Event-Driven

Osaka Steel (5449 JP) is 65% owned by Nippon Steel Corporation (5401 JP). They make a relatively simple set of steel products used by shipbuilders, construction companies, and warehouse builders.
Activist Effissimo Capital went over 5% in October 2016 and is still a top holder. Activist Strategic Capital went over 5% in December 2023 and now owns 10+% of votes.
The “hope” had been that Nippon Steel buy out minorities and Osaka Steel would be rescued from mediocre capital returns. That was not to be. Activists are disappointed.

India: Potential Free Float Changes & Passive Flows in February

Companies in India have disclosed their shareholding pattern as of end-December in January. There are companies with significant float changes from end-September and/or end-June.
The changes in free float could be reflected in domestic and global indices over the next few weeks and months resulting in action from passive trackers.
Depending on the date that the shareholding was published, there could be 13 stocks with passive inflows from global trackers while 4 could see passive outflows in February.

FXI ETF: Potential Changes in the Year of the Snake

There could be 1/2 changes to the iShares China Large-Cap (FXI) (FXI US) in March. Then there will be more changes as large Chinese companies list H-shares on the HKEX.
Fast Entries and regular inclusion of newly listed H-shares will change the characteristics of the FXI and there could be further deviations from the Hang Seng China Enterprises Index (HSCEI INDEX).
That will provide opportunities for index rebalance traders as well as volatility traders that are active on the iShares China Large-Cap (FXI) (FXI US) options.

KRX New Deal Index Rebalance Preview: Smaller Deal Than Usual

The review period for the March rebalance ended on 31 January, changes will be announced first week of March and implemented at the close of trading on 13 March.
We forecast two changes for the Bio Index and one change for the Internet Index. Plus there will be capping changes for all indices.
The largest flows will be in Samsung SDI, LG Energy Solution, POSCO Holdings, Alteogen, Naver Corp, Legochem Biosciences, Netmarble and Celltrion Inc.

Merger Arb Mondays (03 Feb) – ESR, LifeStyle China, Vesync, Giga Prize, Sanyo, Ascot, Seven & I

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: Chuoh Pack Industry (3952 JP), Giga Prize (3830 JP), Sanyo Special Steel (5481 JP), Ascot Corp (3264 JP), Lifestyle China (2136 HK), Seven & I Holdings (3382 JP).
Lowest spreads: Makino Milling Machine Co (6135 JP), Avjennings Ltd (AVJ AU), Fuji Soft Inc (9749 JP), Macromill, Inc (3978 JP), Millennium & Copthorne Hotels Nz (MCK NZ).

Chuoh Pack Industry (3952 JP): NIKKON (9072 JP) Offer’s 273% Premium Results from an Auction

Chuoh Pack Industry (3952 JP) has recommended Nikkon Holdings (9072 JP)’s tender offer at JPY5,034, a 273.2% premium to the last close.
The extraordinary premium resulted from a competitive auction, enabling Toyota Motor (7203 JP), the largest shareholder, to sell most of its stake.
The offer is well above the target IFA’s DCF valuation range and more than double the all-time high. Stating the obvious, this is a done deal.

Weekly Deals Digest (02 Feb) – NTT UD REIT, Sanyo, Ascot, Giga Prize, Lifestyle China, Dada, 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, and Guming Holdings (GUM HK) seeks to raise US$300 million.
Event-Driven developments: NTT UD REIT Investment Corporation (8956 JP), Ascot Corp (3264 JP), Giga Prize (3830 JP), Sanyo Special Steel (5481 JP), Lifestyle China (2136 HK), Dada Nexus (DADA US).

Fosun Tourism (1992 HK): No Love For The Scrip Alternative

Back on the 10th December 2024, Fosun Tourism (1992 HK) announced a rare Scheme buyback, with a Cancellation Price of $7.80/share (not declared final), a punchy 95% premium to undisturbed.
A successful Scheme would result in Fosun International (656 HK) and concert parties holding 100% in Fosun Tourism – without having to outlay a cent.
A scrip alternative was afforded IF expressions of interests from 1% of shares out occurred. That didn’t happen. Still a clean deal. Scheme Doc dispatch is the 14th Feb.

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Feb 02

Daily Brief Event-Driven: Sanyo Special Steel (5481 JP): Nippon Steel (5401 JP)’s Light Tender Offer Begs for Activism and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Sanyo Special Steel (5481 JP): Nippon Steel (5401 JP)’s Light Tender Offer Begs for Activism
(Mostly) Asia M&A, Jan 2025: Sun Art, Sanyo Special Steel, Jamco, Ascot, Dropsuite, Smart Share
Giga Prize (3830 JP): FreeBit (3843 JP)’s Tender Offer Is a Done Deal
Last Week in Event SPACE: Fast Retailing, Sigma, Takeda Pharmaceutical, WH Group
Quiddity Leaderboard ASX Mar 25: LONGs up ~10% Vs SHORTs in a Month; More to Come
(Mostly) Asia-Pac M&A: Sigma Healthcare Dropsuite, Japfa, Dada Nexus, Malaysia Airports, Sanyo Steel

Sanyo Special Steel (5481 JP): Nippon Steel (5401 JP)’s Light Tender Offer Begs for Activism

Sanyo Special Steel (5481 JP) has recommended Nippon Steel Corporation (5401 JP)’s tender offer at JPY2,750, a 37.4% premium to the last close.
The offer is light, implying a P/B of 0.67x, below the midpoint of the IFA DCF range, below the Board’s requested price, and unattractive compared to peer multiples.
The lack of an irrevocable and unattractive offer suggests that satisfying the minimum acceptance condition is likely challenging. This situation requires activism to force a bump.

(Mostly) Asia M&A, Jan 2025: Sun Art, Sanyo Special Steel, Jamco, Ascot, Dropsuite, Smart Share

For the month of January 2025, 14 new transactions (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$6bn.
The average premium for the new transactions announced (or first discussed) in January was ~57%, excluding Sun Art Retail (6808 HK)‘s massive takeunder.
The average premiums for transactions in 2024 (129 transactions), (2023 (117), 2022 (106), 2021 (165), 2020 (158), and 2019 (145 ) were 43%, 39%, 41%, 33%, 31%, and 31% .

Giga Prize (3830 JP): FreeBit (3843 JP)’s Tender Offer Is a Done Deal

Giga Prize (3830 JP) has recommended Freebit Co Ltd (3843 JP)’s tender offer at JPY2,500, a 48.5% premium to the last close.
While the offer is below the midpoint of the target IFA’s DCF valuation range, it represents an all-time high and aligns with the Board’s requested price.
The required minority acceptance rate is modest, and tendering by the third-largest shareholder is enough to close the deal.

Last Week in Event SPACE: Fast Retailing, Sigma, Takeda Pharmaceutical, WH Group

It was confirmed on Friday afternoon Fast Retailing (9983 JP) was a single cap move, NOT a double-capping in a single Review. That limits the sell down.
Chemist Warehouse’s reverse buyout of pharmacy wholesaler Sigma Healthcare (SIG AU) is now all-but complete.
Takeda Pharmaceutical (4502 JP) announced decent results, decently upgraded guidance in both IFRS/GAAP terms and in Core/Adjusted terms (less impressive uplift in Adjusted/Analysed terms). They also announced a ¥100bn buyback.

Quiddity Leaderboard ASX Mar 25: LONGs up ~10% Vs SHORTs in a Month; More to Come

By Janaghan Jeyakumar, CFA

In this insight, we take a look at the potential index changes for ASX 300, 200, 100, 50, and 20 in the run-up to the March 2025 index rebal event.
We expect two changes for ASX 50, one change for ASX 100, and seven changes for ASX 200. Separately we see 8 ADDs and 6 DELs for ASX 300.
The Sigma Healthcare – Chemist Warehouse merger will be completed soon and there will be major inflows for Sigma Healthcare due to float percentage/share count upgrades.

(Mostly) Asia-Pac M&A: Sigma Healthcare Dropsuite, Japfa, Dada Nexus, Malaysia Airports, Sanyo Steel

I tally 58 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma.
Ten new deals discussed this week! Australia’s Dropsuite, Red Hawk,; Singapore’s Japfa, SLB; Japan’s Global Food, Ascot Corp, Chuoh Pack Industry, Giga Prize, Sanyo Special Steel; and Dada Nexus.
Key updates/news took place on: Sigma Healthcare (SIG AU), Shandong Hi-Speed New Energy (1250 HK), China National Building Material (3323 HK), Malaysia Airports (MAHB MK), and Sun Art (6808 HK).

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Feb 01

Daily Brief Event-Driven: Nippon Steal! Again. Parent Takes Out Sanyo Special Steel (5481) At Well Below Book and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Nippon Steal! Again. Parent Takes Out Sanyo Special Steel (5481) At Well Below Book
Daito Trust Buys Out Listed Private Co Ascot (3264 JP) – Small Done Deal at ¥260
Ascot Corp (3264 JP): Daito Trust Construction (1878 JP)’s Tender Offer a Done Deal
Sabadell’s Dividend Strategy and the BBVA Takeover Bid
EQD | NSE Nifty Bank Index – Implied Volatility Not (Yet) Rich Enough.
Nikkon Pays 273% Premium for Chuoh Pack (3952 JP) In Takeover
EQD | S&P/ASX 200 Option Strategy – Today’s All-Time-High Calls for Proactive Hedging
EQD | Global Option Implied Volatility – Option Opportunities Across the Regions
Freebit (3843) Buys Out Minorities in Giga Prize (3830) – Light, But Tough to Block

Nippon Steal! Again. Parent Takes Out Sanyo Special Steel (5481) At Well Below Book

6-7 years ago Sanyo Special Steel (5481 JP) bought out a large foreign specialty steel company, and funded it by getting Nippon Steel to inject capital at below book.
Now Nippon Steel is buying the rest of Sanyo Special Steel in a Tender Offer at 0.66x book, where most of book is Net Receivables, Inventory, WIP, and Materials.
This is the second time in a decade where the Board has decided to sell control of itself at far below book value. They should be ashamed of themselves.

Daito Trust Buys Out Listed Private Co Ascot (3264 JP) – Small Done Deal at ¥260

Ping An Insurance bought into a small Tokyo-based condo developer in 2017 at ¥255/share. In 2020, it reinvested on the dip with SBI at ¥155/share.
Ping An and SBI started with zero shares. By 2020 they had 80+% of shares. Now they are selling out to Daito Trust Construct (1878 JP).
This is a done deal at a slight premium to book value. Daito Trust buys Real Estate Available for Sale and assumes debt. That’s it. Easy peasy done deal.

Ascot Corp (3264 JP): Daito Trust Construction (1878 JP)’s Tender Offer a Done Deal

Ascot Corp (3264 JP) announced a tender offer from Daito Trust Construct (1878 JP) at JPY260 per share, a 20.4% premium to the last close.
Ascot currently does not meet the 25% tradeable share ratio criterion. The offer is attractive compared to historical trading ranges but below the mid-point of the IFA DCF valuation range.
This is a done deal, as irrevocables represent an 82.78% ownership ratio, well above the minimum acceptance condition (67.86% ownership ratio).

Sabadell’s Dividend Strategy and the BBVA Takeover Bid

By Jesus Rodriguez Aguilar

Sabadell plans a €500 million share buyback to maintain stock value, reducing the attractiveness of BBVA’s exchange offer and increasing shareholder resistance to the takeover.
Regulatory scrutiny intensifies as BBVA-Sabadell would control 39.63% of Catalonian banking credit, raising competition concerns, particularly in SME lending and payment services.
The market expects BBVA to raise its offer by 10-20%, but BBVA’s CEO insists there is “no room” for improvement, making shareholder approval uncertain.

EQD | NSE Nifty Bank Index – Implied Volatility Not (Yet) Rich Enough.

NSE Nifty Bank Index implied volatility could be seen as rich when compared to its own history and in comparison to realized volatility.
Putting implied volatility into context with the NSE Nifty Bank Index 200 day moving average will lead to a different conclusion. Selling volatility might not be the opportunity it seems.
This Insight provides a quantitative indication at which level implied volatility can be assessed as rich.

Nikkon Pays 273% Premium for Chuoh Pack (3952 JP) In Takeover

Today, Nikkon Holdings (9072 JP) announced it would take over Chuoh Pack Industry (3952 JP) for ¥5,034/share. It closed today at ¥1,349. This is a HUGE win for governance.
The 273% premium is not the big win here. For holders it is, of course, but for Japan Inc shareholders everywhere, the win was the auction process.
This could have come out at 100% premium and that might have been OK. As it is, cross-holders and one big holder together get this deal done. Congrats!

EQD | S&P/ASX 200 Option Strategy – Today’s All-Time-High Calls for Proactive Hedging

Today, the S&P/ASX 200 (AS51 INDEX) reached a new all-time high while implied volatility is near record low levels. The combination makes for a good opportunity to hedge.
Volatility assessment trough conventional volatility metrics and one new chart not seen anywhere else.
An actionable example of a put option hedge is presented, striking a balance between protection and cost.

EQD | Global Option Implied Volatility – Option Opportunities Across the Regions

Global option markets present a diverse picture, offering a broad opportunity set.
Several markets make for good hedging-candidates after a strong January and amid cheap options.
Although several Indian indices show high implied volatility, contextual analysis indicates volatility may be fairly priced relative to their bear trends.

Freebit (3843) Buys Out Minorities in Giga Prize (3830) – Light, But Tough to Block

Today, Freebit Co Ltd (3843 JP) announced it would launch a Tender Offer next Monday to buy out minorities in 60.9%-owned Giga Prize (3830 JP).
The multiple is not terribly impressive. It could be better. But they only need 5.8% of the 39.1% they do not own to get this over the hump.
Synergies are clear. They are expected. They are not priced in the valuation. This is disappointing. Again.

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Jan 31

Daily Brief Event-Driven: Global Foods Creators (7559) – Another Stupidly Cheap MBO With Rigged DCF and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Global Foods Creators (7559) – Another Stupidly Cheap MBO With Rigged DCF
Takeda Pharma (4502) – Strong Results
SOL Shipbuilding Top 3 ETF Throws off Some Serious Flow Trading Plays with Plenty of Juice
Quiddity JPX-Nikkei 400 Rebal 2025: End-Jan 2025 Ranks
Dropsuite (DSE AU): NinjaOne’s A$5.90/Share Scheme
Whirlpool Corporation’s Big Exit: What’s Behind the Stake Reduction?
BMPS’s Hostile Takeover Bid for Mediobanca: Strategic and Financial Implications
EQD | Nifty 50 Option Strategy – Implied Volatility Is Not as Rich as It Seems
Abrdn European Logistics Income Trust Liquidation: 23% Upside Potential Amid Asset Sales

Global Foods Creators (7559) – Another Stupidly Cheap MBO With Rigged DCF

Today after the close, Global Food Creators (7559 JP) announced that the CEO would sell his 1.23% of the company into an MBO by a company he set up.
The family company which owns 27%, and he would fund the takeover of the other 73% with 1% equity taken from his share sale, and 99% bank loans.
The TOB is at 0.65x book for a cash-rich company. Liquidate the cash and the rest is being taken over at 0.33x book. Aaaaargh.

Takeda Pharma (4502) – Strong Results

Today Takeda Pharmaceutical (4502 JP) announced earnings which will mean last year was the trough, not this year. The pipeline looks OK too.
The company also announced a ¥100bn buyback and a change of CEO. The buyback has a big number, but it isn’t particularly exciting.
All in all, there’s positive news here, but it is all much of a muchness, but as it is a nine-figure buyback in 3mos, we take a look.

SOL Shipbuilding Top 3 ETF Throws off Some Serious Flow Trading Plays with Plenty of Juice

This 20% reversion and 30% cap setup creates solid flow trades. With just 13 holdings, SOL ETF’s weight swings hard—Hanwha Ocean’s already pushing 27% post-rebal.
Constituent changes drive the biggest dislocations—still the main setup. “The other 10” names are FICS-screened by market cap (May/Nov cut), making rotations fairly predictable.
With AUM only ramping recently, this ETF is still in price discovery mode. Pre-positioning ahead of flows has juice, making it a prime target for aggressive flow trading.

Quiddity JPX-Nikkei 400 Rebal 2025: End-Jan 2025 Ranks

By Janaghan Jeyakumar, CFA

JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted capped index composed of 400 constituents.
The annual index review takes place in August every year. We look at the latest rankings of potential ADDs/DELs every month.
Below is a look at the rankings of potential ADDs/DELs for the JPX-Nikkei 400 August 2025 rebalance based on trading data as of end-January 2025.

Dropsuite (DSE AU): NinjaOne’s A$5.90/Share Scheme

Dropsuite (DSE AU), a backup, recovery and protection software company, has entered into a Scheme Implementation Deed with Texas-based IT automation outfit NinjaOne.
NinjaOne is offering A$5.90/share, a 34.1% premium to last close. Apart from Dropsuite’s shareholder approval, the Offer requires FIRB signing off. The Offer has the unanimous backing of both boards.
The Offer also has the backing of Dropsuite’s largest shareholder, Topline Capital (31%). Board & management hold a further 9%. Implementation is expected late May 2025. This is done.

Whirlpool Corporation’s Big Exit: What’s Behind the Stake Reduction?

By Nimish Maheshwari

Whirlpool Corp (WHR US) plans to sell a 31% stake in Whirlpool of India (WHIRL IN) reducing ownership to 20% by 2025, triggering a 20% decline due to valuation concerns.
The implied sale valuation is lower than market expectations, raising concerns about growth, profitability, and stock overvaluation, while the parent company capitalizes on an asset arbitrage opportunity.
Short-Term stock pressure due to stake sale overhang, declining profitability, and reduced parent control, but potential long-term re-rating if operational performance improves.

BMPS’s Hostile Takeover Bid for Mediobanca: Strategic and Financial Implications

By Jesus Rodriguez Aguilar

Hostile Takeover Attempt: BMPS launched a €13.3B all-share bid for Mediobanca, offering a 5% premium, but Mediobanca rejected it, citing governance conflicts and strategic misalignment.
Shareholder and Dilution Risks: BMPS shareholders face 39.3% dilution, while Delfin and Caltagirone’s post-merger 24% stake raises governance concerns, potentially sidelining smaller investors.
The deal faces integration risks, and Mediobanca’s shareholder resistance, with BMPS’s falling stock price erasing the initial premium, making success increasingly uncertain.

EQD | Nifty 50 Option Strategy – Implied Volatility Is Not as Rich as It Seems

NIFTY Index implied volatility could be seen as rich when compared to its own history and in comparison to realized volatility.
Putting implied volatility into context with NIFTY Index market levels and trends will lead to a different conclusion. Implied volatility is not nearly as rich as conventional measures suggest.
This Insight provides a quantitative indication at which price implied volatility can be assessed as rich, given current relative index levels.

Abrdn European Logistics Income Trust Liquidation: 23% Upside Potential Amid Asset Sales

By Dalius Tauraitis

ASLI is undergoing a managed wind-down with a 23% upside to NAV estimates, selling properties above NAV.
Recent sales include three assets for €45m, with further large assets in due diligence, supporting NAV estimates.
Risks include potential higher disposal costs and management incentives, but a margin of safety exists with current pricing.

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Jan 30

Daily Brief Event-Driven: Event Driven: Vedanta Ltd: A Story of Wealth Creation Through Demerger and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Event Driven: Vedanta Ltd: A Story of Wealth Creation Through Demerger
Play the Timing Sweet Spot Between KOSPI 200 Rebal and Short Selling Coming Back into Play
Sigma Healthcare (SIG AU): Shareholders Approve Merger; Passives Could Start Buying in Two Weeks
Dropsuite (DSE AU): NinjaOne’s Binding Offer a Done Deal

Event Driven: Vedanta Ltd: A Story of Wealth Creation Through Demerger

By Nimish Maheshwari

Vedanta Ltd (VEDL IN) plans a multi-segment demerger to unlock value by separating its aluminum, zinc, oil and gas, steel, and other core operations into standalone entities.
This restructuring aims to eliminate conglomerate discount, foster specialized leadership, and attract fresh capital, potentially enhancing overall valuations and fueling long-term growth across diversified segments.
Despite governance concerns and cyclical commodity risks, pure-play listings could catalyze re-ratings, offering heightened returns but requiring vigilance on execution and corporate transparency.

Play the Timing Sweet Spot Between KOSPI 200 Rebal and Short Selling Coming Back into Play

Short selling returns March 31, after 85% of the KOSPI 200’s rebalancing. Stocks set for removal will be prime short targets.
Stocks removed have solid liquidity, tight passive impact gaps between them, and with short selling restarting March 31, we could see intensified volume in the short basket.
With rebalance ahead, price action may start early. Market exposure means aggressive moves could happen before the end of March, so consider building futures positions before short selling resumes.

Sigma Healthcare (SIG AU): Shareholders Approve Merger; Passives Could Start Buying in Two Weeks

Sigma Healthcare (SIG AU) and Chemist Warehouse (CWG) shareholders have approved the merger with 99.86% and 100% of the votes cast in favour.
The Second Court Hearing is on 3 February and the merger will be implemented on 12 February, which is when the passive buying could commence.
Sigma Healthcare has continued to trade higher on a record margin and sales expansion for CWG and expected passive buying that could top A$3bn over the next few months.

Dropsuite (DSE AU): NinjaOne’s Binding Offer a Done Deal

On 28 January, Dropsuite Ltd (DSE AU) entered a scheme implementation deed with NinjaOne at A$5.90 per share, a 34.1% premium to the undisturbed price of A$4.40 per share.
The offer is conditional on shareholder and FIRB approval. The vote is low-risk as the largest shareholder has provided an irrevocable.
The offer is attractive and represents an all-time high. At the last close, for a 20 May payment, the gross/annualised spread was 3.0%/10.3%.

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Jan 29

Daily Brief Event-Driven: 3D Launches Partial Tender Offer on NTT UD REIT (8956) and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

3D Launches Partial Tender Offer on NTT UD REIT (8956)
NTT UD REIT (8956 JP): 3D’s Unsolicited Partial Tender Offer
Solactive Global Uranium & Nuclear Components Index Rebalance: DeepSeek Led Selloff & 1 Delete
Fast Retailing (9983 JP): Double Capping & The Reverse Funding Trade
Japfa (JAP SP): The Santosa Family (Finally) Makes A Move
SLB Dev (SLB SP): Ong Family Offer By Way Of A Scheme.
Shandong Hi-Speed New Energy (1250 HK)’s Unconditional MGO Now Open
Venture Global (VG US): Excluded from Global & US Indices Despite $50B Market Cap
Red Hawk (RHK AU): Fortescue’s Off-Market Offer
Dada Nexus (DADA US): JD.Com’s US$2/ADS Non-Binding Offer

3D Launches Partial Tender Offer on NTT UD REIT (8956)

Seemingly out of the blue, Singapore-based activist investment fund 3D Investment Partners has launched a partial tender offer at a small premium on NTT UD REIT Investment Corporation (8956 JP).
3DIP currently owns 2.2% and at maximum, will own 15.00% of the REIT units outstanding less treasury units. It intends to own the units for “pure investment purposes.”
“Shareholder” structure is different for J-REITs vs companies. And this J-REIT has an interesting future possibility. But…

NTT UD REIT (8956 JP): 3D’s Unsolicited Partial Tender Offer

3D has announced an unsolicited partial tender offer for NTT UD REIT Investment Corporation (8956 JP) at JPY131,890 per unit, a 10.0% premium to the undisturbed price.
The minimum number of units to be purchased is 115,279 (7.80% ownership ratio), and the maximum number of units to be purchased is 189,128 (12.80% ownership ratio).
The modest premium and an implied P/NAV <1x suggest a lightish offer. 3D will have to rethink terms as shares are trading through terms.

Solactive Global Uranium & Nuclear Components Index Rebalance: DeepSeek Led Selloff & 1 Delete

Solactive has announced the constituent changes for the Global Uranium & Nuclear Components Index. There is only 1 delete with implementation at the close on 31 January.
As expected, GoviEx Uranium (GXU CN) will be deleted from the index and there will be a bunch of capping changes, especially for non-pure play stocks.
Estimated one-way turnover is 5.8% resulting in a round-trip trade of US$386m. There are many stocks with multiple days of ADV to trade.

Fast Retailing (9983 JP): Double Capping & The Reverse Funding Trade

With 3 days left in the review period, Fast Retailing (9983 JP) has a 11.29% weight in the Nikkei 225 (NKY INDEX). That means double capping in March.
If Fast Retailing (9983 JP) underperforms the other index stocks by 1.8% from now to the close on 31 January, there will only be a single level of capping.
Double capping will result in big selling on Fast Retailing (9983 JP) and big inflows into the other index constituents. Smaller impact for single level capping.

Japfa (JAP SP): The Santosa Family (Finally) Makes A Move

Back in March of last year, Bloomberg reported,that Renaldo Santosa and his family, who collectively controlled ~75.5% of agri-play Japfa Ltd (JAP SP), were considering taking Japfa private.
This was discussed in Japfa (JAP SP): Impressive Gain. But No Firm Offer. Then crickets.
The family has now pitched an Offer of S$0.62/share, by way of a Scheme, a 34.8% premium to undisturbed. That’s probably enough to get this over the line.

SLB Dev (SLB SP): Ong Family Offer By Way Of A Scheme.

Singaporean property play SLB Development (SLB SP) has announced an Offer, by way of a Scheme, from Lian Beng (LBG SP)‘s Ong family, at S$0.23/share, a 36.1% premium to undisturbed.
Lian Beng, which was privatised by the Ong family in 2023 – see Lian Beng: Circ Out. IFA (Rightfully) Says Not Fair – holds 77.6% in SLB.
This is done. No competing offer will emerge. I don’t think this needs a bump.

Shandong Hi-Speed New Energy (1250 HK)’s Unconditional MGO Now Open

Back on the 27 December, Shandong Hi-Speed Holdings (412 HK) completed two SPAs, elevating its stake in Shandong Hi-Speed New Energy (1250 HK) to 56.97% from 43.45%, triggering an unconditional MGO.
The Composite Doc is now out, and the Offer is open for tendering. The close of the Offer is the 18th Feb, 21 days out. Don’t expect an extension.
The IFA has declared the terms fair & reasonable. Which is probably true.

Venture Global (VG US): Excluded from Global & US Indices Despite $50B Market Cap

By Dimitris Ioannidis

Venture Global (VG US) is forecasted to fail fast-entry to S&P TMI due to insufficient fcap but is expected to be added at the March 2025 review.
Venture Global (VG US) is expected to be excluded from Global & US indices due to low fcap and public voting rights mainly caused by the company’s unlisted shares.
The probability of inclusion in Global & US indices increases exponentially with the selling of Class B shares by Venture Global Partners.

Red Hawk (RHK AU): Fortescue’s Off-Market Offer

Via an off-market offer, Fortescue Metals (FMG AU)is aiming to purchase all shares of iron-ore play Red Hawk Mining (RHK AU) at A$1.05/share, a 28% premium to last close.
If Fortescue secures at least 75% of Red Hawk’s shares within seven days, the Offer Price increases to A$1.20/share, a 46% premium to last close
Fortescue’s focus is on Red Hawk’s Blacksmith iron ore project, located ~30 kilometers west of Fortescue’s own Solomon project.

Dada Nexus (DADA US): JD.Com’s US$2/ADS Non-Binding Offer

On the 27th January, Dada Nexus (DADA US), a Chinese on-demand retail and delivery platform, announced a preliminary non-binding proposal from JD.com (9618 HK).
JD.com, a 63.2% shareholder, is offering US$0.50/share (US$2.00/ADS), a 42% premium to last close. Should a definitive agreement be inked, this is done.
DADA has formed a committee to evaluate the proposal. The risk to the trade, as with many US-listed China plays, is one of timing. Trading at a 11.1% gross spread.

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Jan 28

Daily Brief Event-Driven: Fast Retailing (9983) Capping Decision This Week – Single or Double Dose? and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Fast Retailing (9983) Capping Decision This Week – Single or Double Dose?
TOPIX Index Upweights: An Early Preview Of “The Big April Basket” 2025
EQD | DeepSeek’s New AI: Price Supports and Broader Implications for META, NVDA, S&P 500, Nasdaq 100
Utilize the Killer Dataset Provided by KRX Through the Value-Up Index
EQD | Hong Kong Single Stock Options Weekly (January 20 – 24): Rally Continues on Less Participation
Lifestyle China (2136 HK): Expectations of a Deal Break with a Vote on 20 February
Dada Nexus (DADA US): JD.com’s Light Non-Binding Offer at US$2 Per ADS
EQD| Lunar New Year: Do HSI, KOSPI, and FXI Follow a Pattern?
EQD | Nikkei Index Options Weekly (January 20 – 24): Looking for an Assist
Weekly Update (APTV, MRP, MEDXF)

Fast Retailing (9983) Capping Decision This Week – Single or Double Dose?

Unless Fast Retailing (9983) underperforms Nikkei 225 by 10% by Friday close, there will be a capping exercise at the next Nikkei 225 Rebalance at the end of March 2025.
The evolution of tech stock movement in Japan in the next day or three is important to watch. There will be effects.
The setup very near-term could be pretty interesting, and worth watching.

TOPIX Index Upweights: An Early Preview Of “The Big April Basket” 2025

By Janaghan Jeyakumar, CFA

The Tokyo Stock Exchange (TSE) calculates Free-Float Weight (FFW) for each listed company and uses this value as a key component of TOPIX Index Calculation.
For companies with “low liquidity” the FFW will be multiplied by a fixed liquidity factor of 0.75 to derive the final FFW used for index calculation.
Every April, the application of this liquidity factor is reviewed by the TSE. In this insight, we take an early look at what could happen in April 2025.

EQD | DeepSeek’s New AI: Price Supports and Broader Implications for META, NVDA, S&P 500, Nasdaq 100

By Nico Rosti

News that DeepSeek’s latest AI release appears to be superior to latest OpenAI’s ChatGPT in most (if not all) of the benchmark tasks have apparently shaken markets today.
DeepSeek may be able to beat its competitors (including other AI developed by other US companies like Meta Platforms (META US) ), using lower cost chips and less data.
Tech companies like NVIDIA Corp (NVDA US) are falling hard (like -12%) in pre-market, and so are the US Indices. Let’s see where support for reversal rallies can be found.

Utilize the Killer Dataset Provided by KRX Through the Value-Up Index

The KRX is going all-in, using data transparency to clean up the Value-Up Index, rebuild trust, and keep it in the spotlight.
This sharpens predictability for June’s rebalancing, enhances market transparency, and attracts foreign investors to GICS-based indices like the KOSPI 200.
This could transform index dynamics, boosting inflows, liquidity, and global interest, creating a potential alpha opportunity.

EQD | Hong Kong Single Stock Options Weekly (January 20 – 24): Rally Continues on Less Participation

By John Ley

Information technology very strong with AAC Tech, Sunny Optical, Kingdee Int’l and Byd Elec all posting > 10% weekly gains.
Gains were positive with helpful seasonals but not as widespread as last week with fewer singles stocks and Sectors participating in the rally.
China Vanke has big increase in option trading, in particular Calls, with implied vols also rising.

Lifestyle China (2136 HK): Expectations of a Deal Break with a Vote on 20 February

Lifestyle China (2136 HK)’s IFA opines that Mr Thomas Lau’s HK$0.98 privatisation offer is fair and reasonable. The vote is on 20 February.
The IFA analysis is flawed. The revised and final offer is light compared to precedent transactions, peer multiples and historical trading ranges.
The high AGM minority participation rates remain a vote risk, mainly as retail seems firmly against the offer. The 14.0% gross spread is high but justified.

Dada Nexus (DADA US): JD.com’s Light Non-Binding Offer at US$2 Per ADS

Dada Nexus (DADA US) disclosed a non-binding proposal from JD.com Inc (ADR) (JD US) at US$2.00 per ADS, a 41.8% premium to the undisturbed price of US$1.41 (24 January).
The offer is light compared to the IPO price (US$16.00), average sell-side price targets (US$2.19) and historical trading ranges.
The shareholder vote is low-risk (two-thirds voting threshold), as JD.com represents 63.2% of the voting power. The key risk is the timing of a binding proposal.

EQD| Lunar New Year: Do HSI, KOSPI, and FXI Follow a Pattern?

By John Ley

All three markets exhibited larger average returns in the 5 days leading up to Lunar New Years compared to out-of-sample data.
The pattern for the period after Lunar New Year does not show the same characteristics as prior to Lunar New Year.
The strongest returns were seen in FXI with average returns 10X out-of-sample average returns.

EQD | Nikkei Index Options Weekly (January 20 – 24): Looking for an Assist

By John Ley

Nikkei back at the top of the price range rising 3.85%. Gains may be more limited from here without an assist from the currency.
Implied vols softened on the week from a combination of factors includes low realized volatility on the week.
Active trade in Put and Call strikes at the edge of the recent trading range.

Weekly Update (APTV, MRP, MEDXF)

By Richard Howe

Aptiv PLC (APTV), an automotive technology supplier, announced on January 22, 2025, that it plans to split into two distinct companies.
Aptiv will spin-off its electrical systems business.
The RemainCo will concentrate on technological components, including sensor-to-cloud solutions and autonomous driving software.

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Jan 27

Daily Brief Event-Driven: Guotai Junan/Haitong Sec Merger: The Many Index Flows Around the Corner and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Guotai Junan/Haitong Sec Merger: The Many Index Flows Around the Corner
Weekly Deals Digest (26 Jan) – Seven & I, Shinko, Canvest, GAPack, Get Nice, Japfa, LG CNS, Guming
China National Building Material (3323 HK): H Share Buyback Vote on 19 February
Merger Arb Mondays (27 Jan) – Fosun Tourism, Get Nice, Lifestyle China, Canvest, Japfa, SLB
PCOMP Index Rebalance: AREIT, CBC to Replace NIKL, WLCON
SLB Development (SLB SP): Ong Family’s S$0.23 Scheme Offer
CNBM (3323 HK): This Is An “Avoid” Ahead Of 19th Feb H-Class Shareholder Vote
Indian Renewable Energy (IREDA IN) QIP: Index Implications
It’s AAPL A BUY? Oversold Models Indicate So, Ahead of Quarterly Earnings
Q&A with CompoSecure About Imminent Spin-Off

Guotai Junan/Haitong Sec Merger: The Many Index Flows Around the Corner

Haitong Securities (H) (6837 HK) and Haitong Securities (A) (600837 CH) shares will stop trading after 5 February following the merger with Guotai Junan Securities (2611 HK).
There will be small buying in Guotai Junan Securities (2611 HK) at the close on 5 February and there should be more buying in the A-shares and H-shares in March.
There will also be a stock added to the Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX) to bring the number of index constituents back to 300.

Weekly Deals Digest (26 Jan) – Seven & I, Shinko, Canvest, GAPack, Get Nice, Japfa, LG CNS, Guming

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, and Guming Holdings (GUM HK) seeks to raise US$300 million.
Event-Driven developments: Seven & I Holdings (3382 JP), Shinko Electric Industries (6967 JP), Fuji Soft Inc (9749 JP), Japfa Ltd (JAP SP), Get Nice Financial Group Ltd (1469 HK).

China National Building Material (3323 HK): H Share Buyback Vote on 19 February

The IFA opines that the China National Building Material (3323 HK) share buyback, which will acquire a maximum of 841.7 million H Shares at HK$4.03, is fair and reasonable.
The share buyback seems designed to enable the CNBM parent company to bypass the creeper rule and squeeze the shorts.
The fortuitous material derating of peers has helped make the buyback attractive. Therefore, the votes should pass, and the minimum acceptance condition should be met.

Merger Arb Mondays (27 Jan) – Fosun Tourism, Get Nice, Lifestyle China, Canvest, Japfa, SLB

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: SLB Development (SLB SP), Japfa Ltd (JAP SP), Seven & I Holdings (3382 JP), Lifestyle China (2136 HK), Get Nice Financial Group Ltd (1469 HK).
Lowest spreads: Makino Milling Machine Co (6135 JP), Avjennings Ltd (AVJ AU), Fuji Soft Inc (9749 JP), Auswide Bank (ABA AU), Pressance Corp (3254 JP).

PCOMP Index Rebalance: AREIT, CBC to Replace NIKL, WLCON

As forecast, Areit (AyalaLand REIT) (AREIT PM) and China Banking (CBC PM) will replace Nickel Asia (NIKL PM) and Wilcon Depot (WLCON PM) in the Philippines Stock Exchange PSEi Index.
Passive trackers will need to buy between 14-44 days of ADV in the adds while selling between 17-54 days of ADV in the deletes.
The stocks have already moved a lot over the last few months and positioning has built up over that period. There could still be outperformance ahead of the passives trading.

SLB Development (SLB SP): Ong Family’s S$0.23 Scheme Offer

SLB Development (SLB SP) disclosed a scheme privatisation from Lian Beng (LBG SP) at S$0.23 per share, a 36.1% premium to the undisturbed price of S$0.169 (22 January).
The Ong family previously privatised Lian Beng, the parent company. The offer price, which is equal to the IPO price, is attractive compared to peer multiples and historical trading ranges.
The scheme vote is low-risk, as no disinterested shareholder holds a blocking stake, and the offer is attractive. Expect a scheme meeting in April.

CNBM (3323 HK): This Is An “Avoid” Ahead Of 19th Feb H-Class Shareholder Vote

On the 6th December, China National Building Material (3323 HK) (CNBM), a leading PRC building materials company, offered to buy back 841,749,304 H-shares at HK$4.03/share, a 15.1% premium to undisturbed.
The thrust of the buyback lifts the stake of CNBM’s parent – the CNBM Parent Concert Group – to 50.01% of total shares from 45.02% currently, necessitating a whitewash waiver.
Pre-Cons were satisfied on the 24th Jan. The independent H-class shareholders vote for the waiver is on the 19th Feb. Minimum pro-ration is 19.24%. Implied back-end price is well down.

Indian Renewable Energy (IREDA IN) QIP: Index Implications

IREDA has announced a Qualified Institutional Placement (QIP) of a maximum of INR 50bn as long as the Government of India’s holding does not drop by more than 7%.
There will be passive buying at the time of settlement of the QIP shares while the increase in float will bring the stock closer to inclusion in another global index.
With the stock close to index inclusion level and down 37% from its peak, there could be positioning in the stock for passive inflows.

It’s AAPL A BUY? Oversold Models Indicate So, Ahead of Quarterly Earnings

By Nico Rosti

Apple (AAPL US) has been downtrending for the past 4 weeks, reaching deeply oversold levels on both our TIME and PRICE quantitative models. Our models are flashing a BUY signal.
On January 30th Apple (AAPL US) will release its quarterly earnings: despite the stock’s current underperformance, most analysts remain optimistic about Apple’s future.
Recently, US President’s Trump announced that Apple was planning a “massive investment” in the U.S. This was part of Trump’s initiative to accelerate major corporate investments in the country.

Q&A with CompoSecure About Imminent Spin-Off

By Richard Howe

I had a chance to speak to CompoSecure investor relations last week about its imminent spin-off (full notes below) of Resolute Holdings.
The biggest takeaways are: 1) Resolute Holdings’ only M&A consulting client will be CompoSecure (I had initially thought it could/would focus on other clients).
2) The ultimate goal for Resolute is to be a high margin alternative asset manager. 3) Resolute is a taxable spin-off and so CMPO will not be “hyping” the spin-off given CMPO will have to pay taxes based on Resolute’s initiation valuation.

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Jan 26

Daily Brief Event-Driven: HK Connect SOUTHBOUND Flows (To 24 Jan 2025); Again Big Net Buying by SB and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

HK Connect SOUTHBOUND Flows (To 24 Jan 2025); Again Big Net Buying by SB, Again on Tech
A/H Premium Tracker (To 24 Jan 2025): AH Premia Fall Yet Again, Lowest Avg Premium in 5yrs… Again
Japfa (JAP SP): Santosa Family’s S$0.62 Scheme Offer
Last Week in Event SPACE: Shinko Elec, Tsuruha/Welcia, Macromill, Sun Corp/Cellebrite, MicroStrategy
(Mostly) Asia-Pac M&A:Millennium & Copthorne, Insignia, AVJennings, Henlius, Canvest, Makino Milling

HK Connect SOUTHBOUND Flows (To 24 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.

A/H Premium Tracker (To 24 Jan 2025): AH Premia Fall Yet Again, Lowest Avg Premium in 5yrs… Again

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.
INFO TECH and FINANCIALS saw significant H outperformance vs As this week. Most others (other than perhaps MATERIALS) were limited in their volatility. No bias by premium tranche seen.

Japfa (JAP SP): Santosa Family’s S$0.62 Scheme Offer

Japfa Ltd (JAP SP) disclosed privatisation through a scheme of arrangement from the Santosa family at S$0.62 per share, a 34.8% premium, to the undisturbed price of S$0.460.
While the offer is attractive compared to historical share price ranges, it is light compared to peer and historical multiples.
The offer has not been declared final. However, the irrevocable, the lack of a disinterested shareholder holding a blocking stake and moderate retail ownership minimises the vote risk.

Last Week in Event SPACE: Shinko Elec, Tsuruha/Welcia, Macromill, Sun Corp/Cellebrite, MicroStrategy

JIC announced a “mid-February” start date for Shinko Electric (6967 JP)‘s Tender Offer. That’s a trifle disappointing based on when SAMR approved, but there are lots of people involved here.
What has been the long-term trend and the trend of the last two years is different. Be long Tsuruha (3391 JP), short Welcia (3141 JP) until above 4.5x, maybe 4.8x.
Macromill, Inc (3978 JP)‘s reward/risk ratio over the next year of buying at ¥1,250 and seeing what happens is quite good, especially if the deal breaks.

(Mostly) Asia-Pac M&A:Millennium & Copthorne, Insignia, AVJennings, Henlius, Canvest, Makino Milling

I tally 48 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma.
One new deal was discussed this week: City Developments (CIT SP)‘s Offer for Millennium & Copthorne Hotels Nz (MCK NZ).
Key updates/news took place on: Insignia Financial (IFL AU), AVJennings (AVJ AU), Shanghai Henlius Biotech (2696 HK), Canvest (1381 HK), Greatview Aseptic Packaging (468 HK), and Makino Milling Machine (6135 JP).

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Jan 25

Daily Brief Event-Driven: Tsuruha (3391) – Welcia (3141) Future Merger Ratio – Pounding the Table and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Tsuruha (3391) – Welcia (3141) Future Merger Ratio – Pounding the Table
Converting Samsung Life’s Samsung Electronics Stake to Long-Term Holdings: Clearing up the Confusion
Monte Dei Paschi Di Siena’s €13.3 Billion Bid for Mediobanca: First Take

Tsuruha (3391) – Welcia (3141) Future Merger Ratio – Pounding the Table

In late December, a Jiji article said Tsuruha & Welcia would look to integrate by end-2025, now that they no longer need SEC approval. Odd language, but we’ll take it.
That means we look to what might happen between here and there. The companies will hire Legal and Financial Advisors, wait until both report FY, then start negotiating.
What has been the long-term trend and the trend of the last two years is different. It’s worthwhile looking at valuations and expectations to decide how to trade. It’s good.

Converting Samsung Life’s Samsung Electronics Stake to Long-Term Holdings: Clearing up the Confusion