In today’s briefing:
- HD Hyundai Marine Solution (443060 KS) IPO: No Passive Buying Near-Term
- Merger Arb Mondays (29 Apr) – Azure, Silver Lake, Roland DG, CF Logistics, China TCM, Hollysys
- India: Potential Free Float Changes & Passive Flows in May
- MBK’s ConnectWave Tender Offer: Details & Trading Angles
- Connect Wave: Tender Offer of 30% of Shares by MBK Partners
- SET50 Index Rebalance Preview: Market Consultation & More Changes in June
- EQD / NSE Volatility Update / 22-Apr-24 to 26-Apr-24
- BHP to Consider Sweetened Proposal for Anglo
HD Hyundai Marine Solution (443060 KS) IPO: No Passive Buying Near-Term
- HD Hyundai Marine Solution (443060 KS) is looking to raise KRW 742bn (US$540m) in its IPO, valuing the company at KRW 3,707bn (US$2.69bn). Listing is expected to be in early-May.
- Competition for the shares has been fierce with institutional investors indicating demand for 201x the number of shares on offer at prices higher than the top end of the range.
- Barring a doubling of the stock price, the earliest that the stock will be added to major indices is December 2024. So, no passive buying in the short-term.
Merger Arb Mondays (29 Apr) – Azure, Silver Lake, Roland DG, CF Logistics, China TCM, Hollysys
- 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: Qantm Intellectual Property (QIP AU), Azure Minerals (AZS AU), Hollysys Automation Technologies (HOLI US), Probiotec Ltd (PBP AU), Southern Cross Media (SXL AU), China TCM.
- Lowest spreads: Chilled & Frozen Logistics Holdings (9099 JP), Roland DG Corp (6789 JP), Mma Offshore (MRM AU), Pact Group Holdings (PGH AU), Newmark Property REIT (NPR AU).
India: Potential Free Float Changes & Passive Flows in May
- Companies in India have disclosed their shareholding pattern as of end-March in April. There are companies with significant float changes from end-September and/or end-December.
- The changes in free float could be reflected in domestic and global indices over the next few weeks and months resulting in action from passive trackers.
- Depending on the date that the shareholding was published, there could be 14 stocks with passive inflows from global trackers while 7 could see passive outflows in May.
MBK’s ConnectWave Tender Offer: Details & Trading Angles
- MBK Partners will launch a tender offer for ConnectWave from today to May 24th. The target volume is 16.6M shares (40% of SO) at ₩18,000 per share, a 15.6% premium.
- MBK commits to acquiring all tendered shares, regardless of subscription rates, in order to expedite the delisting process. So, there is no cancellation or allocation risk.
- ConnectWave’s retail investor base, with high entry prices, may hinder reaching 70% of the target volume. Absence of risks suggests considering buy positions for potential secondary tender offer.
Connect Wave: Tender Offer of 30% of Shares by MBK Partners
- After the market close on 26 April, it was reported that MBK Partners has launched a tender offer of a 29.61% stake of Connectwave (119860 KS).
- The tender offer price is 18,000 won, which is 15.6% higher than the closing price (15,570 won) of the company on 26 April.
- The tender offer period is from 29 April to 24 May. The amount of the tender offer is about 300 billion won.
SET50 Index Rebalance Preview: Market Consultation & More Changes in June
- The SET has run a market consultation on relaxing liquidity thresholds for inclusion of stocks in the Stock Exchange of Thailand SET 50 Index (SET50 INDEX) universe.
- The consultation is the result of an increase in Average Daily Trading Values and lower turnover ratios, especially for large cap stocks.
- Berli Jucker (BJC TB) is now a potential index inclusion in June and that could result in four constituent changes at the next rebalance.
EQD / NSE Volatility Update / 22-Apr-24 to 26-Apr-24
- SEBI extends cross-margining discounts to correlated assets with different maturities – Dispersion trading & vol arb strategies to benefit.
- In spite of upcoming tier-1 event risks the vol surface has flattened dramatically. Current IV levels are supportive of a continued “High & Down” vol state.
- Curve steepening seen in Nifty50 IVs. Unusual kinked-shaped in BankNifty term structure has normalized – vol curve now has a uniform orientation.
BHP to Consider Sweetened Proposal for Anglo
- On 27 April, Reuters reported that BHP is considering making an improved offer for Anglo American after its initial proposal was rejected. Anglo’s shares trade at 0.3% discount to proposal.
- BHP is not paying any control premium. Despite its robust portfolio and recent share price appreciation, Anglo trades at a 18% discount compared to the sum of its parts (3018p).
- Interloper risk is high. Antitrust risk seems low. As a defence, Anglo may conduct some portfolio simplification to unlock value. I would be long at current prices.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
