In today’s briefing:
- AU Small Finance Bank (AUBANK IN): Increased FOL & Large Passive Flows/ Impact
- Toyota Industries (6201 JP): Elliott Ramps up the Pressure
- Hynix & Square L2 Flags Set to Squeeze Spread Near Term
- [Japan M&A] CEO & Chairman Entice GS to Sponsor an MBO for Recently Lackluster Raksul (4384)
- Raksul (4384 JP): GS-Sponsored MBO at JPY1,710
- Meilan Airport (357 HK)’s SPA (Finally) Done. Now For The HK$10.62/Share MGO
- Predictive (PDI AU) & Robex (RBX AU) Together Again
- NIFTY200 Momentum30 Index Rebalance: Huge Turnover and Flow in December
- KOSPI200 Index Rebalances – A Year in Review (2025)
- Predictive Discovery (PDI AU): Is Robex’s Revised Offer Really a Superior Proposal?
AU Small Finance Bank (AUBANK IN): Increased FOL & Large Passive Flows/ Impact
- AU Small Finance Bank Limited (AUBANK IN) has received approval from the Ministry of Finance to increase its Foreign Ownership Limit from 49% to 74% (the maximum permitted).
- The increased FOL will result in passive inflows from global index trackers in February and March. The inflows are multiple days of ADV.
- There has been little increase in positioning. The increased Foreign Ownership Limit and the passive flows to come could lead to the stock moving higher over the next few weeks.
Toyota Industries (6201 JP): Elliott Ramps up the Pressure
- Elliott has filed a substantial shareholder notice reporting a Toyota Industries (6201 JP) ownership of 16.3 million or 5.01% of outstanding shares.
- The disclosure is likely a tactic to pressure Toyota Fudosan (offeror) and also a useful signalling tactic to other minorities that Elliott is committed to securing a bump.
- A potential bump could reach JPY19,000. While this would require an additional US$4 billion, financing should not be an issue as the book value (understated) is close to JPY18,000.
Hynix & Square L2 Flags Set to Squeeze Spread Near Term
- SK Hynix and SK Square hit L2 flags; cash-only until Dec 24. Margin off, >40% two-day rip triggers halt. L2 lifts if below T-5/+45%, T-15/+75%, and 15-day high.
- L2’s usually a non-event, but this time the margin freeze probably smacks Hynix harder. Key trigger is staying below the 15-day high: Hynix ₩587,000, Square ₩324,000.
- Govt set to roll out AI-semiconductor holdco deregulation this week, boosting AI holdcos like Square and juicing a near-term Square-over-Hynix trade opportunity.
[Japan M&A] CEO & Chairman Entice GS to Sponsor an MBO for Recently Lackluster Raksul (4384)
- Raksul Inc (4384 JP) is a business roll-up business. They do printing, and advertising, and marketing, and supply. They want to be all things to all SMEs.
- They are pretty good at it. Revenues and EBIT have been growing at 20-30% a year for years, and are scheduled to grow 19% and 26% for several years ahead.
- The bid is up 40% from last, but that gets them to a 30-month high. The register is very open. Lots of active institutional shareholders who have to agree. Maybe.
Raksul (4384 JP): GS-Sponsored MBO at JPY1,710
- Raksul Inc (4384 JP) has recommended a Goldman Sachs Group (GS US)-sponsored MBO at JPY1,710, a 39.5% premium to the last close.
- While the process is lacking (no auction), the offer is reasonable compared to peer multiples, analyst price targets and historical trading ranges.
- The offer aligns with the midpoint of the target IFA DCF valuation range. Barring an emergence of an activist, this should get done.
Meilan Airport (357 HK)’s SPA (Finally) Done. Now For The HK$10.62/Share MGO
- Given the change of control into Meilan Airport (357 HK), was, in effect, a re-arrangement of Meilan Airport shares under the same ultimate parent, the regulatory approval process curiously dragged.
- Yesterday Meilan Airport announced all SPA conditions have now been satisfied, and that the SPA should complete in 20 business days. A Composite Doc will then be issued.
- Trading almost at terms. This is a back-end proposition play. My peer basket is up 11%, on average, since the Offer was first announced. Asian peers are up 15%.
Predictive (PDI AU) & Robex (RBX AU) Together Again
- After Perseus Mining (PRU AU) fielded a scrip option for 17.8%-held Predictive Discovery (PDI AU), I questioned whether Robex Resources (RXR AU) would exercise its matching rights. I was wrong.
- Robex has “lifted its bid“, now 7.862 PDI for every Robex share. Under the revised Offer Robex will own 46.5% of the combined entity, down from 49%.
- PDI considers the new terms to be superior to Perseus’ tilt. Apparently, so do several of PDI’s largest shareholders. Perseus has now terminated its binding proposal. Out of the picture?
NIFTY200 Momentum30 Index Rebalance: Huge Turnover and Flow in December
- There will be 19 constituent changes for the Nifty200 Momentum 30 Index that will be implemented at the close on 30 December.
- Estimated one-way turnover is 64.6% resulting in a round-trip trade of INR 161.3bn (US$1.8bn). There are 27 stocks with over 1x ADV to trade.
- Some stocks will have passive flows from other index trackers at the same time while others are potential adds/close adds to global indices over the next couple of months.
KOSPI200 Index Rebalances – A Year in Review (2025)
- In this insight, we discuss the price performance actions of 32 stocks that have been rebalanced in KOSPI200 in 2025.
- Among the 16 additions to the KOSPI200 index in 2025, the average share price performances are up on average 19.5% (3 months performance prior to the announcement dates).
- Among the 16 deletions to the KOSPI200 index in 2025, the average share price performances are down on average 13.5% (3 months performance prior to the announcement dates).
Predictive Discovery (PDI AU): Is Robex’s Revised Offer Really a Superior Proposal?
- Under the revised merger terms, Robex Resources (RBX CN) shareholders would receive 7.862 Predictive Discovery (PDI AU) shares per Robex share (vs 8.667 previously). PDI shareholders get 53.5% of MergerCo.
- The Board has declared that Robex’s offer is superior to the Perseus scheme’s offer. Strangely, on a value basis, the Robex revised offer is still lower than the Perseus offer.
- Robex’s offer is mainly superior due to support from major PDI shareholders, who reportedly oppose a Perseus Mining (PRU AU) scheme, thereby lowering the likelihood of a revised Perseus offer.
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