Event-Driven

On Friday, Tsuruha Holdings (3391 JP), Welcia Holdings (3141 JP), and Aeon Co Ltd (8267 JP) announced the Tsuruha/Welcia merger and Partial Tender to get Aeon to 50+% of NEWCO.
The scrip ratio short-changes Tsuruha shareholders. The subsequent partial offer to raise Aeon’s stake above 50% is low too. 9.7% shareholder Orbis is already out with a complaint.
But… all is not lost. There are some interesting angles here to complain.

What if China ADRs Are Delisted from US Exchanges?

We see 281 Chinese companies listed on U.S Stock Exchanges with a total market cap of US$869bn. 32 of these companies are listed on the HKEX (388 HK).
If the rumours of Chinese stocks being delisted from U.S. Exchanges gathers steam, we could see a wave of secondary listings in Hong Kong.
PDD Holdings, Full Truck Alliance, Vipshop Holdings, TAL Education and ZEEKR are the largest China ADRs with no HK listing and could come under pressure.

“Tiny Win for Guess The Ratio” Aeon (8267) Pays a SMALL Premium for Aeon Mall (8905)

In an announcement after the close Friday 11 April, Aeon Co Ltd (8267 JP) and AEON Mall (8905 JP) announced their merger ratio, and timing.
The ratio is 0.65 to 1.0, meaning Aeon Mall shareholders don’t get a lot of credit for their real estate. The timing is short-dated. The AGM is end-May. Merger July1.
This may be a tad light, but it is a done deal. Active shareholder base is almost all retail and crossholders+dom passive gets Aeon to 70%.

Suzuki Motor (7269 JP) Placement: Likely to Price Today; 7-8% Underperformance Vs Peers/TOPIX

Tokio Marine & Nichido Fire Insurance and Sompo Japan Insurance are looking to raise US$1.2bn by offloading their entire stakes in Suzuki Motor by way of a secondary offering.
Suzuki Motor (7269 JP) stock is flat since the announcement of the placement but has underperformed its peers and the TSE Tokyo Price Index TOPIX (TPX INDEX).
With the placement being less than 5% of the number of shares outstanding, there is unlikely to be any immediate passive inflow which could pressure the stock.

Aeon Mall (8905 JP): Aeon (8267 JP)’s Share Exchange Ratio Is Set

AEON Mall (8905 JP) announced a share exchange offer by Aeon Co Ltd (8267 JP) at 0.65 Aeon shares per Aeon Mall share, a 30.9% premium to the undisturbed price.
The share exchange ratio is reasonable compared to historical price ratios and IFA valuation ranges. The implied offer multiple is attractive compared to peer multiples.
Aeon’s 58.16% shareholding ensures that Aeon Mall’s vote on 22 May is low-risk. The share exchange’s effective date is 1 July.

HK Connect SOUTHBOUND Flows (To 11 Apr 2025); Record Net Buying

Q1 saw record quarterly inflows by SOUTHBOUND investors at HK$435bn, beating the previous record of Q1 2021 by more than HK$100bn. The first two weeks in April were HK$145bn.
The first two weeks in April were HK$145bn as what appeared to be national team, or equally patriotic buyers, showed up droves to buy financials, energy, telecoms, and big techs.
Included is a summary of important China Stocks-relevant news as I saw it this week, but frankly, the only thing that matters is the back and forth by the Donald.

A/H Premium Tracker (To 11 Apr 2025): Sharp AH Premia Widening

AH Premia bounce higher. Spread curve torsion is mild given how much AH is widening again. Two weeks in a row we see a big net move.
For a month I thought warning signs were flashing and spreads could widen. They are still widening despite really big net SOUTHBOUND buying.
I expected the right thing to do was hunker down and be flat H/A risk. Hs underperformed As by 3.7% over two weeks so it’s tough to be flat enough.

Merger Arb Mondays (14 Apr) – ESR, Fengxiang, Vesync, Goldlion, Shibaura, Tsuruha/Welcia, Aeon Mall

We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
Highest spreads: ENN Energy (2688 HK), Insignia Financial (IFL AU), Oneconnect Financial Technology (6638 HK), Shandong Fengxiang (9977 HK), Seven & I Holdings (3382 JP), Smart Share Global (EM US).
Lowest spreads: Shibaura Electronics (6957 JP), Sinarmas Land (SML SP), Millennium & Copthorne Hotels Nz (MCK NZ), Makino Milling Machine Co (6135 JP), Spartan Resources (SPR AU).

Fengxiang (9977 HK): PAG’s Pre-Con Offer

When Shandong Fengxiang (9977 HK) was suspended last month due to the Takeovers Code, I expected PAG to launch an Offer by way of a Merger by Absorption at ~HK$2.00.
And that is exactly what unfolded. The price, which is a 33.33% premium to last close is final. 42.35% of independent H-shareholders are supportive. A scrip alternative is afforded.
PAG was permitted to take control of Fengxiang, via the domestic shares, late 2022. There will be no regulatory roadblock as PAG now seeks to privatise Fengxiang.

Strategic Acquisitions, Merger Developments, and Takeover Bids: Key Updates

Lensar (LNSR) is being acquired by Alcon for $14/share plus a CVR up to $2.75/share, with closing expected in H2 2024.
OCI N.V. announced a $1bn extraordinary cash distribution, with shareholders choosing payment currency, ex-dividend date April 15.
Kronos Bio (KRON) terminated a lease for $1.5m, with potential net cash outcome between ~$1 and $1.30/share.

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Apr 13

Daily Brief Event-Driven: Tsuruha (3391 JP): Welcia (3141 JP) Share Exchange and Aeon (8267 JP) Partial Offer Unattractive and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Tsuruha (3391 JP): Welcia (3141 JP) Share Exchange and Aeon (8267 JP) Partial Offer Unattractive
Fengxiang (9977 HK): PAG’s Preconditional Privatisation Offer at HK$2.00
(Mostly) Asia-Pac M&A: Abacus Storage, Gold Road, Mayne Pharma, Canvest, ESR, Shibaura Electronics
Last Week in Event SPACE: James Hardie/Azek, China’s Maritime/Shipping Sectors, CK Hutch, HKBN

Tsuruha (3391 JP): Welcia (3141 JP) Share Exchange and Aeon (8267 JP) Partial Offer Unattractive

Tsuruha Holdings (3391 JP) and Welcia Holdings (3141 JP) announced a merger through a share exchange followed by a partial tender offer by Aeon for a 50.90% stake of the merged entity.
The share exchange terms favour Welcia over Tsuruha shareholders. The Tsuruha shareholder vote is high risk as Orbis, the second-largest shareholder, intends to vote NO.
Aeon Co Ltd (8267 JP)’s follow-up partial offer for Tsuruha is unattractive compared to its previous offer for the Oasis stake, peer multiples and premium to the undisturbed price.

Fengxiang (9977 HK): PAG’s Preconditional Privatisation Offer at HK$2.00

Shandong Fengxiang (9977 HK) has disclosed a preconditional privatisation offer from PAG, the controlling shareholder, at HK$2.00 per H share, a 33.3% premium to the undisturbed price.
The precondition relates to regulatory approvals. The key conditions for the privatisation will be approval by at least 75% independent H Shareholders (<10% of all independent H Shareholders rejection).
The shareholders with blocking stakes which have not provided irrevocables will likely be supportive as the offer is reasonable and there is a potential scrip alternative.

(Mostly) Asia-Pac M&A: Abacus Storage, Gold Road, Mayne Pharma, Canvest, ESR, Shibaura Electronics

I tally 52 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma.
One new deal discussed this week: Public Storage (PSA US)‘s NBIO, by way of a Scheme, for Abacus Storage King (ASK AU).
Key updates/news took place on Gold Road Resources (GOR AU), Mayne Pharma (MYX AU), Canvest Environmental (1381 HK), ESR Group (1821 HK), Goldlion Holdings (533 HK), Shibaura Electronics (6957 JP).

Last Week in Event SPACE: James Hardie/Azek, China’s Maritime/Shipping Sectors, CK Hutch, HKBN

James Hardie (JHX AU)‘s merger with Azek (AZEK US) isn’t inherently a “bad” deal; but arguably risky and expensive. Yet JHX is down a massive 23% on the news.
The Biden Administration’s USTR Report (bad data/analytics) was a disaster. But true to form, if it allows the USG to stomp on China, Trump is going to take it.
The irony is that CKH (1 HK)‘s Panama-port sale was probably prompted, at least in part, by a desire to get out of a situation which was becoming increasingly political.

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Apr 12

Daily Brief Event-Driven: James Hardie (JHX AU)/Azek (AZEK US) Merger: Risky and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

James Hardie (JHX AU)/Azek (AZEK US) Merger: Risky, Expensive, And Poor Governance
Capri Unstitched: A Versace Sale Could Unlock Value for CPRI
Event Driven: Delhivery Acquires Ecom Express as Distress Sale

James Hardie (JHX AU)/Azek (AZEK US) Merger: Risky, Expensive, And Poor Governance

On the 24th March, building materials outfit James Hardie Industries Plc (JHX AU) announced a cash/scrip merger with decking manufacturer Azek (AZEK US).
JHX is offering 1.034 new JHX shares plus US$26.45/share in cash for each Azek share, or an implied $56.88 all-in price (at the time), a punchy 37.4% premium to undisturbed.
Apart from pushback on pricing for Azek, JHX shareholders have voiced opposition over the ASX granting a waiver, allowing the merger to proceed without a vote from JHX shareholders

Capri Unstitched: A Versace Sale Could Unlock Value for CPRI

Capri Holdings’ sale of Versace to Prada removes a structurally weak asset, shifting its balance sheet from net debt to net cash, simplifying its brand portfolio for sharper strategic focus.
Post-Transaction, Capri trades at just 4.4x EBITDA despite becoming a leaner, debt-free luxury group with two globally recognized brands — a setup primed for significant multiple expansion and investor re-rating.
A sum-of-the-parts valuation excluding Versace suggests Capri’s fair value is $30–33 per share, offering investors over 100% upside as the company pivots from portfolio fixer-upper to focused luxury contender.

Event Driven: Delhivery Acquires Ecom Express as Distress Sale

By Nimish Maheshwari

Delhivery (DELHIVER IN) acquired a 99.4% stake in Ecom Express for ₹1,407 crore, months after Ecom’s failed IPO and rights issue raised similar funds.
The deal combines two logistics leaders, expands Tier-2/3 reach, and promises cost efficiency, route optimization, and stronger pricing discipline in India’s fast-growing B2C e-commerce logistics.
Despite red flags in Ecom and DRHP disputes, Delhivery may have picked up a distressed but strategic asset at a bargain, with upside from network and tech integration.

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Apr 11

Daily Brief Event-Driven: Minebea Mitsumi Overbids Yageo for Shibaura Electronics (6957) and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Minebea Mitsumi Overbids Yageo for Shibaura Electronics (6957)
Shibaura Electronics (6957 JP): Minebea Mitsumi’s (6479 JP) White Knight Tender Offer at JPY4,500
Korea Short Selling: Biggest Changes in Shorts & Trade Performance
Corporate Act Amendment Takes Unexpected Turn: Watch for Holdco Momentum Plays Post-June Election
Suzuki Motor Placement Updates – Relative Correction Has Been Decent so Far. But Lacks Buyback
Goldlion Holdings (533 HK): An Attractive Spread Ahead of the Vote on 9 May
Gold Road (GOR AU)’s U-Turn On Gruyere’s Underground Mine Estimates
Goldlion Holdings (533 HK): 9th May Vote On Tsang Family’s Offer
Exploring Strategic Reviews: Key Opportunities in Biopharma and Food Sectors
Alcon’s Strategic Acquisition of Lensar: Potential 23% Upside with CVR Payout and Antitrust Considerations

Minebea Mitsumi Overbids Yageo for Shibaura Electronics (6957)

In early February, Yageo Corporation (2327 TT) made an unsolicited bid for Shibaura Electronics (6957 JP) at ¥4,300/share. They had approached in October 2024, and continued approaches through end-January.
Shibaura’s bankers approached Minebea Mitsumi (6479 JP) in January. Due diligence, then bids. They bid ¥4,600. Not enough said the SC. Then Trump. Then ¥4,400. Now ¥4,500 accepted 9 April.
But Trump tariffs relief came 9 April US time. And the Offer Price is below the mid-point of ALL three different financial advisors. I think this is not done yet.

Shibaura Electronics (6957 JP): Minebea Mitsumi’s (6479 JP) White Knight Tender Offer at JPY4,500

Shibaura Electronics (6957 JP) announced a preconditional tender offer from Minebea Mitsumi (6479 JP) at JPY4,500 per share, a 4.7% premium to Yageo Corporation (2327 TT)’s JPY4,300 hostile offer.
The offer is scheduled to start on 23 April, ahead of Yageo’s 7 May start. The Board intends to recommend the Minebea offer and oppose the Yageo offer.
Due to its low premium to the Yageo offer, at least another bidding round is highly probable, and the Minebea offer is below the midpoint of the IFA DCF valuation.

Korea Short Selling: Biggest Changes in Shorts & Trade Performance

The resumption of short selling in Korea came at a good time for investors, giving them some additional tools to manage market volatility.
Short interest has increased from 0.17% to 0.23% of market cap for the KOSPI market and from 0.46% to 0.63% for the KOSDAR market.
The KOSPI/KOSDAQ ratio has reverted a bit on profit taking, and the forecast index deletions have recovered a bit but should continue to see increase short interest.

Corporate Act Amendment Takes Unexpected Turn: Watch for Holdco Momentum Plays Post-June Election

By Sanghyun Park

The word on the street is the Dems are banking on their candidate winning in June, then clearing the veto and pushing the Corporate Act amendment through immediately.
What seemed like a dead issue for the Corporate Act amendment has turned into a surprise, shifting market momentum and potentially impacting the Korean stock scene.
It could shift the Korean market’s focus to long-term governance improvements, targeting major holdcos like CJ, Hanwha, GS, Doosan, Mobis, SK, and Samsung C&T, with June’s election key.

Suzuki Motor Placement Updates – Relative Correction Has Been Decent so Far. But Lacks Buyback

By Sumeet Singh

Tokio Marine Holdings (8766 JP) and Sompo Holdings (8630 JP) aim to raise around US1.15bn (including over-allotment) via selling around 5% of Suzuki Motor (7269 JP).
While Suzuki doesn’t have much direct exposure to the US markets, its shares had corrected in line with other auto players going into the deal launch.
In this note, we compare the deal to some of the past deals and talk about the updates since our last note.

Goldlion Holdings (533 HK): An Attractive Spread Ahead of the Vote on 9 May

Goldlion Holdings (533 HK)’s IFA considers Mr Tsang’s HK$1.5232 per share offer fair and reasonable. The vote is on 9 May.
The key condition is the scheme approved by at least 75% disinterested shareholders (<10% disinterested shareholders rejection). FMR holds a blocking stake but should be supportive.
The offer is reasonable compared to peer multiples and historical trading ranges. At the last close and for the 10 July payment, the gross/annualised spread is 4.3%/19.0%.

Gold Road (GOR AU)’s U-Turn On Gruyere’s Underground Mine Estimates

After rejecting Gold Fields (GFI SJ)‘s Offer last month, calling terms “low ball and opportunistic”, Gold Road (GOR AU) has done a bang-up job how NOT to underpin that position.
After correcting minor information (on the 4th April) to an Australian Roadshow Investor Presentation, GOR has now retracted details of the underground mining potential at the Gruyere mine.
But don’t expect any new developments in this transaction until after De Grey Mining (DEG AU)‘s Scheme vote on the 16th April.

Goldlion Holdings (533 HK): 9th May Vote On Tsang Family’s Offer

On the 17th December 2024, Goldlion Holdings (533 HK), an apparel manufacturer/distributor, announced an Offer, by way of a Scheme, from the Tsang family (2.95% stakeholder), for shares not held.
The Tangs are offerings $1.5232/share (declared final), a 24.85% premium to last price, but a 71% premium to undisturbed. Despite the very low price-to-book multiple, this transaction looks done.
The Scheme Doc is now out, with a Court Meeting on the 9th May, with payment on or before the 10th July. The IFA (Altus Capital) says “fair & reasonable“.

Exploring Strategic Reviews: Key Opportunities in Biopharma and Food Sectors

Lifeway Foods (LWAY) faces a pending takeover by Danone, with a potential board overhaul and strategic acquisition synergies.
Liquidia (LQDA) anticipates FDA approval for Yutrepia, challenging UTHR’s monopoly, with potential valuation gap closure post-commercialization.
Sage Therapeutics (SAGE) received a buyout offer from Biogen, with ongoing strategic review and potential for increased offer price.

Alcon’s Strategic Acquisition of Lensar: Potential 23% Upside with CVR Payout and Antitrust Considerations

Lensar is being acquired by Alcon for $14/share in cash plus a CVR worth up to $2.75/share.
The CVR payout requires Lensar’s systems to reach 614,000 procedures across 2026 and 2027, needing a 27% CAGR.
North Run, holding 56% economic ownership, will receive CVRs only on common shares and warrants, not preferred shares.

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Apr 10

Daily Brief Event-Driven: 7&I (3382) – FY24 Better and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

7&I (3382) – FY24 Better, FY25 OK, Surprisingly Large Buyback
CK Hutch (1 HK): Back To Square One
USTR Hearings on Section 301 China Maritime Dominance – Fees on Chinese Ships
HKBN (1310 HK): China Mobile Agrees to Acquire TPG’s Stake
China ETF Inflows & Implications: Central Huijin’s Huge Buying
Abacus Storage (ASK AU): Kirsh/Public Storage Buck Market Volatility With NBIO
HKBN (1310 HK): TPG Cashes In Early
BWGI’s Tender Offer for Verallia
Trial Purchase of Seiyu Creates New Japanese Retail Power

7&I (3382) – FY24 Better, FY25 OK, Surprisingly Large Buyback

Today, Seven & I Holdings (3382 JP) reported full-year earnings. The FY2025 guidance looks OK. Not overly exciting. Optically, it falls short, but 7&i guidance includes York only for H1.
The basic outlines of strategy in the Presentation are unchanged from the 6 March strategy report. The company seems convinced an IPO of SEI is a good thing. I’m underwhelmed.
The company also announced that it would bring forward ¥600bn of its planned 6-year ¥2trln buyback program, and execute it this year. That’s good.

CK Hutch (1 HK): Back To Square One

The irony is that CKH (1 HK)‘s Panama-port sale was probably prompted, at least in part, by a desire to get out of a situation which was becoming increasingly political.
Instead, it has thrust the company right into the heart of it. And the share price has now given up all of its initial gains. And then some.
After Panama’s Attorney General recently determined CK Hutchison’s concessions were unconstitutional, the Comptroller-General has now announced that an audit had found “many breaches” of the concession.

USTR Hearings on Section 301 China Maritime Dominance – Fees on Chinese Ships

The original issues were discussed in depth in The USTR’s New “Proposed Actions” For Section 301 Investigation on China’s Maritime/Shipping Sectors (now unpaywalled). Hearings took place 24-26 March 2025.
The hearings were long, and comments were predictable. Those supporting the measures offered evidence which was simply incorrect. Those against tried. Post-hearing comments were due 2 April.
We don’t yet know what will happen, but if they stay in place, starting 17 April, US exports of grain/pulses, coal, etc will suffer. Imports will see higher costs too.

HKBN (1310 HK): China Mobile Agrees to Acquire TPG’s Stake

China Mobile (941 HK) has entered a share purchase agreement to acquire TPG’s HKBN Ltd (1310 HK) shares and vendor loan note conversion shares by 28 November.
On completion, TPG will be released from its irrevocable, which has a competing offer clause. China Mobile’s agreement signals its expectation that I Squared will launch a competing proposal.
The agreement will not change I Squared’s approach as it would not negatively impact regulatory approvals (a key risk) or prevent it from meeting a 50% minimum tendering condition.

China ETF Inflows & Implications: Central Huijin’s Huge Buying

Nearly US$22bn has flowed into mainland China listed ETFs over the last 3 trading days, reversing outflows that started in mid February.
Central Huijin has announced that it will be increasing its ETF holdings to maintain smooth operation of China’s capital markets. The rest of the National Team will be buying too.
There are multiple implications of the huge ETF creations in a short time frame and a reversal of flows will lead to a reversion in a bunch of trades.

Abacus Storage (ASK AU): Kirsh/Public Storage Buck Market Volatility With NBIO

Ki Corporation and Public Storage (PSA US) together announced a NBIO, by way of a Scheme, to acquire all of the outstanding securities of Abacus Storage (ASK AU) not held.
The indicative offer of A$1.47/stapled security is a 26.7% premium to undisturbed and ~8% discount to the latest NTA/security. Nathan Kirsh directly/indirectly holds a 59.47% stake in ASK.
Trading at a gross/annualised spread of 6.9%/10.9%, assuming late Nov completion. That’s tight given timing risk, and terms not being firm.

HKBN (1310 HK): TPG Cashes In Early

Back in December, China Mobile (941 HK) made a pre-conditional HK$5.23/share voluntary Offer for HKBN (1310 HK). The wild card is whether I Squared launches a counter-proposal.
This transaction has no shortage of intriguing developments. Last month, MBK mysteriously converted its VLNs. Now TPG has entered into an SPA with Mobile to sell its 15.46% stake.
IF I Squared were to make a counter-proposal, I doubt it would secure the necessary regulatory approvals. Evidently TPG is not waiting around to find out.

BWGI’s Tender Offer for Verallia

BWGI proposes a voluntary tender offer at €30 per share (cum dividend), aiming for majority control without delisting, supported by the Moreira Salles family’s substantial financial capacity and credibility.
BWGI’s offer, backed by a $26 billion family office, presents a credible liquidity event; however, valuation and DCF analysis suggest room for a higher bid or competing interest.
Market volatility may increase investor preference for deal certainty, potentially improving acceptance of BWGI’s offer despite its modest premium over Verallia’s recent trading levels and long-term valuation benchmarks.

Trial Purchase of Seiyu Creates New Japanese Retail Power

By Michael Causton

Until last year, Trial was a Kyushu-based discount FMCG retailer, that had just completed its IPO.
Today, it is one of the largest FMCG retailers in the country having won the bidding to acquire Seiyu from foster care under KKR.
This is a massive development that will pressure other rivals to step up in order to compete.

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Apr 09

Daily Brief Event-Driven: Key Implications of SK Inc’s Disposal of SK Siltron and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Key Implications of SK Inc’s Disposal of SK Siltron
Abacus Storage King (ASK AU): Ki Corp/Public Storage’s NBIO at A$1.47
Potential Sale of a Controlling Stake in SK Siltron to Hahn & Co
Industrivärden’s Q1 2025: NAV Evolution, Discount, Target NAV, Replication

Key Implications of SK Inc’s Disposal of SK Siltron

By Sanghyun Park

SK Inc is selling SK Siltron to cut its 68% debt-to-equity ratio. The sale could reduce borrowings below ₩5T and lower debt ratio to 30-40%.
Chey Tae-won’s divorce lawsuit risks his majority stake in SK Inc. Selling Siltron helps raise ₩1T for alimony without touching his SK Inc shares, potentially reducing the holding company discount.
SK Inc-SK Square merger is unlikely soon, despite asset sales and preparation on both sides, as SK Square recently reaffirmed no current merger plans. Setting a position now seems premature.

Abacus Storage King (ASK AU): Ki Corp/Public Storage’s NBIO at A$1.47

On 7 April, Abacus Storage King (ASK AU) disclosed a non-binding proposal from Ki Corporation and Public Storage (PSA US) at A$1.47, a 26.7% premium to the undisturbed price.
While below NTA (implying a P/NTA of 0.92x), the offer is reasonable compared to peer multiples and historical trading ranges. It represents an all-time high.
A binding offer is conditional on due diligence (expected to take six weeks) and Board recommendation. The Board should work to secure a binding offer closer to NTA.

Potential Sale of a Controlling Stake in SK Siltron to Hahn & Co

By Douglas Kim

In this insight, we discuss about SK Inc (034730 KS) which is considering on selling the controlling stake of SK Siltron.
If SK is successful in selling 70.6% stake in SK Siltron for about 5 trillion won, it could result in more than 3 trillion won cash inflow for SK Inc.
Our base case valuation of SK Inc is NAV of 13.9 trillion won (NAV per share of 192,217 won), representing a 61% upside from current levels.

Industrivärden’s Q1 2025: NAV Evolution, Discount, Target NAV, Replication

Industrivärden offers cost-efficient, long-term exposure to Swedish industrial blue chips, with a high-quality balance sheet and 21% upside potential to our NAV-based target price of SEK 380.2.
While the portfolio remains concentrated in five core holdings, recent underperformance has opened a value gap; Volvo and Sandvik remain key drivers of upside in a cyclical rebound.
The current 5.5% NAV discount is below historical norms, but insider buying and improved fundamentals suggest scope for re-rating as market sentiment stabilizes around Industrivärden’s core assets.

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Apr 08

Daily Brief Event-Driven: HK Merger Arb: Opportunities Amidst the Market Selloff and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

HK Merger Arb: Opportunities Amidst the Market Selloff
Aussie Arbs: Trump Tariffs And MACs
MitCorp (8058) BIG Buyback – Share Demand Will Help Weather The Storm
Suzuki Motor (7269 JP) Placement: Limited Index Buying & Weak Markets Could Pressure Stock
Hong Kong Arbs: (Largely) Immune From Trump Tariffs
Assura in the Crosshairs

HK Merger Arb: Opportunities Amidst the Market Selloff

The gross spreads of large HK merger arb situations have increased due to the unfortunate fallout from Trump’s trade war. The HSI closed down 13.2%.
We assess the widening spreads of HK’s merger arb situations based on offer structure, preconditions, conditions, and other factors.
The deals, ranked in terms of increasing deal risk, are Tam Jai, Soundwill, Vesync, Goldlion, Canvest, ESR, OneConnect, HKBN, and ENN Energy.

Aussie Arbs: Trump Tariffs And MACs

Travis Lundy succinctly summarised the Trump Tariffs in Trump Team’s Weird Tariff Math – Not Meant to Be Negotiated. Do read his note.
From an arb standpoint, most (all?) NBIOs will likely see a downward revision in pricing. Vote risk should also be reduced.
Such tariffs on predominantly domestic businesses should not trigger material adverse changes (MACs) Down Under. But it is still a worthwhile project to dig a little deeper.

MitCorp (8058) BIG Buyback – Share Demand Will Help Weather The Storm

On 3 April mid-day, Mitsubishi Corp (8058 JP) announced its FY25 earnings guidance and new “Shareholder Return Strategy”, a ¥1 trillion buyback, and its “Corporate Strategy 2027” Mid-Term Management Plan.
The FY25 forecast is for a third consecutive decline in underlying operating cashflow, but a hike in dividend from ¥100 to ¥110 and a ¥1trln share buyback, including ¥230bn tender.
The combination of dividend and buyback should be 15% of market cap over the next 12mos. And I expect Warren Buffett will consider buying dips.

Suzuki Motor (7269 JP) Placement: Limited Index Buying & Weak Markets Could Pressure Stock

Tokio Marine & Nichido Fire Insurance and Sompo Japan Insurance are looking to offload their entire stakes in Suzuki Motor (7269 JP) by way of a secondary offering.
With the size of the secondary offering less than 5% of the number of shares, there could be no index buying in the short-term and that will pressure the stock.
If the overallotment option is exercised and the seller of the shares is currently considered as non-float, there could be small passive buying in the short-term.

Hong Kong Arbs: (Largely) Immune From Trump Tariffs

In Aussie Arbs: Trump Tariffs And MACs, I ran a ruler over the fifteen live deals Down Under, and how they may be affected by the Trump Tariffs.
This insight canvasses the ongoing Hong Kong arbs and wording surrounding material adverse changes (MACs). Hong Kong MACs are typically less onerous, and lack specificity, versus Aussie arbs.
Although the framework exists for an Offeror to enforce a MAC, I’m not aware of any evidence of this occurring under Hong Kong’s Takeovers Code.

Assura in the Crosshairs

KKR’s 49.4p all-cash offer, cum-dividend and matching EPRA NTA, provides a 31.9% premium and ~12.3% gross spread, creating an attractive short-term arbitrage opportunity for investors.
PHP could increase its cash component by 1–2p without breaching investment-grade leverage, supported by strong rental income, refinancing flexibility, and post-merger synergies that enable a credible deleveraging path.
The estimated 2–2.5 month timeline from firm offer to cash settlement positions this deal within a standard UK M&A framework, offering risk arbitrageurs visibility and duration-limited exposure.

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Apr 07

Daily Brief Event-Driven: Merger Arb Mondays (07 Apr) – Seven & I and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Merger Arb Mondays (07 Apr) – Seven & I, Makino, HKBN, OneConnect, Dada, Insignia, Domain, Dropsuite
Abacus Storage King (ASK AU) Gets an NBIO from Ki Corp & PSA
[Alert] Sell Howard Hughes (HHH)
Weekly Update (HAVAS, ANGI)

Merger Arb Mondays (07 Apr) – Seven & I, Makino, HKBN, OneConnect, Dada, Insignia, Domain, Dropsuite

We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
Highest spreads: Seven & I Holdings (3382 JP), Insignia Financial (IFL AU), ENN Energy (2688 HK), OneConnect Financial Technology (OCFT US), Smart Share Global (EM US), Soundwill Holdings (878 HK).
Lowest spreads: Sinarmas Land (SML SP), Makino Milling Machine Co (6135 JP), Millennium & Copthorne Hotels Nz (MCK NZ), Shibaura Electronics (6957 JP), Tonami Holdings (9070 JP).

Abacus Storage King (ASK AU) Gets an NBIO from Ki Corp & PSA

Abacus Storage King (ASK AU) was demerged from Abacus Property Group in 2023 and the stock has traded in a range since listing.
Now, Ki Corp and Public Storage (PSA US) have made a conditional and non-binding proposal to take Abacus Storage King (ASK AU) private at A$1.47/share.
The offer is a 27% premium to the last close of the stock and is higher than the price that the stock has traded at since listing.

[Alert] Sell Howard Hughes (HHH)

By Richard Howe

Just a quick update: I’ll be selling my position in Howard Hughes (HHH) to fund a purchase of Havas (HAVAS).
Howard Hughes remains an attractive company that isn’t directly impacted by potential tariffs—aside from broader recession-related risks.
However, with Pershing Square attempting to take the company private, I don’t feel I have a clear edge in the current situation.

Weekly Update (HAVAS, ANGI)

By Richard Howe

This week, IAC Inc (IAC) spun off Angi Inc (ANGI). The first day of trading was April 1st.
Angi operates the largest digital marketplace for home services in the U.S., connecting homeowners with contractors across Angi’s Ads and Leads platform (formerly HomeAdvisor/Angie’s List) and Services (pre-priced jobs fulfilled via Angi’s network)
ANGI has fallen sharply despite no tariff exposure.

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Apr 06

Daily Brief Event-Driven: SSI Weekly Newsletter: Updates on Liquidia and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

SSI Weekly Newsletter: Updates on Liquidia, SpringWorks, Allakos, Acelyrin, SAGA, NZME, Nathan’s, HilleVax, TTEC
Last Week in Event SPACE: Makino, ENN Energy, Trump Tariffs, HKBN
Weekly Deals Digest (06 Apr) – Skyworth, HKBN, Makino, Avjennings, Domain, Dropsuite, Dada Nexus
(Mostly) Asia-Pac M&A: Topcon, Jinke Smart Services, Dropsuite, Domain, Jamco, Shin Kong, Dada Nexus

SSI Weekly Newsletter: Updates on Liquidia, SpringWorks, Allakos, Acelyrin, SAGA, NZME, Nathan’s, HilleVax, TTEC

Liquidia’s NDA for Yutrepia accepted by FDA with a PDUFA date set for May 24, commercialization expected soon.
SpringWorks Therapeutics’ stock dropped 17% amid silence on Merck takeover talks, market perceives low deal probability.
Allakos announced a buyout at $0.33/share, stock jumped 40%, deal expected to close in May 2025.

Last Week in Event SPACE: Makino, ENN Energy, Trump Tariffs, HKBN

At a zero net debt zero net cash (securities liquidated) Adjusted Price/Earnings Ratio of 11.3x expected Net Income, the multiple offered Makino Milling Machine (6135 JP) is not a knock-out.
ENN Energy (2688 HK) investors hoping for a clean (er) exit, or where the back-end terms were clearly defined, will be disappointed. And minorities are active in this name. Avoid
New Trump Tariffs are not based on any actual tariffs, or non-tariff measures. The simple/explicit assumption is that if you run a trade surplus with the US, you are cheating.

Weekly Deals Digest (06 Apr) – Skyworth, HKBN, Makino, Avjennings, Domain, Dropsuite, Dada Nexus

A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
ECM developments: DN Solutions (298440 KS) seeks to raise US$1.1 billion in a KRX IPO and Chagee Holdings (CHA US) seeks to raise US$400-500 million through a Nasdaq IPO.
Event-Driven developments: Skyworth Group Limited (751 HK), HKBN Ltd (1310 HK), Makino Milling Machine Co (6135 JP), Avjennings Ltd (AVJ AU), Domain Holdings Australia (DHG AU), Dropsuite Ltd (DSE AU).

(Mostly) Asia-Pac M&A: Topcon, Jinke Smart Services, Dropsuite, Domain, Jamco, Shin Kong, Dada Nexus

I tally 54 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma.
Two news new deals discussed this week: Reject Shop (TRS AU) and Topcon Corp (7732 JP). Jinke Smart Services (9666 HK) also suspended pursuant to the Takeovers Code.
Key updates/news took place on Dropsuite (DSE AU), AVJennings Ltd (AVJ AU), Domain Holdings (DHG AU), Jamco (7408 JP), Shin Kong Financial Holding (2888 TT), and Dada Nexus (DADA US).

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Apr 05

Daily Brief Event-Driven: Nidec Launches on Makino Milling (6135) – Others Presumably Wait In the Wings and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Nidec Launches on Makino Milling (6135) – Others Presumably Wait In the Wings
Mitsubishi Logisnext (7105) – Worth Buying The Dip On Likely Sale
Yoon’s Impeachment Confirmed: Key Timeline & Regime Change Trade

Nidec Launches on Makino Milling (6135) – Others Presumably Wait In the Wings

Nidec Corp (6594 JP) bid ¥11,000 for Makino Milling Machine Co (6135 JP) in December, saying it expected to launch on 4-April. It launched its ¥11,000 bid on 4-April.
A Nikkei article in March suggested Makino had found multiple competing bidders, some who had put in “legally binding bids.” No news on those yet, but we have a month.
Earnings are 9-May. Strategy on timing for Makino differs according to its desired outcome. It has to opine on Nidec’s bid by about 18 April. Be long. Carry .

Mitsubishi Logisnext (7105) – Worth Buying The Dip On Likely Sale