Category

Event-Driven

Daily Brief Event-Driven: Newmont’s Upcoming (March 2024) ASX Selldown and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • Newmont’s Upcoming (March 2024) ASX Selldown
  • HK Connect SOUTHBOUND Flows (To 22Dec23); CNOOC/Energy To The Buy Side; Tencent Heavily Sold, Again.
  • Mainland Connect NORTHBOUND Flows (To 22 Dec 23): CATL Is the BIG BUY This Week
  • (Mostly) Asia-Pac Weekly Risk Arb Wrap: Adbri, Link Admin, Azure Minerals, Lithium Power, JSR Corp
  • Last Week in Event SPACE: Benefit One, Hankook, Toyo Construction, Hanwha, Tsuruha, Livent/Allkem
  • Weekly Deals Digest (24 Dec) – Benefit One, JSR, Weiqiao Textile, A2B, Adbri, Azure, Link, Probiotec


Newmont’s Upcoming (March 2024) ASX Selldown

By Travis Lundy

  • As warned in Newcrest-Newmont Merger: Fancy Index Shenanigans in October, the merger construct meant flowfront, index flowback, then later index flowback.
  • We are now between the second and third events. The data on the third is there, but it won’t be obvious to everyone. 
  • There should be a large, not publicly announced, downweight on Newmont (NEM AU) in the March 2024 index review for the major local indices.

HK Connect SOUTHBOUND Flows (To 22Dec23); CNOOC/Energy To The Buy Side; Tencent Heavily Sold, Again.

By Travis Lundy

  • SOUTHBOUND flows showing reversion tendencies still. Hs up vs As only slightly. Liquid Hs were down vs As. 
  • SOUTHBOUND saw HK$144bn of net INflows on the week to 22 Dec, which was HK$4bn of Tencent net sales and net buying of a bunch of ETFs.
  • Some banks and energy names were top net inflows as a percentage of ADV. This week was heavy for SOUTHBOUND, quiet for foreigners, next week may be quiet for both.

Mainland Connect NORTHBOUND Flows (To 22 Dec 23): CATL Is the BIG BUY This Week

By Travis Lundy

  • The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.
  • Last week saw NORTHBOUND net sell RMB 2.2bn of A-shares on sharply lighter activity. Quieter all week.
  • Looking at the change in the weekly position charts over the last year is striking (easiest in the Sectors table to start). Still.

(Mostly) Asia-Pac Weekly Risk Arb Wrap: Adbri, Link Admin, Azure Minerals, Lithium Power, JSR Corp

By David Blennerhassett


Last Week in Event SPACE: Benefit One, Hankook, Toyo Construction, Hanwha, Tsuruha, Livent/Allkem

By David Blennerhassett

  • Stay long Benefit One (2412 JP). Dai-Ichi Life can pay more, if pushed on pricing. May not be huge, but it could be a few percent or even 10%. 
  • Hankook & Company (000240 KS)‘s family feud goes public. The public tender looks set to fail. Coal in stockings all-round.
  • If you had any Toyo Construction (1890 JP) left over from the rally up to ¥1,300+, get out. There may be a better opportunity later, but not here.

Weekly Deals Digest (24 Dec) – Benefit One, JSR, Weiqiao Textile, A2B, Adbri, Azure, Link, Probiotec

By Arun George


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Daily Brief Event-Driven: A2B (A2B AU): A$0.60 Fully Franked Divi + A$1.45/Share Offer From ComfortDelGro and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • A2B (A2B AU): A$0.60 Fully Franked Divi + A$1.45/Share Offer From ComfortDelGro
  • Probiotec (PBP AU) Agrees To Pyridam’s Bid
  • A2B Australia (A2B AU): ComfortDelGro’s Binding Proposal
  • Probiotec (PBP AU): Pyridam’s Binding Proposal


A2B (A2B AU): A$0.60 Fully Franked Divi + A$1.45/Share Offer From ComfortDelGro

By David Blennerhassett

  • Taxi-Related services operator A2B Australia (A2B AU) has completed a large property sale and subsequently entered into a Scheme with Singapore’s ComfortDelGro Corp (CD SP).
  • The property sale enabled a $0.60/share fully franked dividend. Separately, and in addition, ComfortDelGro is offering A$1.45/share. Or A$2.05/share all-in. Before franking credits, for those who can take advantage. 
  • The special divi ex-date is the 12 January. It is not conditional on the Scheme. Implementation for the Scheme, assuming all approvals are met, is expected mid-April.

Probiotec (PBP AU) Agrees To Pyridam’s Bid

By David Blennerhassett

  • Drugs maker/packager group Probiotec Ltd (PBP AU) has entered into a Scheme with Indonesia’s Pyridam Farma (PYFA IJ).
  • Pyridam is offering Probiotec shareholders A$3.00/share (in cash, or a 19% premium to the undisturbed price). Interim and final  dividends up to A$0.035/share and A$0.04/share, respectively, may be added.
  • It has not been declared final. The Offer has the board’s backing. A Scheme Meeting is expected to be held in May with possible completion in early June 2024.

A2B Australia (A2B AU): ComfortDelGro’s Binding Proposal

By Arun George

  • A2B Australia (A2B AU) has entered a scheme implementation deed with Comfortdelgro Corp (CD SP) at A$1.45 per share. Including the special dividend of A$0.60, the total offer is A$2.05.
  • ACCC approval should be forthcoming as ComfortDelGro is not a significant player in Australia. A2B has several substantial shareholders and a high retail shareholder base, posing a risk.
  • The shares are trading through terms. However, a bump is unlikely as the offer is attractive, and several substantial shareholders have sold down recently.  

Probiotec (PBP AU): Pyridam’s Binding Proposal

By Arun George

  • Probiotec Ltd (PBP AU) has entered a scheme implementation deed with Pyridam Farma (PYFA IJ) at A$3.00 per share, a 19.0% premium to the undisturbed price (21 December).
  • Including potential dividends, the total potential offer price is A$3.075 per share. The scheme requires Probiotec shareholders, Pyridam shareholders, FIRB and Indonesia OJK approvals.
  • The offer is attractive and represents an all-time high. At the last close, the gross spread of the base offer and total potential offer is 3.1% and 5.7%, respectively.  

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Daily Brief Event-Driven: Dai-Ichi Life “Decides” Tender Offer Price and Buyback Price at ¥2 and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • Dai-Ichi Life “Decides” Tender Offer Price and Buyback Price at ¥2,123 and ¥1,491/Share
  • Benefit One (2412 JP): Dai-Ichi Life’s Tender Offer at JPY2,123
  • StubWorld: Hanwha Corp Is “Cheap”
  • KOSDAQ150 Adhoc Index Rebalance: TEMC Added; Short Covering Expected in PoscoDX
  • Buy Pasona As Dai-Ichi Life Amends Benefit One’s Tender Offer & Buyback Price
  • HLB: Approves to Switch Listing from KOSDAQ to KOSPI in an Extraordinary General Meeting
  • SEPI/Telefonica: Acquisition of a 10% Stake


Dai-Ichi Life “Decides” Tender Offer Price and Buyback Price at ¥2,123 and ¥1,491/Share

By Travis Lundy

  • Today, Dai Ichi Life Insurance (8750 JP) came out with a cover letter and an amended Announcement of Intention to Commence a Tender Offer on Benefit One Inc (2412 JP)
  • The cover letter says they have obtained information from Pasona Group (2168 JP) and Benefit One allowing them to calculate a Tender Offer of ¥2,123/share for minorities, and buyback at ¥1,491/share. 
  • Now we wait. Again. Dai-Ichi Life “intends” to start a tender in mid-Jan 2024 (19 Jan likely earliest start possible) but it is not clear timing will come that early.

Benefit One (2412 JP): Dai-Ichi Life’s Tender Offer at JPY2,123

By Arun George

  • Dai Ichi Life Insurance (8750 JP)‘s pre-conditional tender offer for Benefit One Inc (2412 JP) is JPY2,123 per share, a 32.7% premium to M3 Inc (2413 JP)’s offer.
  • The other terms are unchanged. The pre-conditions relate to board recommendation, Pasona Group (2168 JP) support, and the M3 offer not being completed. The tender offer starts in mid-January 2024.
  • While M3 has extended its offer period to 17 January 2024, it will unlikely engage in a bidding war. Expect the Board and Pasona to support the Dai-ichi Life proposal.

StubWorld: Hanwha Corp Is “Cheap”

By David Blennerhassett

  • A double dose of StubWorld this week as Hanwha Corporation (000880 KS) comes up “cheap” on my monitor.
  • Preceding my comments on Hanwha 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%.

KOSDAQ150 Adhoc Index Rebalance: TEMC Added; Short Covering Expected in PoscoDX

By Brian Freitas


Buy Pasona As Dai-Ichi Life Amends Benefit One’s Tender Offer & Buyback Price

By David Blennerhassett

  • Earlier this month, Dai Ichi Life (8750 JP) countered M3 with an unsolicited ¥1,800/share Offer of Equity Value TOB; followed by a Benefit One buyback to mop up Pasona‘s stake.
  • Dai-Ichi has now amended the TOB Price for minorities in Benefit One to ¥2,123/share, and the tax-equivalent price of ¥1,800/share for Pasona would be ¥1,491 on the Buyback Tender, post-squeezeout.
  • That price appears a bit higher for Pasona than expected, and therefore a bit lower for Benefit One minorities. Terms can still be bumped.

HLB: Approves to Switch Listing from KOSDAQ to KOSPI in an Extraordinary General Meeting

By Douglas Kim

  • HLB Inc (028300 KS) announced that it has decided to transfer listing from KOSDAQ exchange to KOSPI exchange.
  • HLB currently has a market cap of 6.5 trillion won and HLB is likely to be included in KOSPI 200 in 2024. 
  • One of the key reasons why the company has a large market cap is due to its Rivoceranib liver cancer drug which is being reviewed by the U.S. FDA. 

SEPI/Telefonica: Acquisition of a 10% Stake

By Jesus Rodriguez Aguilar

  • The Spanish Cabinet has agreed on the acquisition of up to 10% of the share capital of Telefonica SA (TEF SM) (c.€2.2 billion), higher than the 5% initially mentioned.
  • This should move the market as it represents 48 trading days. This also means that the Government will likely authorise the purchase of up to 9.9% by STC.
  • The Kingdom of Spain 10-y benchmark bond yield is 2.9%, while the 24e dividend yield of Telefonica is 8% (source: IBES), therefore the operation makes financial sense.

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Daily Brief Event-Driven: Allkem+Livent=Arcadium : Expected Index Flows and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • Allkem+Livent=Arcadium : Expected Index Flows
  • Arb Trading with Stock Rights in Korea: A Basic Guide Featuring LG Display Offering
  • Toyo Construction (1890) – Everyone Hits Pause
  • Japan Bumpitrage Potential: T&K Toka, IJTT, Taisho, Shidax, Benesse, Tokyo Rakutenchi
  • Nippon Steel/United States Steel Corp: Knock-Out Offer
  • Whispir (WSP AU): Soprano & Pendula Jostle for Control
  • STAR50 Index Rebalance Preview: Four High Impact Changes in March
  • Quiddity Leaderboard ASX Mar 24: Allkem, Newmont, Costa, and Many More


Allkem+Livent=Arcadium : Expected Index Flows

By Travis Lundy

  • Yesterday during the day, Allkem Ltd (AKE AU) shareholders approved the Scheme and Livent (LTHM US) shareholders approved the merger. The deal is done. Allkem last trades 21 Dec.
  • NEWCO starts trading 4 January in the US but the Arcadium Lithium CDIs start trading 22 Dec in Australia. S&P/ASX announced they will replace Allkem in the ASX200.
  • But I have been asked for a breakdown of flows and timing again, so I have put it into a handy table which I hope makes it less confusing.

Arb Trading with Stock Rights in Korea: A Basic Guide Featuring LG Display Offering

By Sanghyun Park

  • Unlike typical Korean stock rights arbitrage, LG Display’s significant equity offering and active stock futures trading anticipate a spread opening, akin to the recent Hanwha Ocean scenario.
  • In contrast to Hanwha Ocean, the absence of major sellers, like KDB, sets this event apart. LG Electronics, the major shareholder with a 37.9% stake, intends to participate.
  • Despite differences from Hanwha Ocean, LG Display’s high retail shareholder presence implies a substantial likelihood of stock rights overhang, even without players like KDB.

Toyo Construction (1890) – Everyone Hits Pause

By Travis Lundy

  • In September, YFO (Yamauchi Family Office) upped its Tender Offer proposal to ¥1,255/share. YFO presented. The Toyo Special Committee met, interviewed, examined, deliberated, then last week rejected YFO’s proposal. 
  • The rejection was a three-parter. First, they rejected YFO for not bringing management/ownership experience. Second, they said the proposal didn’t add enough value. Third, the price was too low.
  • There were no metrics against which to measure anything. And now Toyo has apparently decided to withdraw its Tender Offer Proposal.

Japan Bumpitrage Potential: T&K Toka, IJTT, Taisho, Shidax, Benesse, Tokyo Rakutenchi

By Arun George

  • Japan’s merger arb is facing an unusual situation: six merger arb situations (>US$100 million market cap) where the shares have consistently traded through terms.
  • We evaluate the bumpitrage potential of these six Japanese merger arb situations on qualitative and quantitative metrics.
  • Based on our analysis, the ranking as measured by the highest bumpitrage potential in descending order are T&K Toka, IJTT, Taisho, Shidax, Benesse and Tokyo Rakutenchi.

Nippon Steel/United States Steel Corp: Knock-Out Offer

By Jesus Rodriguez Aguilar

  • Nippon Steel Corporation (5401 JP) and United States Steel (X US) have agreed an all-cash $55.00/share offer, 142% premium to where X traded before Cliff’s approach, a very generous 7x EV/24e EBITDA.
  • A determined buyer seeks market share in the lucrative US market, with no meaningful synergies expected and willingness to keep all US Steel jobs and (greener) growth projects.
  • Although unions and some lawmakers are voicing concerns, CFIUS shouldn’t pose a big hurdle. Spread is 12.04%/17.93% (gross/annualised, assuming late settlement by end of Q3 2024). Long.

Whispir (WSP AU): Soprano & Pendula Jostle for Control

By David Blennerhassett

  • On the 6 November, cloud communication outfit Whispir (WSP AU)  announced a A$0.46/share unconditional Offer, in cash, from mobile messaging software play Soprano Design.
  • The Offer price was a 92% premium to Whispir’s recent private placement, and a 60% premium to the undisturbed price. Whispir rejected the Offer.
  • Pendula subsequently emerged with a A$0.57/share NBIO. Soprano “countered” with A$0.52/share. Pendula upped its indicative Offer to A$0.60/share. An independent expert’s fair value is between A$0.486/share-A$0.565/share.

STAR50 Index Rebalance Preview: Four High Impact Changes in March

By Brian Freitas

  • The review period for the March rebalance ends 31 January. We expect the changes to be announced 23 February with the implementation taking place after the close on 8 March.
  • We expect the index committee to continue using a 6-month minimum listing history resulting in four changes to the index.
  • One way turnover is estimated at 3.3% resulting in a one-way trade of CNY 4,717m. The impact on the deletions will be much larger than that on the inclusions.

Quiddity Leaderboard ASX Mar 24: Allkem, Newmont, Costa, and Many More

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 2024 index review.
  • I expect one change for ASX 20, one change for ASX 100, and four changes for ASX 200 during the March 2024 index rebal event.
  • Separately, there could also be one intra-review change for ASX 200 in February 2024.

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Daily Brief Event-Driven: JSR (4185) – Deal Approval Unexpectedly Delayed and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • JSR (4185) – Deal Approval Unexpectedly Delayed, As Expected
  • Pan Ocean Considering on a Rights Offering Capital Raise of Nearly 3 Trillion Won for the HMM Deal
  • Gina Joins SQM In Bid For Azure (AZS AU)
  • SET50 Index Rebalance: KCE Replaces TIDLOR
  • Azure Minerals (AZS AU): SQM/Hancock Team up for a New Offer
  • Kurabo (3106) – Bigly Buyback And Share Cancellation for A Valueful Value Trap With Hidden Value
  • Quiddity Leaderboard NIFTY Mar 24: Bharat Electronics Trade Successful; Change Hedge and Let It Run
  • Lithium Power (LPI AU): Scheme Vote on 23 January
  • StubWorld: Hankook’s Bothersome Brothers
  • AMFI Stock Reclassification Preview (Dec 2023): MidCap to LargeCap Migrations Outperforming


JSR (4185) – Deal Approval Unexpectedly Delayed, As Expected

By Travis Lundy

  • Today after the close, JSR Corp (4185 JP) announced that the expected “end-December” commencement of JIC’s Tender Offer to take the company private would be delayed. 
  • This was somewhat expected to widely expected based on initial FUD which then gave way to “specialised reporting” a couple of weeks ago which indicated as much.
  • Here I look at potential implications, spreads, and risks. And it still looks like one has to let it run (and buy a dip).

Pan Ocean Considering on a Rights Offering Capital Raise of Nearly 3 Trillion Won for the HMM Deal

By Douglas Kim

  • A consortium led by the Harim Group and JKL Partners has been chosen as the preferred bidder to acquire a 57.9% stake in HMM.
  • Korea Development Bank (KDB) and the Korea Ocean Business Corporation (KOBC) are the main creditors of HMM, which is the largest shipping company in Korea.
  • Pan Ocean is expected to complete a rights offering of nearly 3 trillion won which is 136% of its current market cap. This is excessive and negative for Pan Ocean.

Gina Joins SQM In Bid For Azure (AZS AU)

By David Blennerhassett

  • This makes life a lot simpler. Gina Rinehart’s Hancock Prospecting will now team up with Chile’s SQM to take control of lithium play Azure Minerals (AZS AU).
  • In a binding Offer, by way of a Scheme, the joint bidders (collectively holding ~37.79%) are offering A$3.70/share, a 5.1% bump in terms to SQM’s prior Scheme Offer. 
  • An off-market takeover at A$3.65/share unfolds IF this Scheme were to fail. If both fail/lapse,  SQM will, “in certain circumstances”, be required to proceed with its off-market transaction of A$3.50/share.

SET50 Index Rebalance: KCE Replaces TIDLOR

By Brian Freitas


Azure Minerals (AZS AU): SQM/Hancock Team up for a New Offer

By Arun George

  • Azure Minerals (AZS AU) has entered a new transaction implementation deed with Sociedad Quimica y Minera de Chile (SQM US) and Hancock at A$3.70, a 51.6% premium to the undisturbed price.
  • The emergence of Hancock and Mineral Resources (MIN AU) as substantial shareholders necessitated the new offer. The off-market takeover offer is A$3.65 per share if the scheme fails. 
  • The scheme’s completion hinges on MinRes’ acceptance. MinRes could potentially block the scheme but has a history of selling into Hancock offers.

Kurabo (3106) – Bigly Buyback And Share Cancellation for A Valueful Value Trap With Hidden Value

By Travis Lundy

  • Kurabo announced a bigly buyback on Tuesday. At last price it is equivalent to 8+% of shares out. Most likely to target buybacks from cross-holders. 
  • The company is not cash-rich, but it is financial asset and real estate-rich. And it trades at cheap multiples without even thinking about those assets (themselves worth the market cap).
  • The TSE’s “PBR1 OR BUST” movement combined with starting low valuation, high payout, excess assets, mean this value trap has room to move. 

Quiddity Leaderboard NIFTY Mar 24: Bharat Electronics Trade Successful; Change Hedge and Let It Run

By Janaghan Jeyakumar, CFA

  • NIFTY 50 represents the 50 largest stocks listed in the National Stock Exchange (NSE) of India and the NIFTY Next 50 index tracks the next 50 largest names.
  • In this insight, we take a look at the names leading the race to become ADDs/DELs for the NIFTY 50 and NIFTY Next 50 indices in the March 2024 rebalance.
  • There could be multiple changes for NIFTY 50 and separately, there could be five changes for NIFTY Next 50. The NIFTY 50 changes could have high impact.

Lithium Power (LPI AU): Scheme Vote on 23 January

By Arun George

  • The Lithium Power International (LPI AU) IE considers Codelco’s A$0.57 offer fair and reasonable as it is above the midpoint of its A$0.30-0.68 per share valuation range. 
  • The scheme is conditional on FIRB approval, which should be forthcoming as LPI’s assets are outside Australia in Chile.
  • Irrevocables represent 32.05% of outstanding shares. At the last close and for the 16 February payment, the gross/annualised spread was 3.6%/26.3%.

StubWorld: Hankook’s Bothersome Brothers

By David Blennerhassett

  • The Cho brothers are currently sparring over control of Hankook & Company (000240 KS), and in turn, its 30.7% stake in Hankook Tire (161390 KS).
  • After the honorary chairman of Hankook backed the younger son (& chairman of Hankook), PE-outfit MBK, aligned with the elder son, bumped its public tender Offer by 20% to ₩24,000/share.
  • Hankook is currently trading 27.3% adrift of the revised terms. That pretty much sums up the situation. The public tender closes on December 25. However, December 23-25 are holidays.

AMFI Stock Reclassification Preview (Dec 2023): MidCap to LargeCap Migrations Outperforming

By Brian Freitas

  • We see 8 stocks moving from MidCap to LargeCap, 8 stocks moving from LargeCap to MidCap, 11 stocks from SmallCap to MidCap, and 14 stocks from MidCap to SmallCap.
  • Some stocks were added to global indices last month while some could be added in February. There are potential index implications for the NIFTY Index and Nifty Next 50 Index too.
  • The upward migrations have continued to outperform the downward migrations. The largest recent outperformance has come from stocks expected to move from the Mid Cap to the Large Cap segment.

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Daily Brief Event-Driven: Allkem/Livent Merger Vote Tomorrow: Will Vote Get Past? and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • Allkem/Livent Merger Vote Tomorrow: Will Vote Get Past?
  • Link Admin (LNK AU): Mitsubishi UFJ’s Bittersweet Scheme
  • LG Display: Announces a Rights Offering Capital Raise of 1.36 Trillion Won
  • Link Admin (LNK AU): MUFG’s Underwhelming Binding Offer
  • Adbri (ABC AU): CRH and Barro’s Non-Binding A$3.20 Offer
  • Pacific Smiles (PSQ AU) Frowns On Genesis’ Offer
  • Comprehensive List: 359 Companies on KOSPI & KOSDAQ Deferring Yearend Dividend Record Dates
  • EQD | NIFTY WEEKLY Pullback: Where to Re-Enter LONG?
  • Taihan Electric Wire: Rights Offering of 50% of Outstanding Shares


Allkem/Livent Merger Vote Tomorrow: Will Vote Get Past?

By Travis Lundy

  • The vote is tomorrow. It is slightly contested. Shareholder proxies have recommended approving. Some others say Allkem is going too cheap. 
  • It probably should get done because of scale benefits, and if it breaks, it might be good for Allkem, which is “good risk arb risk”
  • But the trade here is some combination of lithium rebound and index event, with index impact details here.

Link Admin (LNK AU): Mitsubishi UFJ’s Bittersweet Scheme

By David Blennerhassett

  • Link Administration (LNK AU), the largest provider of services in Australia’s superannuation administration industry, has entered into a Scheme with Mitsubishi UFJ Financial Group.
  • MUFJ is offering long-suffering Link shareholders A$2.10/share (in cash) plus a A$0.16/share dividend (25% franked), or a 32.9% premium, all-in, to the undisturbed price. It has not been declared final. 
  • The Offer has the board’s backing. A Scheme Meeting is expected to be held in May with possible completion in June 2024. 

LG Display: Announces a Rights Offering Capital Raise of 1.36 Trillion Won

By Douglas Kim

  • LG Display announced today that it will conduct a rights offering capital raise worth 1.36 trillion won. 
  • The rights offering capital raise involves 142 million shares, which represent 39.7% of its existing outstanding shares. 
  • We believe this rights offering will have a negative impact on LG Display’s share price as it will significantly dilute existing shareholders. 

Link Admin (LNK AU): MUFG’s Underwhelming Binding Offer

By Arun George

  • Link Administration (LNK AU) has entered a SID with Mitsubishi UFJ Financial (MUFG) (8306 JP) at A$2.26 (A$2.10 scheme consideration + A$0.16 dividend), a 32.9% premium to the undisturbed price.
  • The presence of several substantial shareholders, lack of irrevocables, a light offer, recent derisking of the business and a long-dated offer pose a challenge for the scheme to get up. 
  • MUFG’s offer could spark a rival offer, but Link’s long-suffering shareholders have endured a history of failed bids. At the last close, the risk/reward is unfavourable.

Adbri (ABC AU): CRH and Barro’s Non-Binding A$3.20 Offer

By Arun George

  • Adbri (ABC AU) has disclosed a non-binding proposal from CRH (CRH LN) and Barro at A$3.20 per share, a 41.0% premium to the undisturbed price of A$2.27 (13 December).
  • The offer is the best and final offer. The Board has granted an exclusive due diligence period, which ends on 28 February 2024. 
  • The Board intends to recommend a binding proposal. The offer requires FIRB approval (ACCC approval is not mentioned). The offer is attractive vs. peer multiples and historical ranges.  

Pacific Smiles (PSQ AU) Frowns On Genesis’ Offer

By David Blennerhassett

  • Pacific Smiles (PSQ AU), an operator of dental centers, has announced – and immediately rejected – a non-binding proposal from Genesis Capital Manager.
  • Genesis, holder of 18.75% of shares out, has offered A$1.40/share, by way of a Scheme. That’s a less-than-inspiring 17.1% premium to last close. 
  • PSQ calls the Offer “opportunistically timed”. That has merit, after the share price recently touched a multi-year low.  Separately, PSQ is seeking a new CEO after Mckenzie resigned in August.

Comprehensive List: 359 Companies on KOSPI & KOSDAQ Deferring Yearend Dividend Record Dates

By Sanghyun Park

  • The data is crucial for year-end dividend arbitrage. We can strategically target Single-stock futures’ spread basis widening due to information timeliness disparities, focusing on companies with high dividend yields.
  • Furthermore, it offers valuable insights into assessing the December-March spread levels, potentially leading to a rollover distortion in KOSPI 200 futures’ calendar spread trading.
  • Postponed yearend dividend record dates to March may clash with first-quarter dividends, offering a new trading opportunity. this unique situation could significantly impact spot and futures prices.

EQD | NIFTY WEEKLY Pullback: Where to Re-Enter LONG?

By Nico Rosti

  • 7 weeks up in a row and very overbought, the NIFTY Index could pullback from its highs this week and/or the next.
  • A pullback to the 21008-20542 support area could be an occasion to enter LONG, profitable if the index rebounds from there and continues to rally into January.
  • The potential pullback appears to be a short-lived retracement down, based on MRM pattern readings.

Taihan Electric Wire: Rights Offering of 50% of Outstanding Shares

By Douglas Kim

  • Last week, Taihan Electric Wire announced a rights offering of 50% of its outstanding shares.  The company is expected to raise 526 billion won. 
  • Taihan Electric Wire is expected to use the rights offering proceeds to mostly expand its submarine cable production.
  • With the share price falling 21% since the announcement of the rights offering last week, Taihan Electric Wire looks more attractive.

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Daily Brief Event-Driven: A/H Premium Tracker (To 15 Dec 23): Time To Go Long Hs Vs As. and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • A/H Premium Tracker (To 15 Dec 23): Time To Go Long Hs Vs As.
  • Tomony Holdings (8600 JP) – Regional Bank NEW SHARE Issue – Not What You Want To See, But Buy Anyway
  • Merger Arb Mondays (18 Dec) – Shinko Electric, Benefit One, Toyo, CPMC, Vinda, Costa, Volpara
  • Yuanta/​P-Shares Taiwan Div+ ETF: Day 1 Flows & Stock Moves
  • Hankook & Company (000240 KS): MBK Raises Partial Offer to KRW24,000
  • HK Connect SOUTHBOUND Flows (To 15Dec23); CNOOC/Telecom/Mobile All Now To The Buy Side, Tencent NOT
  • Hankook & Co Tender: Clues to Gauge Cancellation Risk Obtained Through Local Channels So Far
  • Mainland Connect NORTHBOUND Flows (To 15 Dec 23): Mindray Consistently Bought, Midea Sold
  • Adbri (ABC AU) Warms To CRH/Barro’s Offer
  • Liquid Universe of European Ordinary and Preferred Shares: December‘23 Report


A/H Premium Tracker (To 15 Dec 23): Time To Go Long Hs Vs As.

By Travis Lundy

  • The New and Better (5mos old) A-H Premium Tracker has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning/volatility in pairs over time, etc.
  • SOUTHBOUND and NORTHBOUND flows were both sells, respectively, but liquid Hs with H/A pairs OUT-perform As on average by 100+bp. Liquidation by overseas investors feels finished. 
  • Time to go long Hs vs As for the new year at 52wk wide discounts. 3 Short H/A pairs now switched to long. 3 new pairs long this week. 

Tomony Holdings (8600 JP) – Regional Bank NEW SHARE Issue – Not What You Want To See, But Buy Anyway

By Travis Lundy

  • On 5 December, Tomony Holdings (8600 JP) – a holding company for two regional banks based in Tokushima Prefecture and Kagawa Prefecture – announced (gasp!) a NEW SHARE OFFERING. 
  • It offered 28mm shares + 4.2mm greenshoe – a share count increase of 20%. At 0.27x book. This IS unusual. Especially when banks are being asked to produce better ROC. 
  • The deal priced at ¥366. We’re there now. Banks have been sold. It is worth looking at where we are and what could happen next. It’s cheap.


Yuanta/​P-Shares Taiwan Div+ ETF: Day 1 Flows & Stock Moves

By Brian Freitas

  • The Yuanta/P-shares Dividend Plus ETF (0056 TT) started to rebalance its holdings on Friday and will continue to do so for the next 4 trading days.
  • Stocks with buy flows dropped 0.51% on average on Friday while the stocks with sell flows dropped 0.92%. On a flow weighted basis, the numbers were -0.21% vs -0.75%.
  • Since the start of November, the adds have outperformed the deletes and the TWSE INDEX. There has been significant outperformance in just the last week.

Hankook & Company (000240 KS): MBK Raises Partial Offer to KRW24,000

By Arun George

  • MBK Partners has increased its Hankook & Company (000240 KS) partial tender offer to KRW24,000 per share, 20.0% and 51.4% above its previous offer and the last close, respectively.
  • While the offer is attractive, we estimate that the minimum acceptance condition of 19.3 million shares (20.35% of outstanding shares) requires an 84.3% minority acceptance rate. 
  • The minority acceptance rate is challenging unless MBK can secure a ruling preventing share purchases from Cho Yang-rai, who disclosed a 2.72% stake on 14 December and opposes the tender. 

HK Connect SOUTHBOUND Flows (To 15Dec23); CNOOC/Telecom/Mobile All Now To The Buy Side, Tencent NOT

By Travis Lundy

  • SOUTHBOUND flows showing reversion tendencies continues for a fourth week. Hs rebound vs their As on the week – especially the liquid ones.
  • SOUTHBOUND saw HK$9.9bn of OUTflows on the week to 15 Dec, ALL of which was net sales of Tracker Fund of Hong Kong (2800 HK) and Tencent (700 HK)
  • High-Div SOEs again saw action. This time with both CNOOC Ltd (883 HK) and China Telecom (728 HK) seeing net buying as a percentage of volume. 

Hankook & Co Tender: Clues to Gauge Cancellation Risk Obtained Through Local Channels So Far

By Sanghyun Park

  • Critical now is estimating MBK’s achievable volume in the tender offer, a key indicator for assessing cancellation risk. Evidence suggests few allies for Cho Hyun-beom, prompting MBK’s strategic persistence.
  • MBK can secure 23.58%, but NPS’s involvement is pivotal. If neutral, MBK aims for 19.55%, below the minimum. MBK proceeds with a revised offering price, anticipating NPS participation.
  • Though the FSS investigation may favor MBK, a successful tender offer depends on achieving 87% participation. The higher-than-expected likelihood of success hints at a strong upward stock adjustment from Monday.

Mainland Connect NORTHBOUND Flows (To 15 Dec 23): Mindray Consistently Bought, Midea Sold

By Travis Lundy

  • The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts to play with.
  • Last week saw NORTHBOUND net sell RMB 18.6bn of A-shares on slightly lighter activity. Friday saw large NORTHBOUND net buys early in the day but ended a net sell.
  • Looking at the change in the weekly position charts over the last year is striking (easiest in the Sectors table to start). Still. 

Adbri (ABC AU) Warms To CRH/Barro’s Offer

By David Blennerhassett

  • Construction play Adbri (ABC AU) has entered into a process and exclusivity deed with CRH (CRH US) and 42.7%-shareholder Raymond Barro (Chairman) in order to progress to a firm transaction.
  • CRH/Barro’s non-binding indicative proposal of $3.20/share (in cash), by way of a Scheme, is a 41% premium to last close. The proposal is best & final. 
  • Subject to DD being carried out by CRH, this looks done. 

Liquid Universe of European Ordinary and Preferred Shares: December‘23 Report

By Jesus Rodriguez Aguilar

  • Since mid-November, spreads have generally widened across our European liquid universe of ordinary and preferred shares (9 have tightened, 10 widened).
  • Recommended trades long preferred / short ordinary shares: Media-for-Europe, Sixt, Volkswagen (still the most interesting situation).
  • Recommended trades long ordinary / short preferred shares: Fuchs, Henkel, SSAB Svenska Stal.

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Daily Brief Event-Driven: (Mostly) Asia-Pac Weekly Risk Arb Wrap: Sigma Health and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • (Mostly) Asia-Pac Weekly Risk Arb Wrap: Sigma Health, Vinda, Outsourcing, Allkem, Costa, Hollysys
  • Index Rebalance & ETF Flow Recap: HSTECH, SIG/CWG, KQ150, REPT BATTERO
  • EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades-And Pivot!
  • Last Week in Event SPACE: Benefit One, CPMC, Samsung C&T, Sands China, Shinko Electric, Hankook & Co
  • Weekly Deals Digest (17 Dec) – Benefit One, Shinko Electric, Toyo, CPMC, Vinda, Hollysys, Rept


(Mostly) Asia-Pac Weekly Risk Arb Wrap: Sigma Health, Vinda, Outsourcing, Allkem, Costa, Hollysys

By David Blennerhassett


Index Rebalance & ETF Flow Recap: HSTECH, SIG/CWG, KQ150, REPT BATTERO

By Brian Freitas

  • It was a busy week with rebalance implementations at the close of trading on Thursday in Korea and then across the region on Friday.
  • The SET 50 Index changes should be announced this week and the Yuanta TW Div+ ETF will continue to implement the changes till Thursday.
  • There were inflows to China ETFs during the week while there were big outflows from Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) ETFs.

EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades-And Pivot!

By Simon Harris

  • Weekly summary of vol changes and moves across Global Markets
  • Analysing ATM volatility and skew changes over the last 5 days
  • We suggest a few trades to take advantage of the implied vol surfaces

Last Week in Event SPACE: Benefit One, CPMC, Samsung C&T, Sands China, Shinko Electric, Hankook & Co

By David Blennerhassett


Weekly Deals Digest (17 Dec) – Benefit One, Shinko Electric, Toyo, CPMC, Vinda, Hollysys, Rept

By Arun George


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Daily Brief Event-Driven: StubWorld: LVS To Up Stake In Sands. Melco Back To Square One and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • StubWorld: LVS To Up Stake In Sands. Melco Back To Square One
  • Investigating Float Rate Issues of Ecopro Materials & Doosan Robotics for Global Index Feb Review
  • Vinda International (3331 HK): Pre-Conditional Voluntary Offer at HK$23.50
  • MBK Partners Raises Tender Offer Price of Hankook and Co to 24,000 Won


StubWorld: LVS To Up Stake In Sands. Melco Back To Square One

By David Blennerhassett


Investigating Float Rate Issues of Ecopro Materials & Doosan Robotics for Global Index Feb Review

By Sanghyun Park

  • With recent surges in EcoPro Materials and Doosan Robotics, it’s crucial for their potential inclusion in the February Global Index review. No other names approach the threshold.
  • Depending on classification, Ecopro Materials may get a free-float rate from 15% to 20%, while Doosan Robotics may receive a rate from 20% to 30%.
  • With max free-float rates (20% and 30%), both meet Cutoffs. At minimum rates, Doosan Robotics needs over a 20% increase, while Ecopro Materials slightly exceeds Cutoffs.

Vinda International (3331 HK): Pre-Conditional Voluntary Offer at HK$23.50

By Arun George

  • Vinda International (3331 HK) has announced a pre-conditional voluntary offer from Sukanto Tanoto at HK$23.50 per scheme share, a 7.8% premium to the undisturbed price (26 April). 
  • The pre-condition relates to China SAMR and Japan Fair Trade Commission approval. The offer is conditional on the offeror and concert parties representing more than 50% of voting rights.
  • Irrevocables ensure the satisfaction of the minimum acceptance condition but also rule out a competing proposal. The timing of China SAMR approval is the key risk. 

MBK Partners Raises Tender Offer Price of Hankook and Co to 24,000 Won

By Douglas Kim

  • After market close on 15 December, MBK Partners raised the tender offer price of Hankook & Company by 20% to 24,000 won, which is now 51.4% higher than current price. 
  • With Cho Yang-Rae’s recent acquisition of shares, Cho Hyun-beom, Cho Yang-rae, and related parties now own about 45.6% of Hankook & Co, up from 42.9% previously. 
  • MBK Partners has requested an official investigation by the FSS, claiming that Cho Yang-rae and HY have violated the Capital Markets Act by recently purchasing shares of Hankook & Co.

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Daily Brief Event-Driven: Shinko Electric (6967) Takeover:  Initial Break/Gap Risk Analysis and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • Shinko Electric (6967) Takeover:  Initial Break/Gap Risk Analysis
  • Whitebox Goes Activist on Samsung C&T
  • Vinda (3331 HK): Tanoto’s Firm Offer
  • Quiddity Leaderboard STAR 50 Mar 24: Four High-Impact Changes Likely; Some Interesting Trade Ideas
  • Toyo Construction (1890 JP): Déjà Vu as YFO’s Proposal Rejected
  • Volpara Health/Lunit: Bosom Buddies
  • Volpara Health (VHT AU): Lunit’s Binding A$1.15 Offer
  • EQD | ULTRAOVERBOUGHT APAC Markets, SHORT Targets


Shinko Electric (6967) Takeover:  Initial Break/Gap Risk Analysis

By Travis Lundy

  • The JIC Deal for Shinko Electric Industries (6967 JP) has been announced and is, as expected, trading wide. 
  • There is FUD. There are Flows. Just like JSR (4185). Some of that FUD can be explained by “gap risk” on deal break…. or can it? We look at risks.
  • There’s more positioning risk than fundamental risk at this point. And the FUD and Flows have specific timing in this case which makes thing different than JSR. Worth thinking about.

Whitebox Goes Activist on Samsung C&T

By Douglas Kim

  • On 14 December, it was reported that US based Whitebox Advisors has started an activist campaign on Samsung C&T (028260 KS).
  • Whitebox estimates that Samsung C&T’s stock price is about 68% undervalued compared to its NAV.
  • In addition to Whitebox, there are two other foreign investors including Palliser Capital and City of London Investment Management that have requested Samsung C&T to improve corporate governance.

Vinda (3331 HK): Tanoto’s Firm Offer

By David Blennerhassett

  • Back on the 27 April, personal hygiene play Vinda International (3331 HK) announced its controlling shareholder Essity (ESSITYB SS) would commence a strategic review of its 51.59% ownership.
  • That spurred, allegedly, a variety of suitors including Brazil’s Suzano, the world’s largest hardwood pulp producer, Bain Capital, CVC Capital, DCP Capital, and Indonesia’s Tanoto family.
  • And the Tanoto’s have now emerged with a HK$23.50 pre-conditional Offer. The key risk is PRC regulatory approval . Elsewhere, this is a done deal. 

Quiddity Leaderboard STAR 50 Mar 24: Four High-Impact Changes Likely; Some Interesting Trade Ideas

By Janaghan Jeyakumar, CFA

  • STAR 50 Index is a tech-focused, blue-chip index in Mainland China which tracks the top 50 largest and most liquid names in the STAR market of the Shanghai Stock Exchange.
  • In this insight, we take a look at our expectations for potential ADDs and DELs for the STAR 50 index during the March 2024 index rebal event.
  • There could be up to four index changes. Some of these are high-conviction changes and some are low-conviction changes.

Toyo Construction (1890 JP): Déjà Vu as YFO’s Proposal Rejected

By Arun George

  • The Toyo Construction (1890 JP) Board has opposed YFO’s potential tender offer price of JPY1,255 per share but has kept the door open for an improved offer. 
  • YFO is running out of options as a YFO candidate-heavy special committee opposed its proposal, and the share price is trading through terms. 
  • YFO has three options: a hostile offer at an unchanged price, an improved price, or exit its position. Each option has issues suggesting a lack of short-term share price support.  

Volpara Health/Lunit: Bosom Buddies

By David Blennerhassett

  • Volpara Health  (VHT AU), which makes software enabling the early detection of breast cancer, has announced it has entered into a Scheme Implementation Deed with South Korea’s Lunit (328130 KS).
  • Lunit is offering Volpara shareholders A$1.15/share, in cash, a 47.4% premium to last close. Cornerstone investors with 25.92% of shares out are supportive. As is Volpara’s board.
  • The Scheme Meeting is expected to be held in 2Q24. The transaction requires NZ’s OIO approval.

Volpara Health (VHT AU): Lunit’s Binding A$1.15 Offer

By Arun George

  • Volpara Health Technologies (VHT AU) has entered a scheme implementation deed with Lunit (328130 KS) at A$1.15 per share, a 48.4% premium to the undisturbed price of A$0.775 (13 December).
  • The offer is subject to several conditions, such as shareholder and OIO approval. Irrevocables and directors represent 33.30% of outstanding shares. 
  • Barring a competing offer, this is a done deal, as the offer is attractive. At the last close and for the end of May payment, the gross/annualised spread is 5.0%/11.6%.

EQD | ULTRAOVERBOUGHT APAC Markets, SHORT Targets

By Nico Rosti

  • 3 main APAC markets (Nifty, Kospi 200 and ASX200) are very OVERBOUGHT.
  • A WEEKLY pullback (1 week down) is expected this coming week, or the next.
  • The pullback should be short-lived and last just 1 week, then the rally should resume.

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