In today’s briefing:
- [Japan Activism/M&A] Hogy Medical (3593) Reportedly Up For Auction – Totally Unsurprising
- GMO Internet (4784) – GMO Internet Parent Has Been SELLING In The Market
- CKH (1 HK): Intervention Towards Securing Participation
- A Tender Offer of JTC by Affirma Capital
- Hana Micron Split Cancellation: Trades Targeting Position Unwinding and Korea Discount Compression
- Prosus–JET Arbitrage: Tight Spread, High Certainty Ahead of EC Decision
- LG CNS IPO Lockup Expiry – US$1.1bn Release, with PE Well in the Money
- State-Level Regulatory Risks Pose Significant Challenges in TDC’s Acquisition of ProAssurance, Market Underestimates Potential Hurdles
[Japan Activism/M&A] Hogy Medical (3593) Reportedly Up For Auction – Totally Unsurprising
- Hogy Medical (3593 JP)‘s founder passed and there was a re-arranging of Hoki family deckchairs in 2021. In 2022 there was a BIG buyback from the family at ¥3,130/share.
- I discussed it here. I suggested that meant accretion, a family willing to sell, and an open register for a cheap company always heavily owned by value investors.
- The stock went nowhere for 18mos as activists dallied. In 2024 it ran from ¥3,500 to ¥5,000 as Dalton bought 20%. Then they got a board seat. Now takeover noise.
GMO Internet (4784) – GMO Internet Parent Has Been SELLING In The Market
- I have harped on the fact that GMO Internet Group (9449 JP) has to sell GMO Internet (4784 JP) shares with the goal to get 35% tradable shares by end-2025.
- I have written about it here, here, here, and here. The price needs to be lower so the parent can launch a HUGE block. The stock must be less squeeze-able.
- It turns out the parent started selling in the market the day after the Offering was cancelled. The setup is delicious now.
CKH (1 HK): Intervention Towards Securing Participation
- Inviting a PRC investor to join the bidding consortium as a significant member, as opposed to a majority player, appears the panacea to get this port deal over the line.
- Although CK Hutchison Holdings (1 HK) stopped short of naming the investor, China’s state-owned shipping conglomerate Cosco is widely expected/rumoured to join BlackRock and Swiss-Italian shipping company MSC.
- Participation through effective intervention? Cosco’s involvement should all-but seal Chinese regulatory approvals. The green light from the US administration, the EU, and other jurisdictions, will pivot off how much involvement.
A Tender Offer of JTC by Affirma Capital
- On 28 July, it was announced that Affirma Capital will conduct a tender offer of JTC Inc/Fukuoka (950170 KS) which is a Japanese duty free operator listed on KOSDAQ.
- This follows the exercise of a call option on all shares held by former JTC Chairman Gu Cheol-mo.
- Despite some recent concerns about travelling to Japan due to Manga driven fears about earthquakes, there are some clear longer term signs that the global travelers visiting Japan are increasing.
Hana Micron Split Cancellation: Trades Targeting Position Unwinding and Korea Discount Compression
- The split’s cancellation caught event-driven traders off guard, squeezing shorts and sparking short-covering flows, likely boosting the stock near term and removing governance overhang for a potential rerate.
- Passive flow shifts as spinco’s planned KOSDAQ 150 inclusion is canceled, reversing early index rebalancing and pre-positioning by passive investors.
- Hana Micron stays in the index, so no major passive outflows—just some trimming. Trade the short-cover pop, watch for passive cleanup dips as potential re-entry points.
Prosus–JET Arbitrage: Tight Spread, High Certainty Ahead of EC Decision
- Prosus’s €20.30/share offer for JET trades at a 1.1% gross spread with EU clearance due 11 August; implied success probability stands at ~97% based on current market pricing.
- Offer extended to 1 October to align with EC timeline. Prosus proposes structural remedies—stake cut and board exit from Delivery Hero—to resolve competition overlap in five EU countries.
- Estimated settlement by mid-October. New entrants see 5.5% annualized return; early investors could realize 9.6%. Downside risk to €12.43 implies a 38% loss if deal breaks unexpectedly.
LG CNS IPO Lockup Expiry – US$1.1bn Release, with PE Well in the Money
- LG CNS (064400 KS) raised around US$825m in its Korea IPO in February 2025. LG CNS is a South Korean information technology company.
- The shares didn’t do much at listing and have only recently moved higher to trade above its IPO price.
- In this note, we will talk about the lock-up dynamics and updates since our last note.
State-Level Regulatory Risks Pose Significant Challenges in TDC’s Acquisition of ProAssurance, Market Underestimates Potential Hurdles
- The merger involves TDC acquiring ProAssurance for $25/share, creating a combined 16% market share in medical malpractice insurance.
- California regulatory concerns arise due to the combined entity’s 65% market share, potentially impacting merger approval.
- TDC’s offer price was contingent on regulatory outcomes, with PRA rejecting a structure tying price to regulatory conditions.
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