In today’s briefing:
- Intel on Today’s SK Square Price Action: Rotation Flow Triggered by Hynix’s 10% Fund Cap Removal
- SK Innovation – End of Lockup Period For 33% of Outstanding Shares
- LG Chem: Considering Higher Dividend Payout Using Sale Proceeds from LGES
- SK D&D: Delisting Tender Offer by Hahn & Co Fails – What’s Next?
- Sintana Energy’s Acquisition of Challenger Energy: Merger Arbitrage Opportunity with 15% Spread and Minimal Regulatory Risks
- Update – Honeywell Completes the Spin-Off of Solstice; Regular-Way Trading Commences
- Ercros: Regulatory Green Light, Shareholder Hurdles Ahead
- DuPont De Nemours, Inc. (NYSE: DD) To Separate Its Electronics Business on Nov 1
Intel on Today’s SK Square Price Action: Rotation Flow Triggered by Hynix’s 10% Fund Cap Removal
- KOFIA says Hynix hit 10.89% weight in October vs 8.37% in September, lifting the 10% fund cap — now local funds can size up like Samsung Electronics.
- SK Square might have been dumped today as locals unwound proxy trades; with Hynix freed from the 10% cap, funds rotated directly into Hynix, front‑running the shift.
- Key now is rotation size; SK Square’s beta‑plus trade to Hynix is fading, and near term we should expect relative underperformance as flows migrate.
SK Innovation – End of Lockup Period For 33% of Outstanding Shares
- There is an end of a lock-up period for 55.3 million shares (33% of outstanding shares) for SK Innovation (096770 KS) starting 20 November 2025.
- This could potentially result in additional selling by insiders which could negatively impact its share price in the coming weeks.
- SK Innovation is currently trading at relatively high valuation multiples. We remain Bearish on SK Innovation.
LG Chem: Considering Higher Dividend Payout Using Sale Proceeds from LGES
- LG Chem is considering on paying higher dividends using sale proceeds from LG Energy Solution.
- This breaks the company’s principle of using only ordinary income from operating activities as a source for dividends.
- If indeed LG Chem goes ahead with this plan, this would be as a result of heightened demands from major activist investors including Palliser Capital.
SK D&D: Delisting Tender Offer by Hahn & Co Fails – What’s Next?
- SK D&D announced the results of the delisting tender offer by Hahn & Co. SK &D mentioned that the subscription reached only 40% of the planned tender offer amount.
- Post failed tender offer for SK D&D by Hahn & Co, we expect this to have a positive impact on SK D&D’s share price.
- The major reason for this is that there are still many investors that believe that SK D&D’s shares are significantly undervalued at P/B of only 0.4x.
Sintana Energy’s Acquisition of Challenger Energy: Merger Arbitrage Opportunity with 15% Spread and Minimal Regulatory Risks
- Sintana Energy is acquiring Challenger Energy at a 0.4705x exchange ratio, with a 15% actionable spread.
- Charlestown Capital Advisors orchestrates the merger, holding significant stakes in both companies and providing financial support.
- Merger approval requires 75% of Challenger votes, with 34% already committed, and regulatory approvals expected smoothly.
Update – Honeywell Completes the Spin-Off of Solstice; Regular-Way Trading Commences
- Honeywell completed the spin-off of Solstice Advanced Materials Inc. on October 30, 2025.
- Both the parent and the spin-off commenced regular-way trading from October 30, 2025. On the first day of trading, parent lost 0.84%, while spin-off gained 0.29%.
- On an overall basis, HON (consolidated) gained 2.6% since the spin-off announcement on October 8, 2024, underperforming the S&P 500’s which gained 18.6% gain over the same period.
Ercros: Regulatory Green Light, Shareholder Hurdles Ahead
- CNMC approval with commitments de-risks the regulatory leg, shifting focus to shareholder acceptance and the Ministry’s decision; the spread has compressed but still offers short-dated, event-driven upside.
- Ercros’s weak H1 performance and cyclical trough distort multiples; the €3.505 offer equates to ~9x EBITDA today but nearer 6× on normalized levels, consistent with control transaction benchmarks.
- Base-Case IRR exceeds 100% annualized if settled by December; downside anchored by €2.56 break price, while any price bump toward €4.40 adds optionality without being part of the base case.
DuPont De Nemours, Inc. (NYSE: DD) To Separate Its Electronics Business on Nov 1
- DuPont will separate its Electronics unit as Qnity Electronics Inc. on Nov 1, 2025, creating two focused platforms – a high-growth semiconductor materials business and a steadier diverfied industrial company
- Qnity launches with ~$4.3B sales, ~29% margins, strong semiconductor exposure but higher leverage and cyclicality
- We value Qnity at $106/share (17.2× FY26E EBITDA) and DuPont (ex-Qnity) at $47.5/share (13.0× FY26E EBITDA).
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