In today’s briefing:
- HSBC (5 HK)’s Fair Offer for Hang Seng (11 HK)’s Minorities
- [Japan Event] Sony Financial (8729 JP) Moves On From ToSTNeT-3 Buybacks, Now In the Market
- Vietnam: Global Index Inclusion & Passive Flows
- [Japan ECM] Kokusai Elec (6525) – Applied Materials $330mm Selldown
- [Japan Activism] Sun Corp (6736) Gets ANOTHER Public Activist – ValueAct Reports 7.9%
- Hang Seng Bank (11 HK): HSBC (5 HK)’s Scheme Privatisation Is a Done Deal
- Soft99 Corp (4464 JP): Potential Outcomes as the Board Responds to Effissimo Allegations
- [Japan M&A/Activism] Soft99 Board Rebuts Effissimo’s Rebuttal. Still An Awful “Fiduciary” Response
- Quiddity Leaderboard Hang Seng Index Dec25: BeOne, Innovent, & Other Potential Surprises
- Innoscience Suzhou Tech Placement – Selling Ahead of Lockup Expiry, Relatively Small
HSBC (5 HK)’s Fair Offer for Hang Seng (11 HK)’s Minorities
- Hang Seng Bank (11 HK) has announced an Offer from controlling parent (63.3551%), HSBC Holdings (5 HK), by way of a Scheme, in a HK$106bn (US$13.6bn) deal.
- The Scheme Consideration is HK$155/share, a 30.3% premium to last close. The price is final. A “third interim dividend” will be added. Optically, the price is bang on.
- The long stop for conditions is the 30th September 2026. I think this transaction can be wrapped up in around five months.
[Japan Event] Sony Financial (8729 JP) Moves On From ToSTNeT-3 Buybacks, Now In the Market
- Sony Financial Group (8729 JP) started ToSTNeT-3 buybacks last week and did one this week to jumpstart the buyback, cushioning the Nikkei 225 deletion on 29 Sep and subsequent overhang.
- In three ToSTNeT-3 buybacks in 6 trading days spending ¥28.9bn, the company bought back 177.513mm shares or 2.5% of shares out, or about 6.2% of Max Real World Float (MRWF).
- With ¥71.1bn left, at last that’s 460mm shares, or 16.2% of MRWF. Over 10mos that is 1.62%/month. That will boost Mar26 DPS, Mar27 DPS projections, EPS, etc.
Vietnam: Global Index Inclusion & Passive Flows
- After years of being on the watchlist, Vietnam will be added to a global index in September 2026 as long as progress is made on one key issue.
- The final decision will be made in March 2026, and the implementation of the inclusion will take place in phases.
- We currently see 21 stocks meeting the inclusion criteria. There are others that are close to the inclusion thresholds, and the list will change over the next few months.
[Japan ECM] Kokusai Elec (6525) – Applied Materials $330mm Selldown
- Three weeks ago I wrote that KKR’s lockup would expire about now in [Japan ECM] Kokusai Elec (6525) – KKR’s Lock Up Expiry in 3 Weeks – $700mm Clean-Up Coming?
- Today post-close, Applied Materials (AMAT US) announced a 10.7mm share (4.5%) Accelerated Block Offering to be priced tomorrow morning, at an indicated 4.5-6.5% discount. This would put them at 10+%.
- This should be very well taken up. There is index demand on the follow. The question is more about the unwind of KKR’s last bit. Perhaps to come soon?
[Japan Activism] Sun Corp (6736) Gets ANOTHER Public Activist – ValueAct Reports 7.9%
- Today after the close, Value Act reported that it owned 7.87% of shares outstanding in Sun Corp (6736 JP) and it may make proposals to management.
- This has been trading cheaply (and I pointed it out on 13 Aug and 12 Sep). Cellebrite DI (CLBT US) is up 35% in those 8 weeks. Sun Corp +50%.
- ValueAct had owned 4.9+% for at least a few months before, but now it has gone public. They were likely in already under a different name in March, now public.
Hang Seng Bank (11 HK): HSBC (5 HK)’s Scheme Privatisation Is a Done Deal
- Hang Seng Bank (11 HK) announced a scheme privatisation offer from HSBC Holdings (5 HK) at HK$155, a 30.3% premium to the undisturbed price.
- Based on an estimated 2025 third dividend of HK$1.3 per share, the total consideration is HK$156.30 per share. The offer price is final.
- The offer is attractive compared to peer multiples and historical trading ranges. At the current price and for a late March payment, the gross/annualised spread is 2.9%/6.2%.
Soft99 Corp (4464 JP): Potential Outcomes as the Board Responds to Effissimo Allegations
- The Soft99 Corp (4464 JP) Board has responded to Effissimo’s allegations. As expected, the Board accuses Effissimo of stating half-truths.
- The Board’s missive indirectly suggests that incremental acceptances since October 1 have been tepid, KeePer has not tendered, and the MBO is struggling to meet the minimum tendering condition.
- The two likeliest outcomes are 1) the MBO succeeds at current terms with KeePer likely joining BidCo, and 2) both offers fail. The risk/reward is unattractive at the last close.
[Japan M&A/Activism] Soft99 Board Rebuts Effissimo’s Rebuttal. Still An Awful “Fiduciary” Response
- Today after the close, Soft99 Corp (4464 JP)‘s Board issued a statement on “Our View” of Effissimo’s “Our View” Press Release. It’s bad.
- But it points out the “weaknesses” that Effissimo’s Tender Offer Press Release had as it concerns a counterbid. And that tells you how Effissimo should amend their Tender Offer docs.
- Soft99 Board’s response is interesting. It asks Effissimo to not be coercive (i.e. bid for 50%+) in response to the MBO Bid’s coerciveness. Not a winning argument but not impossible.
Quiddity Leaderboard Hang Seng Index Dec25: BeOne, Innovent, & Other Potential Surprises
- The Hang Seng Index is the benchmark index for Hong Kong stocks. It follows a highly-subjective selection process which makes it difficult to predict index changes.
- In this insight, we take a look at a group of names with reasonably high likelihood of being involved in index changes during the next review in December 2025.
- The index changes are expected to be confirmed on 21st November 2025.
Innoscience Suzhou Tech Placement – Selling Ahead of Lockup Expiry, Relatively Small
- InnoScience Suzhou Technology (2577 HK) aims to raise around US$200m in its Hong Kong placement.
- Innoscience was only listed in Dec 2024 and it undertook another primary raising in July 2025, the lockup for which has yet to expire.
- In this note, we will talk about the placement and run the deal through our ECM framework.
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