In today’s briefing:
- BHP Unification – Trading and Spread Update
- HDN/AVN Merger & Potential ASX200 Inclusion in March (Or Earlier)
- Kakao Bank Six-Month Lock-Up – Over US$2.5bn Stock Release Will Only Add to the Recent Rout
- Hitachi Transport System (9086) – Not a Clear Outcome But Interesting Possibilities
- KOSPI Overhang Stocks: Krafton, Kakao Bank, SKIET, Samsung Elec, & Samsung SDS
BHP Unification – Trading and Spread Update
- The spread on the BHP PLC/Limited arbitrage has widened as stock borrow on the AU line has dried up ahead of the ex-date for the General Meeting
- An analysis of the shareholder register of BHP Group PLC suggests that BHP has mis-underestimated the passive ownership of PLC by a lot.
- All told, on a NET basis, the 28th of January is likely to be a US$40bn index event (two way, both names, both funding trades). Another $10-15bn rolls within index.
HDN/AVN Merger & Potential ASX200 Inclusion in March (Or Earlier)
- Aventus Group (AVN AU) securityholders vote on the proposed merger with HomeCo Daily Needs REIT (HDN AU)/ Home Consortium Ltd (HMC AU) on 25 January.
- If approved, Aventus Group (AVN AU) will stop trading after the close on 3 February and the shares in issue for HomeCo Daily Needs REIT (HDN AU) will increase substantially.
- That will make HDN AU the highest ranked non-ASX200 constituent and a high probability add for March. There could be an earlier inclusion to replace SYD AU in the index.
Kakao Bank Six-Month Lock-Up – Over US$2.5bn Stock Release Will Only Add to the Recent Rout
- Kakao Bank’s six month IPO lock-up will end on 6th Feb 2022.
- It will result in freeing up another US$2.5bn+ worth of shares held by a number of pre-IPO and local IPO investors.
- In this note, we will talk about the upcoming lock-up expiry.
Hitachi Transport System (9086) – Not a Clear Outcome But Interesting Possibilities
- Hitachi is, as the media fuss suggests, in the last stages of its re-formation after ridding itself of nearly two-dozen listed subs over the last decade-plus.
- Hitachi Transport System (9086) is the last major sub/affiliate without a new home. Hitachi owns just under 40%. SG Holdings (9143 JP) owns just under 10%. Both want to sell.
- It is not clear HTS wants to be taken private, but there could be an interesting financial engineering solution to suit the sellers.
KOSPI Overhang Stocks: Krafton, Kakao Bank, SKIET, Samsung Elec, & Samsung SDS
- For Kakao Bank, the 6M IPO lockup (2.79%) will hit the market. Also, the possibility that the 4.48% stake held by Anchor/TPG will hit the market should be left open.
- In Krafton’s case, Tencent is the most notable player, owning 13.56%. It recently suggested a reduction in overseas holdings. So, some of this 13.56% stake should appear in the market.
- The 4.84% stake held by Premier Superior is available after February 14. Samsung Electronics and Samsung SDS shares by the Samsung family are also likely to take place in February.
Before it’s here, it’s on Smartkarma
