In today’s briefing:
- Korea Semicon ETF Rebal October Play: 2 In, 2 Out Long-Short Setup
- OneConnect (6638 HK/OCFT US): 28th October Vote On Ping An’s Offer
- OneConnect Financial (6638 HK/OCFT US): Scheme Vote for Below Net Cash Offer on 28 October
- BMPS–Mediobanca: 86.3% Tendered — What Changes Now?
- Heineken’s USD3.2 Bn Acqsn. Frothy Valuations. Why Are Asia’s Beer Champions Still Flat?
- AAM-Dowlais: Short-Dated Arb with Double-Digit Annualised Return
- LakeShore Biopharma Faces Privatization Offer Amid Nasdaq Delisting and Market Overreaction
Korea Semicon ETF Rebal October Play: 2 In, 2 Out Long-Short Setup
- MTD screening results with 5 trading days left point to 2 names going out and 2 names coming in: Gemvax and Wonik IPS replace Dongjin Semichem and Jusung Engineering.
- Unlike last April’s tariff-distorted +1.3% rebalance, this time we expect cleaner, more meaningful price action.
- No pre-positioning seen, so I’ll target ETF rebalance day (Oct 10) and maybe take an anticipatory position a day earlier.
OneConnect (6638 HK/OCFT US): 28th October Vote On Ping An’s Offer
- I was way off on timing. After the pre-cons were satisfied on the 9th July, I thought Ping An’s Offer for Oneconnect Financial (6638 HK) could feasibly wrap up around now.
- A draft Scheme Doc was released on the 18th July. The IFA (Gram Capital) said fair & reasonable.
- The Scheme Document is now out, with a Court Meeting on the 28th October and expected payment around the 28th November.
OneConnect Financial (6638 HK/OCFT US): Scheme Vote for Below Net Cash Offer on 28 October
- Oneconnect Financial Technology (6638 HK)’s IFA opines that Ping An Insurance (H) (2318 HK)’s HK$2.068 (US$7.976 per ADS) offer is fair and reasonable. The vote is on 28 October.
- The offer is below net cash, and the FCF burn is modest. Ping An is privatising OneConnect just as its revenue declines end (due to the discontinued cloud business).
- The high minority participation rate and protest votes at the recent AGM are warning signs that the scheme vote is high risk. This setup is best avoided.
BMPS–Mediobanca: 86.3% Tendered — What Changes Now?
- BMPS closed the re-open at 86.3% of Mediobanca (62.3% initial + ~24pts re-open); settlement 29 Sep. Super-majority secured enables extraordinary resolutions; MB remains listed below 90%/95% thresholds.
- MB should hug 2.533×BMPS + €0.90 into 29 Sep; basis widened on flows but typically compresses. Sensitivity: each 1% move in BMPS shifts implied MB ~€0.20 (delta ≈2.533).
- Trade: convergence hold long MB/short 2.533× BMPS into settlement; exit unless underwriting merger risk. For BMPS, lower dilution and cash outlay support the equity, tempered by integration and accumulation overhang.
Heineken’s USD3.2 Bn Acqsn. Frothy Valuations. Why Are Asia’s Beer Champions Still Flat?
- Heineken Holding NV (HEIO NA) ’s US$3.2bn acquisition of beer, soft drinks, and retail assets in Central America at 11.6x EV/EBITDA highlights the valuation gap with Asian Beer Companies.
- CR Beer’s strong 1H2025 recovery in sales and margins were powered by innovative product launches and digital channel sales. However it’s performance has drawn little market attention, yet.
- China Resources Beer Holdings (291 HK) trades near 10-year low EV/EBITDA, even as consensus expects solid margins and steady revenue growth ahead. Expect a valuation upside.
AAM-Dowlais: Short-Dated Arb with Double-Digit Annualised Return
- Dowlais shareholders receive £0.43 cash plus 0.0881 AAM shares, valuing the stock near 82p. Current price 79.75p leaves a 2.9% spread, annualising to ~11–13% returns.
- Both shareholder votes passed and AAM secured $3bn funding, reducing execution risk. Regulatory approvals across the US, EU, China, Brazil, and Mexico remain the final gating conditions to completion.
- Downside if deal fails: shares could re-rate to pre-announcement 68–75p, ~5–15% downside. Market sees limited overlap, so main risk is delayed approvals pushing closing into early 2026.
LakeShore Biopharma Faces Privatization Offer Amid Nasdaq Delisting and Market Overreaction
- LakeShore Biopharma received a non-binding privatization offer of $0.86/share from a consortium including its controlling shareholder.
- Crystal Peak Investments acquired a 51% stake at $0.71/share and seeks to buy remaining shares at $0.86/share.
- Oceanpine Capital, a consortium member, has historical ties to LSBCF, with its managing director previously serving as chairman.
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