AH Premia Still Falling; Expect Curve Torsion or AH Widening

AH Premia continue to fall. Spread curve torsion was a barbell this week. Narrow and wide spreads see Hs outperform. Middling spreads outperform less.
To me, warning signs are flashing on spreads. They are at their narrowest in 5yrs and they are volatile, though volatility is coming down.
Lots of spreads see the HA premium less than 15%. That is historically tight.

Weekly Deals Digest (23 Mar) – CK Hutchison, Canvest, ENN Energy, HKBN, Fengxiang, Spartan, DN Sols

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: DN Solutions (298440 KS) seeks to raise US$1.1 billion in a KRX IPO.
Event-Driven developments: CK Hutchison Holdings (1 HK), Canvest Environmental Protection Group (1381 HK), ENN Energy (2688 HK), HKBN Ltd (1310 HK), Shandong Fengxiang (9977 HK), Spartan Resources (SPR AU).

Merger Arb Mondays (24 Mar) – HKBN, ESR, Canvest, Vesync, Seven & I, Proto, Makino, Spartan

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: Seven & I Holdings (3382 JP), OneConnect Financial Technology (OCFT US), Insignia Financial (IFL AU), Smart Share Global (EM US), Soundwill Holdings (878 HK).
Lowest spreads: Makino Milling Machine Co (6135 JP), Shibaura Electronics (6957 JP), Domain Holdings Australia (DHG AU), Tonami Holdings (9070 JP), PointsBet Holdings (PBH AU).

PC Partners (1263 HK): SGX Primary Listing Justified To Maintain NVIDIA Supply

On the 18th June 2024, PC Partner (1263 HK)‘s board said it was considering an SGX listing, by way of introduction, and applying for the withdrawal of the HKEx listing.
A 30th August 2024 announcement provided clarity on a step-by-step approach for the HKEx withdrawal. A secondary listing on the SGX was established on the 15th November.
The next step is to establish a dual-primary listing in Singapore. Then withdraw the HKEx listing. The key driver behind this exercise is ensure the uninterrupted supply of NVIDIAs GPUs.

Market Movers: Key Dates at a Glance (March 24-30)

By Gaudenz Schneider

India: Index changes for Nifty indices will take place. Multiple option expiries are scheduled, impacting stocks and indices such as the NIFTY 50 Index, and the SENSEX Index.
Asia-Pacific: Key events include Hong Kong’s earnings week and Tokyo CPI release, while Australia reports its Monthly CPI indicator.
USA: Significant releases include the final Q4 2024 GDP figures and the PCE Price Index, the Fed’s preferred inflation gauge.

Weekly Update (ANGI, IAC, SNRE)

By Richard Howe

On March 31, 2025, IAC Inc (IAC) will spin off Angi Inc (ANGI). The first day of trading will be April 1st.
Transaction Structure: The spin-off is designed to be tax-free, providing IAC shareholders with direct ownership of Angi. This move will eliminate Angi’s dual-class share structure, transitioning to a one share/one vote system.
Distribution Ratio: IAC shareholders will receive approximately 0.5178 shares of Angi Class A common stock for each IAC share they hold. This ratio accounts for a planned 1-for-10 reverse stock split of Angi’s shares, effective March 24, 2025.

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Mar 23

Daily Brief Event-Driven: LY Corp (4689) Launches Beenos (3328) Tender Offer at ¥4 and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

LY Corp (4689) Launches Beenos (3328) Tender Offer at ¥4,000
HK Connect SOUTHBOUND Flows (To 21 Mar 2025); Lots Of “Day Trading” And Behind the Scenes Div-Buying
Kum Yang: A Potential Delisting? [Murphy’s Law in Progress]
(Mostly) Asia-Pac M&A: Westgold/Spartan, Dropsuite, Shandong Fengxiang, Proto Corp, Shinko Electric
Last Week in Event SPACE: Hankyu Hanshin REIT, ENN Energy, Idemitsu, HKBN, Jardine Matheson

LY Corp (4689) Launches Beenos (3328) Tender Offer at ¥4,000

On Friday 21 March, LY (4689 JP) made an announcement it had received all the required approvals and would launch the Tender Offer on 24 March.
Some were upset about the price originally but unlike other deals, this one traded below terms for three months since original announcement. Three activish funds had pitched in their 30%.
This is now trading tight, and will continue to trade tight. If you own, whether you hold through early May depends on whether you are bullish or bearish the market.

HK Connect SOUTHBOUND Flows (To 21 Mar 2025); Lots Of “Day Trading” And Behind the Scenes Div-Buying

Gross SOUTHBOUND volumes dropped again somewhat but still high at HK$619bn. NET buying by SOUTHBOUND was HK$23bn which is much smaller than the last several weeks.
The flows here are still striking and net to buy. There has to be institutional buying. And I assume it is to get the earnings yield and div pickup.
Included is a summary of important China Stocks-relevant news as I saw it this week.

Kum Yang: A Potential Delisting? [Murphy’s Law in Progress]

Murphy’s law is at progress for Kum Yang (001570 KS).
On 21 March, Kum Yang’s external auditor gave a disclaimer of opinion on the on its audit report.
Korea Exchange is becoming more serious about delisting shady companies, especially one that receives inappropriate audit opinions for two consecutive years.

(Mostly) Asia-Pac M&A: Westgold/Spartan, Dropsuite, Shandong Fengxiang, Proto Corp, Shinko Electric

I tally 52 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma.
Three news new deals discussed this week: the Westgold Resources (WGX AU)/Spartan Resources (SPR AU) merger, and EcoNaviSta (5585 JP)‘s Tender Offer.
Key updates/news took place on: Dropsuite Ltd (DSE AU),Shandong Fengxiang (9977 HK), Proto Corp (4298 JP), and Shinko Electric Industries (6967 JP).

Last Week in Event SPACE: Hankyu Hanshin REIT, ENN Energy, Idemitsu, HKBN, Jardine Matheson

Buy Hankyu Hanshin REIT, Inc. (8977 JP) on any weakness. There will be strength ahead.
With ENN Energy (2688 HK) suspended pursuant to the Takeovers Code, a third party Offer, as opposed to ENN Group, seems more likely.
Be long Idemitsu (5019 JP) vs ENEOS for the next several weeks. Light and easy drift trade based on pressure increasing and pressure ending before new news in May.

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Mar 22

Daily Brief Event-Driven: Hankyu Hanshin REIT (8977) – Good Fundamental News and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Hankyu Hanshin REIT (8977) – Good Fundamental News, a Bigly Buyback, and Cascading Flows to Come
Korea’s FSC Just Dropped the Final Playbook on the Full Restart of Short Selling.
Manappuram Finance: Bain Capital’s Entry Signals a New Chapter, But Challenges Remain
CIE’s Partial Takeover Offer Puts Shareholders in the Fast Lane

Hankyu Hanshin REIT (8977) – Good Fundamental News, a Bigly Buyback, and Cascading Flows to Come

3D Investment Partners launched a Partial Tender Offer to buy a 10+% stake in Hankyu Hanshin REIT, Inc. (8977 JP). The REIT finally responded with a “Neutral” stance.
But they also upgraded earnings forecasts, bought a building, and announced the Sponsor would buy units in the market over the next year. It’s big.
And that creates flows, which then engender other reactive flows, and cascading flows, and because the sector isn’t rich, there may be a tailwind.

Korea’s FSC Just Dropped the Final Playbook on the Full Restart of Short Selling.

By Sanghyun Park

Today’s update clarifies which brokers are fully linked to NSDS, giving them an edge in short-selling speed and flexibility, while others face more execution constraints.
This leads to a clear execution risk gap, requiring traders to factor in trade efficiency differences based on their broker.
With lower short-selling restriction triggers, liquidity and short-covering dynamics will shift, requiring traders to reassess market impact and adjust strategies accordingly.

Manappuram Finance: Bain Capital’s Entry Signals a New Chapter, But Challenges Remain

Bain Capital is acquiring a 41.7–46% stake in Manappuram Finance (MGFL IN), marking a shift from a promoter-led to a professionally managed NBFC.
This deal injects INR 4,385 crore in fresh capital, strengthens governance, and positions Manappuram for growth beyond gold loans into microfinance, vehicle loans, and housing finance.
While execution risks remain, Bain’s track record in financial services suggests a long-term transformation, potentially closing Manappuram’s valuation gap with Muthoot Finance.

CIE’s Partial Takeover Offer Puts Shareholders in the Fast Lane