In today’s briefing:
- Tsuruha (3391) And Welcia (3141) To Move UP Merger to End-2025; Makes It TWO Trades in 18mos?
- Shandong Hi-Speed New Energy (1250 HK): SPA Completed, Next Unconditional MGO
- Vesync (2148 HK): 33.3% Premium For An Illiquid Arb – Yep, This Is Done.
- InnoScience (2577 HK): Prices at Low End & Lists Today; Index Inclusion Timeline
- Weekly Deals Digest (29 Dec) – Henlius, Vesync, SDHS New Energy, GA Pack, Makino, Malaysia Airports
- Merger Arb Mondays (30 Dec) – ESR, Canvest, Vesync, GAPack, SDHS New Energy, CPMC, Makino, Arcadium
- Adani Green Energy (ADANIGR IN): Facing the Passive Boot; But Who Will Buy?
- Shandong Hi-Speed New Energy (1250 HK)’s Unconditional MGO. It Is What It Is
- EQD | Nikkei Index Options Weekly – December 23 – 27
- EQD | Kospi Index Options Weekly – December 23 – 27
Tsuruha (3391) And Welcia (3141) To Move UP Merger to End-2025; Makes It TWO Trades in 18mos?
- 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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