In today’s briefing:
- Shin Kong (2888 TT)/Taishin (2887 TT) – Short Timer, FX Risk, Index Flows – Time To Buy Vs Peers
- Nakano Refrigerators (6411 JP): Marunouchi Capital’s JPY7,900 Tender Offer
- Mayne Pharma: No Precedence for a Deal Termination
- Adriatic Metals (ADT AU)/Dundee Metals (DPM CN): A Burgeoning Balkan Play
- Telcoware & Shinsung Tongsang Tender Offers: Minority Shareholders Demand Higher Tender Offer Prices
- Santos (STO AU): XRG’s Non-Binding Offer Faces an FIRB Challenge
- Ascentech (3565 JP): Orix (8591 JP)’s JPY1,680 Tender Offer
- Three Key Angles when Hunting Div Arb Setups in the Korean Market
- PointsBet (PBH AU) [Further] Backs MIXI’s Offer, Rejects Betr’s
- [Japan M&A] NTT Docomo Buys Out Carta Holdings (3688) Minorities – Done Deal
Shin Kong (2888 TT)/Taishin (2887 TT) – Short Timer, FX Risk, Index Flows – Time To Buy Vs Peers
- Shin Kong Financial Holding (2888 TT) and Taishin Financial Holding (2887 TT) are scheduled to merge in less than 6 weeks.
- The recent TWD strength has meant sharp losses for Shin Kong Life, but the merger agreement the FSC agreed has Taishin explicitly supporting Shin Kong Life.
- There are near-term flows and technical limitations which make this situation interesting again. Grab your shorts! It could be a bumpy ride!
Nakano Refrigerators (6411 JP): Marunouchi Capital’s JPY7,900 Tender Offer
- Nakano Refrigerators (6411 JP) has recommended a tender offer from Marunouchi Capital at JPY7,900, a 35.0% premium to the last close price.
- The offer is attractive as it represents an all-time high and is above the midpoint of the IFA DCF valuation range.
- An attractive offer and irrevocables (33.19% ownership ratio) pave the way for deal completion. The tender runs from 17 June to 29 July.
Mayne Pharma: No Precedence for a Deal Termination
- Cosette signed a binding agreement to acquire Mayne Pharma (MYX AU) for $7.40 per share.
- Cosette predictably got cold feet and is attempting to terminate the deal, invoking the deal’s material adverse clause.
- Moreover, Cosette has repeatedly failed to quantify its allegations. The extant stock price implies a less than 30% chance of deal closure in spite of having zero precedence for support.
Adriatic Metals (ADT AU)/Dundee Metals (DPM CN): A Burgeoning Balkan Play
- Dual-Listed Adriatic Metals PLC (ADT AU) has announced a cash/scrip Offer from Dundee Precious Metals (DPM CN) with an implied Offer price of A$5.56/share, a 47.8% premium to undisturbed.
- Dundee is offering 0.1590 new Dundee shares per ADT share, plus 93 pence in cash. Roughly a 35:65 cash/scrip split for the Aussie listed line.
- Adriatic is incorporated in the UK so the Offer is being done by a UK Scheme. Irrevocables tally 37.23%. Clean deal.
Telcoware & Shinsung Tongsang Tender Offers: Minority Shareholders Demand Higher Tender Offer Prices
- Telcoware (078000 KS) and Shinsung Tongsang (005390 KS) are two recent tender offers in Korea where the minority shareholders are demanding higher tender offer prices.
- The actual subscription rate of the Telcoware tender offer was only 10.44%, far below the 25.24% targeted by the CEO Keum Han-Tae.
- The Shinsung Tongsang owner family may acquire an additional 7–10% stake via this tender offer, though it remains unclear if they can secure full 95% ownership at this stage.
Santos (STO AU): XRG’s Non-Binding Offer Faces an FIRB Challenge
- Santos Ltd (STO AU) has disclosed a “final” non-binding proposal from the XRG consortium at US$5.76 (A$8.89), a 27.7% premium to the undisturbed price of A$6.96 (13 June).
- The offer is subject to several regulatory approvals. FIRB approval is the primary risk due to a foreign government-controlled entity controlling critical domestic infrastructure assets.
- The offer is attractive compared to peer multiples and historical trading ranges. Retail has a mixed view on the offer, which should not be an issue for the vote.
Ascentech (3565 JP): Orix (8591 JP)’s JPY1,680 Tender Offer
- Ascentech KK (3565 JP) has recommended a tender offer from Orix Corp (8591 JP) at JPY1,680, a 14.6% premium to the last close price.
- Despite the lack of an auction, the offer is reasonable compared to historical trading ranges and aligns with the midpoint of the IFA DCF valuation range.
- Minimum tendering is set at a 66.67% ownership ratio, with irrevocables representing a 27.81% ownership ratio. Management’s significant stakes aid in deal completion.
Three Key Angles when Hunting Div Arb Setups in the Korean Market
- Is the SSF base price automatically adjusted on ex-div day? No — Korea doesn’t mechanically adjust cash or futures base prices on ex-div, keeping dividend arb opportunities alive.
- Could front-month futures flip into contango near ex-div? It’s rare but possible, especially with KRX’s aggressive SSF reshuffles and KOSDAQ Global additions shaking up liquidity and basis volatility.
- Arb plays may arise from Korea’s new 27.5% div tax on payouts over 35%. Ex-div timing and payout uncertainty may create opportunities for dividend arb setups.
PointsBet (PBH AU) [Further] Backs MIXI’s Offer, Rejects Betr’s
- On the 3rd June, MIXI bumped Scheme terms to A$1.20/share; and should the Scheme fail, MIXI was “willing to consider” an off-market takeover at A$1.20/share with a 50.1% acceptance hurdle.
- PointsBet (PBH AU) has now entered a bid implementation deed with MIXI on the off-market Offer, conditional on the Scheme failing; which it will given BETR (BBT AU)‘s 19.9% stake.
- And on Betr? PBH has rejected its Offer, questioning the computation of the synergies, and calling the bid materially below MIXI’s.
[Japan M&A] NTT Docomo Buys Out Carta Holdings (3688) Minorities – Done Deal
- On 16 June 2025, NTT (Nippon Telegraph & Telephone) (9432 JP) sub NTT Docomo and Dentsu Inc (4324 JP) announced Docomo would buy out minorities in Dentsu sub Carta Holdings.
- It’s an OK price, not a great price. But while they are not calculated by advisors, at least the Target Board talks about the value of synergies to minorities.
- The price is light, but the combined irrevocables and large individual shareholders not brought over the wall get this over the line.
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