In today’s briefing:
- “Tiny Win for Guess The Ratio” Aeon (8267) Pays a SMALL Premium for Aeon Mall (8905)
- Aeon Mall (8905 JP): Aeon (8267 JP)’s Share Exchange Ratio Is Set
- Merger Arb Mondays (14 Apr) – ESR, Fengxiang, Vesync, Goldlion, Shibaura, Tsuruha/Welcia, Aeon Mall
- NSE NIFTY50/ Vol Update / Risk Premia Catches up with Global Counterparts in Spite of Truncated Week
- Kospi Index Options Weekly (Apr 07 – 11): Skew Shifts Steepens and Positioning Signals
- Nikkei Index Options Weekly (Apr 07 – 11): Vol Spikes, Skew Steepens, Macro Shifts Unfold
“Tiny Win for Guess The Ratio” Aeon (8267) Pays a SMALL Premium for Aeon Mall (8905)
- In an announcement after the close Friday 11 April, Aeon Co Ltd (8267 JP) and AEON Mall (8905 JP) announced their merger ratio, and timing.
- The ratio is 0.65 to 1.0, meaning Aeon Mall shareholders don’t get a lot of credit for their real estate. The timing is short-dated. The AGM is end-May. Merger July1.
- This may be a tad light, but it is a done deal. Active shareholder base is almost all retail and crossholders+dom passive gets Aeon to 70%.
Aeon Mall (8905 JP): Aeon (8267 JP)’s Share Exchange Ratio Is Set
- AEON Mall (8905 JP) announced a share exchange offer by Aeon Co Ltd (8267 JP) at 0.65 Aeon shares per Aeon Mall share, a 30.9% premium to the undisturbed price.
- The share exchange ratio is reasonable compared to historical price ratios and IFA valuation ranges. The implied offer multiple is attractive compared to peer multiples.
- Aeon’s 58.16% shareholding ensures that Aeon Mall’s vote on 22 May is low-risk. The share exchange’s effective date is 1 July.
Merger Arb Mondays (14 Apr) – ESR, Fengxiang, Vesync, Goldlion, Shibaura, Tsuruha/Welcia, Aeon Mall
- We 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: ENN Energy (2688 HK), Insignia Financial (IFL AU), Oneconnect Financial Technology (6638 HK), Shandong Fengxiang (9977 HK), Seven & I Holdings (3382 JP), Smart Share Global (EM US).
- Lowest spreads: Shibaura Electronics (6957 JP), Sinarmas Land (SML SP), Millennium & Copthorne Hotels Nz (MCK NZ), Makino Milling Machine Co (6135 JP), Spartan Resources (SPR AU).
NSE NIFTY50/ Vol Update / Risk Premia Catches up with Global Counterparts in Spite of Truncated Week
- Risk premia in Nifty50 Options catches up with Global Markets as IVs spike from sub-12% to 24% – levels last seen during 2024 National Elections.
- Vol-Regime switches from “Low & Up” state to “High & Up”. Term-structure swings into Backwardation. Front-end risk premiums elevated in spite of truncated upcoming week.
- Tactical Implications: (1) Use IV-spike to flatten +ve Vega exposure. (2) Avoid -ve Gamma, Vol harvesting structures. (3) Front-end/ Back-end Calendars recommended as extreme curve inversion expected to normalize.
Kospi Index Options Weekly (Apr 07 – 11): Skew Shifts Steepens and Positioning Signals
- Price action was volatile this week, marked by two large moves and a notable pickup in vol of vol.
- We examine the material steepening of skew observed over the course of the week.
- USD/KRW broke its recent range, reinforcing signs that USD assets may be losing their traditional flight to quality appeal.
Nikkei Index Options Weekly (Apr 07 – 11): Vol Spikes, Skew Steepens, Macro Shifts Unfold
- Both Nikkei and USD/JPY re-tested levels last seen in early August, with Nikkei implied vols surging.
- Beyond tariffs, we explore what may become the dominant driver of market movements in the weeks ahead.
- Skew steepened materially; we examine how open interest at current spot levels could shape the spot-vol relationship going forward.
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