In today’s briefing:
- Taiyo Holdings (4626 JP): An Impending KKR Takeunder?
- Merger Arb Mondays (22 Dec) – Dongfeng, Jinke, ANE, ENN, Makino, Pacific Ind, Raksul, Toyota Ind
- A/H Premium Tracker (Wk to 19 Dec 2025): Hs Underperform Again, Beautiful Skew Behaving Badly
- HK Connect SOUTHBOUND Flows (Wk To 19 Dec 2025) – Lower Activity, Net Buying, but High-Div SOEs Sold
- Weekly Update (MICC, 3134, 441A)
Taiyo Holdings (4626 JP): An Impending KKR Takeunder?
- On 19 December, Bloomberg reported that KKR has emerged as a frontrunner to privatise Taiyo Holdings (4626 JP), but “the tender offer price may be lower than the current price.”
- Since the first Bloomberg article on 27 May, Taiyo’s shares are up 84% vs. the median peers’ shares, which are up 62%. Therefore, the shares reflect some takeover premium.
- Based on the medium-term management plan, which is likely KKR’s base case, I estimate a tender offer of around JPY4,624, 1.2% below the last close.
Merger Arb Mondays (22 Dec) – Dongfeng, Jinke, ANE, ENN, Makino, Pacific Ind, Raksul, Toyota Ind
- 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: Smart Share Global (EM US), Dongfeng Motor (489 HK), ENN Energy (2688 HK), Jinke Smart Services (9666 HK), Humm Group (HUM AU), Qube Holdings (QUB AU).
- Lowest spreads: Bright Smart Securities (1428 HK), Mandom Corp (4917 JP), Toyota Industries (6201 JP), Pacific Industrial (7250 JP), Ainsworth Game Technology (AGI AU), Hainan Meilan International Airport (357 HK).
A/H Premium Tracker (Wk to 19 Dec 2025): Hs Underperform Again, Beautiful Skew Behaving Badly
- Hs within the liquid AH pair universe UNDER-performed As on average by 0.87%. Beautiful Skew behaved BADLY. Spreads were a bit all over the place.
- Quiddity H/A Portfolio performance slightly positive (+11-13bp). Low H/A “beta” helps. Stay the Beautiful Skew course.
- The data tables below update daily in the Tools section of Smartkarma. The Southbound Flow Monitor and AH Pairs Monitor are both there – free for all SK readers.
HK Connect SOUTHBOUND Flows (Wk To 19 Dec 2025) – Lower Activity, Net Buying, but High-Div SOEs Sold
- HK$82bn+/Day of gross SOUTHBOUND activity last week vs HK$90+bn the week before. Gross flows are winding down. Net rebounded to +HK$16bn.
- Relatively high div low vol SOEs were net sold. Again. This is getting heavy. It matters because some have less international buying support (they are Trump military names).
- The data tables below update daily in the Tools section of Smartkarma. The Southbound Flow Monitor and AH Pairs Monitor are both there – free – for all SK readers.
Weekly Update (MICC, 3134, 441A)
Unilever (UL) spun off the Magnum Ice Cream Company (MICC) on December 8, 2025.
Shareholders and ADS holders received one Magnum Share for every five Unilever Shares or Unilever ADS.
The stock opened at $14.50 and has performed surprisingly well in its first couple weeks of trading.
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