In today’s briefing:
- Soft99 Corp (4464 JP): Shock and Awe as Effissimo Emerges with a Competing Offer
- HK Connect SOUTHBOUND Flows (To 12 Sep 2025); HUGE Single Stock Trading, ETFs Meh. Tech Bought Bigly
- [Japan M&A/Activism] SOFT99 MBO Sees Activist EffissimoOverbid by 66%! Will This Set New Precedent?
- Merger Arb Mondays (15 Sep) – Santos, Soft99, Technopro, Mandom, Shengjing Bank, Dongfeng Motor
- Shengjing Bank (2066 HK): Offer “Bumped” To A ~84% Disc To NAV From 86.49%
- Curator’s Cut: Critical Minerals’ Rise, SEA’s Digital Promise & IT Services in Flux
- A/H Premium Tracker (To 12 Sep 2025): AH Premia Contract More, Spreads Volatile
- Continental Spin-off (Aumovio) Deep Dive
- Weekly Update (Aumovio, WBD, LION)
Soft99 Corp (4464 JP): Shock and Awe as Effissimo Emerges with a Competing Offer
- On 12 September, Kyodo News reported that Effissimo Capital Management will launch a competing tender offer for Soft99 Corp (4464 JP) at JPY4,100, 66.3% higher than the JPY2,465 MBO offer.
- The Effissimo offer structure has been designed to shine an unflattering spotlight on the MBO low-ball offer and to prevent management from privatising Soft99.
- The management has several options to respond. The initial play will likely be to lean on the special committee to question the feasibility of the Effissimo bid.
HK Connect SOUTHBOUND Flows (To 12 Sep 2025); HUGE Single Stock Trading, ETFs Meh. Tech Bought Bigly
- Gross SOUTHBOUND volumes just under US$20+bn a day this past 5-day week. BIG Net buying. Big BABA trading.
- SOUTHBOUND investors traded US$9bn of Alibaba (9988 HK) in the week. Not shy. It was a big net buy as well (4 of 5 days was +US$500mm or more).
- The data tables below update on a daily basis in the Tools section of Smartkarma. The SOUTHBOUND Flow Monitor and AH Pairs Monitor are both there for all SK readers.
[Japan M&A/Activism] SOFT99 MBO Sees Activist EffissimoOverbid by 66%! Will This Set New Precedent?
- In early August, the founder-family announced they would MBO the car care company Soft99 Corp (4464 JP). It was a very cheap MBO. Even 20% higher it would be cheap.
- On Saturday, Kyodo, followed by various other media outlets, announced activist Effissimo Capital Management had announced a TOB to buy the company saying the MBO was “an extremely low level.”
- The Nikkei-reported goal would be “to protect the interests of minority shareholders while ensuring medium- to long-term increases in corporate value.” This is REALLY BIG NEWS.
Merger Arb Mondays (15 Sep) – Santos, Soft99, Technopro, Mandom, Shengjing Bank, Dongfeng Motor
- I 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: Soft99 Corp (4464 JP), Mayne Pharma (MYX AU), Smart Share Global (EM US), Shengjing Bank Co Ltd H (2066 HK), Dongfeng Motor (489 HK), ENN Energy (2688 HK).
- Lowest spreads: Bright Smart Securities (1428 HK), Pacific Industrial (7250 JP), Humm Group (HUM AU), Mandom Corp (4917 JP), Ainsworth Game Technology (AGI AU), PointsBet Holdings (PBH AU).
Shengjing Bank (2066 HK): Offer “Bumped” To A ~84% Disc To NAV From 86.49%
- Back on the 26th August, troubled rural commercial bank Shengjing Bank Co Ltd (2066 HK) announced a HK$1.32/Share Offer, a 15.79% premium to undisturbed, and a 86.49% discount to NAV.
- Clearly not all is well with Shengjing Bank. And alternatives to the low-balled Offer are slim on the ground.
- The Offeror has now bumped terms to HK$1.60 (best & final). That’s a 40.5% premium to undisturbed, but still a 83.96% discount to NAV.
Curator’s Cut: Critical Minerals’ Rise, SEA’s Digital Promise & IT Services in Flux
- Welcome to Curator’s Cut, a fortnightly roundup of standout themes from the 1,000+ Insights published over the past two weeks on Smartkarma
- In this cut, we review the global focus on critical minerals, how ASEAN’s digital economy can grow amidst political uncertainty, and how IT services have fared with AI
- Want to dig deeper? Comment or message with the themes you’d like to see highlighted next
A/H Premium Tracker (To 12 Sep 2025): AH Premia Contract More, Spreads Volatile
- “Beautiful Skew” slightly visible but not huge, not consistent.On average, liquid Hs outperformed their As by 1.99% so +2.79% over 2 weeks.
- Last week’s long reco on China Communications Construction (1800 HK) gained just over 1% on the week in Hs and the H outperformed the A by 0.6% Friday to Friday.
- The data tables below update on a daily basis in the Tools section of Smartkarma. The SOUTHBOUND Flow Monitor and AH Pairs Monitor are both there for all SK readers.
Continental Spin-off (Aumovio) Deep Dive
- Continental (XTRA: CON) is set to spin off its automotive business, Aumovio, on September 18, 2025.
- The business, which has historically operated with low margins and modest growth, is currently undergoing a turnaround.
- I estimate Aumovio’s fair value at approximately €56 per share and believe the stock could present an attractive opportunity if it trades down meaningfully following the spin-off.
Weekly Update (Aumovio, WBD, LION)
- Next week, Continental (CON) will spin off its auto parts business, Aumovio, as a public company.
- The first day of regular trading will be September 18, 2025. Shareholders will receive one share of Aumovio for every two shares of Continental.
Aumovio is in the midst of a turnaround, and I was initially skeptical of managements rosy guidance.
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