Event-Driven

In Feb-24, Aeon (8267) agreed with Oasis Management to buy its stake in Tsuruha Holdings (3391) and Tsuruha and Welcia Holdings (3141) would discuss a merger, details decided by end-2027.
On Saturday 27 December, a Jiji article said the two would look to integrate by end-2025, now that they no longer need SEC approval. That reason sounds wrong.
The language of the articles is odd but we have to take it at face value. That means we look to what might happen between here and there.

Shandong Hi-Speed New Energy (1250 HK): SPA Completed, Next Unconditional MGO

Shandong Hi-Speed Holdings Gro (412 HK) completed the acquisition of CITIC Securities 13.52% stake in Shandong Hi-Speed New Energy G (1250 HK) at HK$1.78 per share.
SPA completion triggers a mandatory unconditional offer at HK$1.78 per share. The composite document will be sent, and the offer will open by 28 January.
At the last close and for an early February payment, the gross and annualised spread of the offer is 2.9% and 30.2%, respectively.

Vesync (2148 HK): 33.3% Premium For An Illiquid Arb – Yep, This Is Done.

When Vesync (2148 HK), a manufacturer of small home appliances, was suspended pursuant to the Takeovers Code, an Offer from the Yang family, led by chairman/CEO, controlling ~69.04%, was expected.
And on cue, that is what unfolded. HK$5.60/share, a premium of 33.33%, by way of a Scheme. The price is final. A scrip option afforded. No dividends.
The blocking stake is 1.675%. Expect around fourth months to complete. This is done.

InnoScience (2577 HK): Prices at Low End & Lists Today; Index Inclusion Timeline

InnoScience Suzhou Technology (2577 HK) has priced its IPO at HK$30.86/share, the low end of the range. Over half the shares have been allotted to cornerstone investors.
InnoScience Suzhou Technology (2577 HK) should be added to the HSCI in March and will be added to Southbound Stock Connect early March.
Inclusion in global indices will take place in 2026 and there will be supply in mid- and late-2025 following lock-up expiries.

Weekly Deals Digest (29 Dec) – Henlius, Vesync, SDHS New Energy, GA Pack, Makino, Malaysia Airports

A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
ECM developments: LG CNS (LGCNSZ KS) seeks to raise up to US$837 million through a primary/secondary offering.
Event-Driven developments: Shanghai Henlius Biotech (2696 HK), Greatview Aseptic Packaging (468 HK), Vesync (2148 HK), Makino Milling Machine Co (6135 JP), Malaysia Airports Holdings (MAHB MK).

Merger Arb Mondays (30 Dec) – ESR, Canvest, Vesync, GAPack, SDHS New Energy, CPMC, Makino, Arcadium

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: Vesync (2148 HK), Makino Milling Machine Co (6135 JP), Seven & I Holdings (3382 JP), Arcadium Lithium (LTM AU), Get Nice Financial Group Ltd (1469 HK).
Lowest spreads: Lifestyle China (2136 HK), Renewable Japan (9522 JP), Macromill, Inc (3978 JP), Fuji Soft Inc (9749 JP), Latin Resources (LRS AU), Lac Co Ltd (3857 JP).

Adani Green Energy (ADANIGR IN): Facing the Passive Boot; But Who Will Buy?

Passive global index trackers sold Adani Green Energy (ADANIGR IN) in November following a big drop in free float for the stock.
There could be more selling in Adani Green Energy in February as the stock is deleted from the same large global index due to failing free float market cap thresholds.
With the company at the center of the U.S indictment focused on bribery charges, active foreign and local investors will be wary of buying the stock.

Shandong Hi-Speed New Energy (1250 HK)’s Unconditional MGO. It Is What It Is

Back on the 27th November, Shandong Hi-Speed Holdings (412 HK) (SDHG) entered into SPAs with two Citic Securities (6030 HK)-backed funds, holding 13.52% in Shandong Hi-Speed New Energy (1250 HK).
The SPAs were completed on the 27th December, elevating SDHG’s stake to 56.97%, triggering an unconditional MGO. The Offer Price is HK$1.78/share, the same as that under the SPAs.
The premium to last close is just 7.23%. But don’t expect a bump in terms. SDHG intends to maintain Shandong Hi-Speed New Energy’s listing.

EQD | Nikkei Index Options Weekly – December 23 – 27

NKY looks to be playing catch-up with USD/JPY, rising 4.03% on the week and breaking out of recent range after not moving much in the first half of the month.
Implied volatility continues to slide lower with 1M implied vol down 2.5 points on the week.
Call volumes larger than Put volumes for the first time in a while on Fridays 1.80% price surge.

EQD | Kospi Index Options Weekly – December 23 – 27

Since the end of September the Kospi has been diverging from the Nikkie which has rallied as JPY has weakened. Both Kospi and KRW have been moving lower.
Vast majority of option trading is in short dated expiries. The largest volume day of the week saw 99% of trading in expires <= Jan 09
Implied vols were quiet but there was some increased tilt to skew making out-of-the-money Puts slightly more expensive.

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Dec 29

Daily Brief Event-Driven: Vesync (2148 HK): The Yang Family’s Scheme Offer Is Light but Likely Done and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Vesync (2148 HK): The Yang Family’s Scheme Offer Is Light but Likely Done
(Mostly) Asia-Pac M&A: Makino, Henlius, GAPack, Nec Networks, Suntec REIT, VCredit, Pentamaster
Last Week in Event SPACE: Honda, Shanghai Henlius, Exedy, Arcadium Lithium

Vesync (2148 HK): The Yang Family’s Scheme Offer Is Light but Likely Done

Vesync (2148 HK) disclosed a Cayman scheme privatisation offer from the Yang family at HK$5.60, a 33.3% premium to the last close price of HK$4.20. The offer is final.
While the offer is marginally above the IPO price, it is light compared to sell-side price targets, peer multiples and historical trading ranges.
Nevertheless, the scrip option, irrevocables and no disinterested shareholder holding a blocking stake facilitate the scheme vote. The offer could be completed by May.

(Mostly) Asia-Pac M&A: Makino, Henlius, GAPack, Nec Networks, Suntec REIT, VCredit, Pentamaster

I tally 51 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
Four new deals this week: Makino Milling Machine Co (6135 JP)‘s hostile Offer; VCredit Holdings Ltd (2003 HK)‘s takeunder; Vesync (2148 HK)‘s Scheme, and Pentamaster International (1665 HK)‘s Scheme.
Key updates/news took place on: Shanghai Henlius Biotech (2696 HK), Greatview Aseptic Packaging (468 HK), Nec Networks & System Integr (1973 JP), and Suntec REIT (SUN SP).

Last Week in Event SPACE: Honda, Shanghai Henlius, Exedy, Arcadium Lithium

Honda (7267 JP) announced a HUGE ¥1.1trln buyback. At ~¥1500/share, this would increase EPS by 17+%. Buy the shares in the low ¥1,400s. Expect this to be a range trade.
Shanghai Henlius Biotech (2696 HK)‘s Circular is now out. Hoome straight and done deal.
Murakami-San has started selling Exedy Corp (7278 JP), earlier than expected. Best to get out first, ask questions later.

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Dec 28

Daily Brief Event-Driven: Nidec Goes Hostile On Makino Milling at ¥11 and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Nidec Goes Hostile On Makino Milling at ¥11,000/Share
What We’ve Got on Samsung Electronics’ Value-Up Disclosure
Makino Milling Machine (6135 JP): Nidec’s (6594 JP) Hostile Preconditional Tender Offer at JPY11,000

Nidec Goes Hostile On Makino Milling at ¥11,000/Share

This morning, Nidec Corp (6594 JP)announced that it intended to launch a Tender Offer on Makino Milling Machine Co (6135 JP) without the support of Makino management.
The same pattern as Takisawa Machine Tool (6121 JP). Nidec decides, relying on the METI Guidelines for Corporate Takeovers for procedure, announces, and puts the onus on the Target to accept.
But shareholders should hope Makino Milling takes a page from the example provided by Chilled & Frozen Logistics Holdings (9099 JP) back in spring 2024. This could get funky.

What We’ve Got on Samsung Electronics’ Value-Up Disclosure

By Sanghyun Park

Yesterday, the FSC pushed for value-up policies, but the real buzz was about Samsung Electronics hinting at rolling out its own value-up plan soon.
Samsung may raise its dividend payout from 50% to 60% and could issue a special dividend if semiconductor results improve or FCF exceeds expectations.
Samsung’s value-up disclosure may not cause short-term price action but could strengthen downside support. It may focus on dividends over buybacks, potentially boosting preferred stock.

Makino Milling Machine (6135 JP): Nidec’s (6594 JP) Hostile Preconditional Tender Offer at JPY11,000

Nidec Corp (6594 JP) announced a hostile preconditional tender offer for Makino Milling Machine Co (6135 JP) at JPY11,000 per share, an 18.9% premium to the last close.
The offer is preconditioned on several regulatory approvals. It is scheduled to start on 4 April, even if the Board does not recommend it.
The Board has three options: engage to facilitate a friendly offer, find a white knight bidder and launch an ambitious MTM plan to thwart the offer.

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Dec 27

Daily Brief Event-Driven: Shin Kong/Taishin Merger – Proceeding Apace and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Shin Kong/Taishin Merger – Proceeding Apace
Macromill (3978 JP) – Five Major Investors Have 50+%; CVC Extends and Will Need to Bump Or Walk
CPMC Holdings (906 HK): On the Cusp of Being Declared Unconditional
Malaysia Airports (MAHB MK): Awaiting the Consortium’s Next Move
Event Driven: Demerger of OneSource: A Multi-Modality CDMO
A Potential JV Between E Mart and Alibaba’s Korean Operations Could Value the JV at About $4 Billion
InnoScience Technology (2577 HK): Low IPO Free Float Delays Global Index Inclusion

Shin Kong/Taishin Merger – Proceeding Apace

Once shareholders of Shin Kong Financial Holding (2888 TT) and Taishin Financial Holding (2887 TT) agreed to the merger two months ago, that meant an FSC submission would come shortly.
It came on 3rd December. Normally it takes two months, but can be extended. It appears the TFTC submission (which is considered wholly separately) was made as early as September.
This should get approved within the timeframe or not long afterwards. There is one known “document” missing from the application as of submission, but it shouldn’t be a problem.

Macromill (3978 JP) – Five Major Investors Have 50+%; CVC Extends and Will Need to Bump Or Walk

Three pre-existing Large Shareholders have not sold down. Two new 5+% shareholders have appeared since Tender Launch. Together, their reports give them 51.7% of shares out.
That provides them with a significantly strong implied negotiating hand. Given the midpoint of the Target Company’s Advisor’s DCF Range, I expect a bump.
Today the Bidder extended for 10 more days. They didn’t have the shares to close. I expect they won’t unless they bump a lot.

CPMC Holdings (906 HK): On the Cusp of Being Declared Unconditional

CPMC Holdings (906 HK)’s offer from ORG Technology Co., Ltd. A (002701 CH) is HK$7.21 with a 50% minimum acceptance condition. The first closing date is 10 January.
CCASS data shows that Mr Wei has tendered (22.01% of outstanding shares). Including acceptances, ORG’s shareholding was 46.63% of outstanding shares as of 24 December.
The Board supports the offer, and it is close to being declared unconditional. At the last close and 25 January payment, the gross/annualized spread was 0.8%/10.9%.

Malaysia Airports (MAHB MK): Awaiting the Consortium’s Next Move

Malaysia Airports Holdings (MAHB MK)‘s voluntary conditional RM11.00 offer from the consortium has a first closing date of 8 January.
Unusually, the independent directors and adviser have differing opinions – the directors and adviser agree that the offer is NOT fair. However, the directors opine that it is NOT reasonable.
The consortium has three options – keep terms unchanged (hope for the best), bump or lower the acceptance threshold. The most likely option is to lower the acceptance threshold.

Event Driven: Demerger of OneSource: A Multi-Modality CDMO

By Nimish Maheshwari

OneSource is riding the surging demand for GLP-1 drugs, a market projected to reach $30 Billion by 2030, with its expertise in Drug-Device Combination (DDC) solutions.
OneSource is projected to achieve revenue of $350-$400 million over the next 3-4 years from $145 million in 2024 , with an impressive EBITDA margin approaching 40% from 25% in 2024.
OneSource is expected to receive Listing Approval from the Stock Exchanges during Q4 FY25

A Potential JV Between E Mart and Alibaba’s Korean Operations Could Value the JV at About $4 Billion

By Douglas Kim

On 26 December, Reuters mentioned that E Mart could announce a major JV announcement with Alibaba Group Holding’s Korean operations that could value the JV at about $4 billion.
The official launch of the JV is expected to take place sometime in 1H 2025. Gmarket and AliExpress Korea will become subsidiaries of this JV.
Although this is not a done deal, this potential JV between Gmarket and AliExpress Korea is likely to have a positive impact on E Mart Inc (139480 KS).

InnoScience Technology (2577 HK): Low IPO Free Float Delays Global Index Inclusion

By Dimitris Ioannidis

InnoScience Suzhou Technology (2577 HK) is anticipated to debut at the HKEX on 30 December 2024 with a valuation between $3.5bn – $3.9bn.
InnoScience Suzhou Technology (2577 HK) is forecasted to fail the fcap threshold in the first place for both global indices due to small size offering and lock-ups.
The security is expected to be added in China all-world or small-cap at the September 2025 review following the 6-month lock-up expiry.

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Dec 26

Daily Brief Event-Driven: Korea: Potential Relegations from K League 1 and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Korea: Potential Relegations from K League 1

Korea: Potential Relegations from K League 1

There are quite a few stocks in Korea that have underperformed their peers and could be deleted from global passive portfolios in February.
There are still 3 weeks left for the stocks to redeem themselves and avoid relegation from the K League, so watch out for big price moves.
Based on our estimate of passive assets, trackers will need to trade between US$45m to US$114m of the stocks. Impact will vary between 2.6x-30x of ADV to trade.

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Dec 25

Daily Brief Event-Driven: Korea FSC Official: New Rule to Block “Treasury Stock Magic” Takes Effect on 31st and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Korea FSC Official: New Rule to Block “Treasury Stock Magic” Takes Effect on 31st
Suntec REIT (SUN SP): Tang’s Offer Now Open

Korea FSC Official: New Rule to Block “Treasury Stock Magic” Takes Effect on 31st

By Sanghyun Park

Korea FSC announced on the 24th that the updated Capital Markets Act rules, approved by the Cabinet, will take effect on the 31st.
Banning new shares to treasury stocks during spin-offs could shift board focus in Korea, reducing big shareholder influence and prioritizing the broader shareholder base.
The capital markets law change could shift shareholder returns from buybacks to dividends, marking a key inflection point for traders, especially in Korea’s preferred stock market.

Suntec REIT (SUN SP): Tang’s Offer Now Open

On the 5th December, Gordan Tang (& his wife Celine) acquired 2.14% in Suntec REIT (SUN SP), lifting their stake to 31.45% from 29.31%, triggering a MGO.
This is appears to be a technical Offer. The Offer price is S$1.16/share against a S$1.17/share undisturbed price. Timing, however, IS curious after ESR Group (1821 HK)‘s recent Offer.
The Offer Doc is now out and shareholders can tender. At S$1.18/share as I type, zero tendering should occur. The Offer closes on the 20 January, unless extended.

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Dec 24

Daily Brief Event-Driven: Honda (7267 JP) – MAMMOTH New ¥1.1Trln Stock Buyback and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Honda (7267 JP) – MAMMOTH New ¥1.1Trln Stock Buyback
Henlius (2696 HK): Circ Out. 22nd Jan H-Class Meeting
[Japan Activism] Exedy (7278) – Murakami-San Selling into the Buyback
EQD | Nikkei Index Options Weekly – December 16 – 20
EQD | Hong Kong Single Stock Options Weekly December 16 – 20
EQD | Kospi Index Options Weekly – December 16 – 20
VCredit (2003 HK): Ma Does Makes His Move. But Nothing To Shout About
Goldlion Holdings (533 HK): Chairman’s Scheme Privatisation Is a Done Deal
GA Pack (468 HK): The State of Play
LG CNS IPO: Limited Float Pushes Back Passive Buying

Honda (7267 JP) – MAMMOTH New ¥1.1Trln Stock Buyback

Today, along with the announcement of Memorandum of Understanding between Honda Motor (7267 JP), and Nissan Motor (7201 JP) to work towards negotiating a Joint Holding Company by June 2025…
Honda cancelled their existing ¥100bn buyback, and initiated a truly mammoth NEW Buyback – up to 1.1 billion shares (23.7% of TSO), spending up to ¥1.1trln on market through Dec-2025.
Assuming the stock pops, it is probably “only” worth 15-18%, but that’s still a LOT. At that rate it boosts BVPS by 8+% on its own, and EPS by 17%.

Henlius (2696 HK): Circ Out. 22nd Jan H-Class Meeting

After Shanghai Henlius Biotech (2696 HK) secured NDRC approval on the 22nd Nov; fulfilled pre-cons on the 16th December, the Circular was dispatched last night, the 22nd December.
The EGM/H-share class meeting will take place on the 22nd January, one day past my estimate. Settlement should be on ore around the 18th Feb, a week beyond my estimate.
Trading at a gross/annualised spread off 2.9%/20.3%. Still attractive here.

[Japan Activism] Exedy (7278) – Murakami-San Selling into the Buyback

Exedy Corp (7278 JP) announced a big buyback. Murakami-san did not sell the first pop. The shares fell. Exedy started buying back and the shares went up. Now Murakami’s selling.
Today after the close, Murakami Group companies announced that City Index Elevens had started selling. They sold 1.25% of shares out in 6 trading days to 16 December.
I expect they sold another 2% in the past week through today. Shares tanked today. This is not a good signal. And it comes earlier than I expected.

EQD | Nikkei Index Options Weekly – December 16 – 20

All 5 trading days of the past week saw non-volatile price declines but with implied vols still ticking higher leaving historic vol and implied vol moving in opposite directions.
Trading activity focused on Puts, 59.5% of all options trades were Puts last week
Postions being covered into market weakness as seen from large decrease in open interest (60% of the decline was Puts).

EQD | Hong Kong Single Stock Options Weekly December 16 – 20

Communication Services had 39% of single stock option volumes vs only 22% of the open interest highlighting short expiry / speculative nature of trading.
Tencent and Baidu heading in opposite directions – Baidu vol on the inexpensive side vs Tencent vol.
Xiaomi one of only 2 optionable names trading at 52-week high (Sunny optical being the other).

EQD | Kospi Index Options Weekly – December 16 – 20

Kospi is now off 20% from its 52-week highs. Historic vols are picking up and implieds looking like good value given market dynamics.
Hedging increased with broad based positioning in Puts across out-of-the-money strikes.
Heavier volume in Puts with 53.2% of added open interest being Puts.

VCredit (2003 HK): Ma Does Makes His Move. But Nothing To Shout About

When VCredit Holdings (2003 HK), a provider of consumer financial services in China, was suspended pursuant to the Takeovers Code, I expected an Offer from Ma Ting Hung, VCredit’s chairman.
Well, we do have an Offer. Ma acquired 4.19% via two SPAs, lifting his stake to 44.04%. Stephen Liu (an ED) also acquired 1.43% via an SPA.
As Ma, Liu, and other parties, are presumed to be acting in concert, an unconditional MGO is triggered. But at HK$1.80/share, a 9.09% discount to undisturbed.

Goldlion Holdings (533 HK): Chairman’s Scheme Privatisation Is a Done Deal

On 17 December, Goldlion Holdings (533 HK) announced a scheme offer from Mr Tsang (Chairman/CEO) at HK$1.5232 per share, a 71.1% premium to the undisturbed price of HK$0.89 (20 November).
The key condition is the scheme approved by at least 75% disinterested shareholders (<10% disinterested shareholders rejection). The shareholder with a blocking stake is a seller.
The offer is reasonable compared to peer multiples and historical trading ranges. At the last close and for a late April payment, the gross/annualised spread is 7.3%/22.7%.

GA Pack (468 HK): The State of Play

On 20 December, Shandong Xinjufeng Technology Packaging (301296 CH) satisfied the precondition for its Greatview Aseptic Packaging (468 HK) offer. The offer document will be despatched by 27 December.
Analysing the EGM vote on 18 October suggests that the 50% minimum acceptance condition will be met if no competing management offer is made.
Management will oppose the offer, but the last EGM protest votes suggest that many minorities will ignore management. At the last close, the gross/annualised spread was 2.3%/25.3%.

LG CNS IPO: Limited Float Pushes Back Passive Buying

LG CNS (LGCNSZ KS) is looking to raise up to KRW 1,199bn (US$830m), valuing the company at KRW 6 trillion (US$4.15bn) at the top end of the IPO price range.
As a member of the IT sector, inclusion in the KOSPI200 Index will only take place via Fast Entry (near impossible) or as a large-scale company.
Inclusion in global indices could commence in September 2025 and will be easier if the identity of the pre-IPO minority shareholders is disclosed or if the strategic investors sell.

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Dec 23

Daily Brief Event-Driven: NEC Networks (1973 JP) Next To Last Showdown – NEC Lowers Minimum and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

NEC Networks (1973 JP) Next To Last Showdown – NEC Lowers Minimum, Bumps Tiny, Ignores Synergies
Henlius (2696 HK): Interesting Shareholder Movements with the Vote on 22 January
Pentmaster (1665 HK): Malaysian Parent’s Offer For Pseudo Dual-Listing
Japan: Potential Passive Selling in February
Merger Arb Mondays (23 Dec) – Seven & I, Fuji Soft, NEC Networks, Pentamaster, Goldlion, Henlius
Ping An Healthcare and Technology (1833 HK) – Cash Dividend Or Scrip Dividend?
Korea’s Dem Leader: PBR Under 0.3x Should Be Hostile M&A Targets – Names That Could Feel the Heat
KOSPI Size Indices: Overlap Between Global Passive Selling & Downward Migrations
Analyzing the Regulatory Loophole in Kaspi’s Acquisition of D-Market’s Controlling Stake and Potential Outcomes
Strategic Transactions and Legal Developments: HEPS, ACC:OL, ABCP, BELFB, NWOR:L, EMBRAC, AVAP:L

NEC Networks (1973 JP) Next To Last Showdown – NEC Lowers Minimum, Bumps Tiny, Ignores Synergies

On Friday, NEC Corp (6701 JP) raised the price for its Tender Offer on Nec Networks & System Integr (1973 JP) from ¥3,250 to ¥3,300.
It also lowered the minimum to 10.153mm shares (6.82%). It had proposed to do so earlier but NESIC demanded a bump, and NEC didn’t want to.
Now it’s bumped. That’s the “final price.” But it still does not include “a fair allocation of a portion of the value that cannot be realised without an acquisition.”

Henlius (2696 HK): Interesting Shareholder Movements with the Vote on 22 January

Shanghai Henlius Biotech (2696 HK)’s IFA opines that Shanghai Fosun Pharmaceutical (Group) (2196 HK)’s HK$24.60 offer is fair and reasonable. The vote is on 22 January.
The key condition is approval by at least 75% of independent H Shareholders (<10% of all independent H Shareholders rejection). There are recent movements in H Share substantial shareholders.
Key shareholders should be supportive of the cash/scrip offer. At the last close and for a 15 February payment, the gross/annualised spread is 2.9%/16.9%.

Pentmaster (1665 HK): Malaysian Parent’s Offer For Pseudo Dual-Listing

In Pentamaster Corp: In The (EV) Driver’s Seat in February last year, I discussed Pentamaster Corp (PENT MK)‘s supply of semiconductors testers to the electric vehicle business.
A quirk of PENT was that its pseudo dual-listed twin – Pentamaster International (1665 HK) – trades at a significant discount.
In a not altogether surprising move, PENT is now seeking to take PI private by way of a Scheme at HK$1.00/share, including a HK$0.07/share dividend.

Japan: Potential Passive Selling in February

Currently, 9 stocks could be deleted from global passive portfolios in February. The deletion will lead to liquidity events where trackers will need to sell multiple days of ADV.
There has been a buildup on shorts on few stocks with minimal positioning in the other stocks. That could change once the calendar ticks over to 2025.
Kokusai Electric (6525 JP) is a potential inclusion to the Nikkei 225 (NKY INDEX) in March and this deletion could provide liquidity to enter a position ahead of that announcement.

Merger Arb Mondays (23 Dec) – Seven & I, Fuji Soft, NEC Networks, Pentamaster, Goldlion, Henlius

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: Arcadium Lithium (LTM AU), Seven & I Holdings (3382 JP), Get Nice Financial Group Ltd (1469 HK), ESR Group (1821 HK), Goldlion Holdings (533 HK).
Lowest spreads: Lifestyle China (2136 HK), Renewable Japan (9522 JP), Macromill, Inc (3978 JP), Fuji Soft Inc (9749 JP), Nec Networks & System Integr (1973 JP).

Ping An Healthcare and Technology (1833 HK) – Cash Dividend Or Scrip Dividend?

By Xinyao (Criss) Wang

Hopson Development (754 HK) is cash-strapped and it will most likely choose cash dividend, which would increase the likelihood that Glorious Peace’s shareholding ratio will increase to more than 50%.
If PAGD’s share price is higher than HK$6.12, there is arbitrage opportunity. Since Ping An may hope other shareholders to choose cash dividends, future stock price may fall below HK$6.12
A risk point is Ping An can actually wait for other shareholders to make their choices before making the final decisions based on the stock price situation at that time.

Korea’s Dem Leader: PBR Under 0.3x Should Be Hostile M&A Targets – Names That Could Feel the Heat

By Sanghyun Park

During the public hearing, Lee Jae-myung asked Simpac’s CFO about their 0.3x PBR, then remarked, “That’s prime territory for a hostile M&A.”
With PBRs under 0.3x, these companies may roll out shareholder returns to manage political pressure—definitely worth tracking from a value-up trading perspective.
Hanwha is interesting due to its room for shareholder returns and potential merger with Hanwha Energy. With the new Commercial Act, a public tender offer is likely. Worth watching closely.

KOSPI Size Indices: Overlap Between Global Passive Selling & Downward Migrations

The review period for the March rebalance of the KOSPI Size Indices commenced on 1 December and will end on 28 February.
A quarter of the way through the review period, we forecast 37 migrating stocks. Among new listings, 1 could be added to LargeCap, 3 to MidCap and 2 to SmallCap.
Four downward migrations were deleted from a global index in November. Now, three more downward migrations could be deleted from the same global index in February.

Analyzing the Regulatory Loophole in Kaspi’s Acquisition of D-Market’s Controlling Stake and Potential Outcomes

By Dalius Tauraitis

D-Market’s controlling stake is being sold to Kaspi, acquiring Class A shares at $7.57 and Class B at $4.75.
Turkish law mandates a takeover offer for minority shares, but HEPS’s ADR structure exempts it from this requirement.
Activism efforts aim to increase HEPS’s shareholders to 500, potentially forcing Kaspi to include minority shareholders.

Strategic Transactions and Legal Developments: HEPS, ACC:OL, ABCP, BELFB, NWOR:L, EMBRAC, AVAP:L

By Dalius Tauraitis

D-Market Electronic Services & Trading’s (HEPS) controlling stake is being sold to Kaspi, exploiting a regulatory loophole to avoid a mandatory takeover offer.
Aker Carbon Capture (ACC:OL) sold its business, leaving a cash shell trading at a 20% discount to net cash.
Ambase (ABCP) is litigating over an Equity Put Right, with summary judgment motions scheduled, potentially impacting share price.

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Dec 22

Daily Brief Event-Driven: HK Connect SOUTHBOUND Flows (To 20 Dec 2024); Financials and Telecoms Still Tops and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

HK Connect SOUTHBOUND Flows (To 20 Dec 2024); Financials and Telecoms Still Tops
Pentamaster International (1665 HK): Pentamaster Corp and AchiCapital’s Light Scheme Offer
Last Week In Event SPACE: Seven & I, CPMC, UBTech Robotics, Macromill, 2024 Best-Of
(Mostly) Asia-Pac M&A: Beenos, Insignia, Henlius, GAPack, Fuji Soft, Goldlion, Malaysia Airports
HSI, Nikkei 225, NIFTY 50, Kospi 200, ASX 200, CSI 300: Year-End Trends and Holiday Market Moves!
A Potential Merger Between Honda and Nissan – Impact on Hyundai Motor and Kia Corp
China Healthcare Weekly (Dec.22) – Zai Lab, Junshi, How to Choose PA Good Doctor’s Special Dividend?
Malaysia Airports (MAHB MK): IFA Says NOT Fair, But Reasonable; And To Accept Terms
A/H Premium Tracker (To 20 Dec 2024): Pairwise Intracorrelation and Vol Even Higher

HK Connect SOUTHBOUND Flows (To 20 Dec 2024); Financials and Telecoms Still Tops

SOUTHBOUND gross trading activity fell 20% week-on-week this week. Net buying was a little stronger.
Alibaba Group Holding (9988 HK) was a net SOUTHBOUND sell this week for the first weekly sell since it became Southbound-eligible. Friday was the largest one-day sell in that period.
Tech is still on the sell side and financials are still being bought very bigly.

Pentamaster International (1665 HK): Pentamaster Corp and AchiCapital’s Light Scheme Offer

Pentamaster International (1665 HK) disclosed a Cayman scheme privatisation offer from Pentamaster Corp (PENT MK) and AchiCapital at HK$1.00 (HK$0.93 cash + HK$0.07 dividend), a 56.3% premium to the undisturbed price.
The offer is final but unattractive compared to peer multiples. The shareholder with a blocking stake is a seller, but there is risk due to a high AGM participation rate.
An arguably light offer in which the Holdco is privatising its OpCo by arbitraging the valuation discrepancies across two exchanges may not sit well with minorities.

Last Week In Event SPACE: Seven & I, CPMC, UBTech Robotics, Macromill, 2024 Best-Of

The new article on Seven & I Holdings (3382 JP) from TV Tokyo is causing a dip on top of last week’s weakness. This is a dip to buy.
CPMC Holdings (906 HK)‘s Offer is now open for tendering. Ignore the rumours. Zhang Wei will tender. Expect payment before Chinese New Year.
Accounting solely for the pre-IPO investors, 164.6m shares (US$1.9bn) in UBTech Robotics (9880 HK) will be unlocked, ~39.2% of the firm’s total shares outstanding, and 91 days of three-month ADV.

(Mostly) Asia-Pac M&A: Beenos, Insignia, Henlius, GAPack, Fuji Soft, Goldlion, Malaysia Airports

I tally 51 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
Two new deals this week: Goldlion Holdings (533 HK)‘s Scheme, and Beenos Inc (3328 JP)‘s Tender Offer.
Key updates/news took place on: Insignia Financial (IFL AU), Shanghai Henlius Biotech (2696 HK), GAPack (468 HK), Fuji Soft (9749 JP), Macromill (3978 JP) and Malaysia Airports Holdings (MAHB MK).

HSI, Nikkei 225, NIFTY 50, Kospi 200, ASX 200, CSI 300: Year-End Trends and Holiday Market Moves!

By Nico Rosti

As the year comes to its end, the trading calendar is impacted by two shortened weeks, with the Christmas holiday and New Year’s Day both falling midweek.
Holidays market trends can be affected by various non-market factors but it’s always good to check the indexes probability of trend reversals, to avoid surprises.
In this insight, we’ll take a quick look at the major Asia-Pacific market indices—a ‘Christmas Carousel of Odds‘ for Asian markets, if you will.

A Potential Merger Between Honda and Nissan – Impact on Hyundai Motor and Kia Corp

By Douglas Kim

A potential merger between Nissan Motor and Honda Motor would create the third largest auto group in the world.
If this merger is successful, it could have a short term positive impact on Hyundai Motor since it could result in a reduction of overlapping sales/marketing and production of Nissan.
However, a merger of Honda and Nissan could negatively impact Hyundai Motor over the long term because the merged entity could produce more high quality, price competitive vehicles.

China Healthcare Weekly (Dec.22) – Zai Lab, Junshi, How to Choose PA Good Doctor’s Special Dividend?

By Xinyao (Criss) Wang

Increasing revenue without increasing profits is “a big denial” of a company’s business model. Unless Zai Lab significantly reduces costs and maintains revenue high growth, its investment value is low.
Junshi’s 2024 revenue is likely to return to over RMB1.5 billion due to market share expansion in PD-1. Strict cost control will be the main theme for the future.
If PAGD’s share price is higher than HK$6.12, there would be arbitrage opportunity. If Ping An hopes other shareholders to choose cash dividend, future stock price may fall below HK$6.12.

Malaysia Airports (MAHB MK): IFA Says NOT Fair, But Reasonable; And To Accept Terms

Back on the 15th May, a consortium (Khazanah Nasional, EPF, the Abu Dhabi Investment Authority, and Global Infrastructure Partners) collectively holding 41.22%, launched an Offer for Malaysia Airports (MAHB MK).
After some political gymnastics, MAHB squared away the necessary regulatory approvals, and a firm Offer was made on the 15th November. The Offer Doc dispatched on the 6th December.
In the Circular on Friday, the IFA said NOT fair – with reference to a SOTP; but reasonable referencing historical market pricing and that no competing Offer will emerge.

A/H Premium Tracker (To 20 Dec 2024): Pairwise Intracorrelation and Vol Even Higher

AH Premia are all over the place this week. Despite that, pairwise intracorrelation is…. up? Yup. Average Pairwise Volatility is up even more.
Some of this may be stocks being bullied by large SOUTHBOUND flows in a quieter end-of-year market.
Finance is seeing big net SOUTHBOUND buying but that is not showing up in A/H premia. I expect things stay noisy through year-end.

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✓ Company Data and News
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Dec 21

Daily Brief Event-Driven: 7&I (3382 JP) – Share Price Dipping Deeper Means Dipping Toes Deeper and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

7&I (3382 JP) – Share Price Dipping Deeper Means Dipping Toes Deeper
GAPack (468 HK): XJF Satisfies Pre-Cons. Management Should Back Terms
CPMC Holdings (906.HK) Update – The Critical Moment Has Arrived
High Conviction 2025: Porsche’s SE Discount to NAV Reduction
CHA Biotech Announces A Capital Raise of 41% of Outstanding Shares

7&I (3382 JP) – Share Price Dipping Deeper Means Dipping Toes Deeper

Seven & I Holdings (3382 JP) shares are in a lull here. Winter doldrums without news as the Ito consortium gets its ducks in a row and 7&i sells York.
Alimentation Couche-Tard (ATD CN) is waiting patiently. They have the ability to wait, and to fund, and pay up.
An article/show is causing a dip today on top of last week’s weakness. This is a dip to buy.

GAPack (468 HK): XJF Satisfies Pre-Cons. Management Should Back Terms