Daily Brief Event-Driven: A Walkthrough of Hyundai Department Store Demerger Event and more

In today’s briefing:

A Walkthrough of Hyundai Department Store Demerger Event
Last Week in Event SPACE: NTT, Frasers Hospitality, Genting/Macau, United Tractor, Arb Shockers
(Mostly) Asia-Pac Weekly Risk Arb Wrap: Moya, Singapore Medical, Link Admin, Giordano,111 Inc, VNET
Hyundai Department Store & Hyundai Greenfood To Conduct Equity Spin-Offs to Create Holdcos & Opcos

A Walkthrough of Hyundai Department Store Demerger Event

This is an equity spinoff where the existing shareholders receive shares in the spun-off company. But this creates two LISTED companies. In such a case, there won’t be appraisal rights.
PASSIVE’s selling flow towards the trade suspension tends to be offset by ACTIVE’s buying flow aiming for value accretion. So, developing a timely entry/exit between these opposing flows is critical.
Holdco’s 30% rule dynamic generally, in relative terms, leads to an increase in the value of Opco’s stake and a decline in the value of Holdco’s stake.

NTT (9432 JP) results were better than Softbank Corp’s and KDDI’s. The good “drift trade” may still be to be long NTT vs a basket of KDDI and Softbank Corp.
The Frasers Hospitality (FHT SP) Scheme failed. The non-vocal minority simply didn’t show up. Maybe apathy. Maybe a holiday season. Maybe lack of premium paid encouraged people to not vote.
In a surprise move, Genting Bhd (GENT MK)– or Genting Malaysia (GENM MK) – has joined the six incumbents in bidding for new casino licences in Macau.

There are 49 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
Three new deals were discussed this week: Anthoni Salim’s Exit Offer for Moya Holdings Asia (MHAL SP); 111 Inc (YI US)‘s MBO, and Singapore Medical (SMG SP)‘s MBO.
Key updates took place for Frasers Hospitality Trust (FHT SP),Link Administration (LNK AU), Giordano International (709 HK), Shidax Corp (4837 JP), and VNET (VNET US).

On 16 September, Hyundai Dept Store and Hyundai Greenfood announced that they will complete equity spin-offs to create holding companies structures.
It appears that the real reason these companies are trying to set up these structures maybe to raise the control by the major shareholders including Ji-Seon Chung and Kyo-Seon Chung.
The spin-off ratio between the two companies is 23.24% for Hyundai Department Store Holdings and 76.76% for Hyundai Department Store.

💡 Before it’s here, it’s on Smartkarma

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