In today’s briefing:
- Friendshoring Aussie Rare Earths
- Soft99 Corp (4464 JP): Could the MBO Revised Offer Get the Job Done?
- Block Deal Sale of 1.7 Trillion Won Worth of Samsung Electronics
- NPS Announces New Local SMID Fund Managers: Could Impact March KOSPI Size Index Migration Event
- Honeywell Spin-off (Solstice) Deep Dive
- Q3 ’25 Spin-off Round Up + Spin-off Calendar
Friendshoring Aussie Rare Earths
- As discussed in my April note Know Your Rare Earth Elements As China Restricts Exports, China escalated restrictions on the export of rare earths – to all countries.
- Last week, China ramped up export controls on five additional rare earths; in tandem with related technologies.
- The US recently struck a deal MP Materials (MP US) on light rare earths. The possibility of the US taking equity stakes in Australian processing projects could become a reality.
Soft99 Corp (4464 JP): Could the MBO Revised Offer Get the Job Done?
- The Soft99 Corp (4464 JP) MBO offer price has been increased by 8.7% to JPY2,680, an 18.8% discount to the last close and a 34.6% discount to the Effissimo offer.
- Ostensibly, the offer was revised based on requests from some shareholders to increase the offer price and for it to exceed the book value of JPY2,653 (implying P/B of 1.01x).
- The latest update points to modest withdrawals of non-KeePer acceptances. Effissimo continues to face an uphill task, and the revised MBO offer increases the odds of success.
Block Deal Sale of 1.7 Trillion Won Worth of Samsung Electronics
- It was reported that Hong Ra-hee, Lee Boo-jin, and Lee Seo-hyun will be selling a combined 1.7 trillion won worth of Samsung Electronics to pay for inheritance taxes.
- This stake sale by the Lee family will represent 0.3% of Samsung Electronics outstanding shares.
- Samsung Electronics still trade at low multiples and its valuations remain attractive. Its recent strategic partnership with OpenAI regarding the Stargate project also remain a major positive catalyst.
NPS Announces New Local SMID Fund Managers: Could Impact March KOSPI Size Index Migration Event
- NPS’s new SMID mandates use a benchmark, an 80/20 mix of the KOSPI Mid+Small Cap (Size Index) and KOSDAQ150, with ~₩500bn total, implying roughly a 20% step-up in mid/small-cap exposure.
- March KOSPI large→mid-cap migration could trigger significant passive flows, unlike last September when policy rallies and APR index noise distorted flow–price impact correlation.
- NPS compressed its SMID trading window near the effective date, hinting at tighter rebalancing; with ~20% mid-cap exposure bump in March, this could create a notable price impact trade.
Honeywell Spin-off (Solstice) Deep Dive
- Honeywell (HON) will spin off 100% of its Advanced Materials business, Solstice (SOLS), on October 30, 2025.
- Solstice is a leading global supplier of environmentally sustainable refrigerants, electronic materials, and specialty chemicals.
- The business has historically grown at roughly a 4% CAGR and is positioned to benefit from several long-term tailwinds — including semiconductor expansion, data center growth, industrial onshoring, and regulatory phase-downs of high-GWP refrigerants.
Q3 ’25 Spin-off Round Up + Spin-off Calendar
- Honeywell spinoff Solstice to continue M&A playbook post separation: Spin-offs that are active in M&A tend to perform well. This is a positive.
- Top Golf VIC Write Up: Good write up breaking down the demerger arbitrage opportunity
- WSJ: The Years Buzziest Deals are Corporate Breakups
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