In today’s briefing:
- ASX200 Index AdHoc Rebalance Preview: Potential Replacement for Spartan Resources (SPR AU)
- GMO Internet (4784) – Shares Appear Manipulated/Squeezed (Again), but ParentCo MUST SELL
- LQ45 Index Rebalance Preview (Jul 2025): Identifying Potential Index Changes
- [Japan M&A] Polaris MBO for DD Group (3073) – Too Light But Probably a Done Deal
- [Quiddity Index] Van Eck Gold Miners ETF (GDX) – Benchmark Change for Sep Rebal – $2.8bn One Way
- SM Investments Placement: Large Deal to Digest
- StubWorld: Absent Borrow, GMO Internet (4784) Is An Avoid
- US Inflation Creeps In Quietly
- ZEEKR (ZK US): Geely Auto’s Binding Offer a Done Deal
- Synopsys’ $35 Billion Acquisition of Ansys Closing: Major Index Changes Triggered
ASX200 Index AdHoc Rebalance Preview: Potential Replacement for Spartan Resources (SPR AU)
- There will be an ad hoc inclusion for the S&P/ASX 200 (AS51 INDEX) at the close on 22 July following Spartan Resources (SPR AU)‘s acquisition by Ramelius Resources (RMS AU).
- There are a couple of stocks that are trading neck and neck on average free float market cap and one of them is likely to be added to the index.
- Both stocks have seen a big increase in cumulative excess volume over the last few weeks, indicative of positioning in the stock.
GMO Internet (4784) – Shares Appear Manipulated/Squeezed (Again), but ParentCo MUST SELL
- GMO Internet (4784 JP) was squeezed after a merger which was a Reverse Takeover followed by a ridiculous TOPIX inclusion. Then the parent tried an offering, which failed.
- The clearing price demanded was WAAAY lower so the offering was pulled. Shares fell 70%, then bounced 65%. Now 48x book and 66x EBITDA for an ISP. Super expensive. Manipulated.
- ParentCo needs to sell 90mm shares ASAP. The only clean way is through a liquidation trust to get shares lower before a larger offering.
LQ45 Index Rebalance Preview (Jul 2025): Identifying Potential Index Changes
- The review period for the LQ45 Index July rebalance ended on 30 June. The changes should be announced later in two weeks, becoming effective after the close on 31 July.
- We highlight 2 potential inclusions and 2 potential exclusions for the index at the rebalance, though there is a possibility that there are no constituent changes.
- Both potential inclusions will have over 2x ADV to trade from passive trackers and the flow is significant for one stock.
[Japan M&A] Polaris MBO for DD Group (3073) – Too Light But Probably a Done Deal
- Diamond Dining (3073 JP) (DD Group) head Matsumura-san appears to be getting out in this Polaris MBO for the dining group.
- The premium is low, and the the price is probably light, but there are a couple of small things which mean it isn’t quite as light as it might look.
- But the company prints cash, so yeah, it’s light. This should probably be a bit better, but F&B is a fickle business.
[Quiddity Index] Van Eck Gold Miners ETF (GDX) – Benchmark Change for Sep Rebal – $2.8bn One Way
- The VanEck Gold Miners ETF/USA (GDX US) announced last month it would change its benchmark for the September rebalance, to the Market Vectors Global Gold Miners Index.
- That means name changes based on methodology and universe changes. So we introduce coverage of the index, its rebalances, and the big flow in September.
- We also add in cross flows from the MV Junior Gold Miners Index, offer spreadsheets, flow tables, leaderboards for the GDX index. Lots of data here.
SM Investments Placement: Large Deal to Digest
- An undisclosed seller is looking to raise US$142m via selling some/all of their stake in SM Investments (SM PM).
- The deal is a large one to digest, representing 33.1 days of the stock’s three month ADV, and 0.7% of total shares outstanding.
- In this note, we will talk about the placement and run the deal through our ECM framework.
StubWorld: Absent Borrow, GMO Internet (4784) Is An Avoid
- GMO Internet (4784 JP) stays listed if/when GMO Internet Group (9449 JP) sells (a lot of) shares. Yet 4784 remains stubbornly – manipulated (?) – at nosebleed valuations.
- Preceding my comments on the GMO group – and Dah Sing Financial (440 HK) and Axiata Group (AXIATA MK) – are the current setup/unwind tables for Asia-Pacific Holdcos
- Hese relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.
US Inflation Creeps In Quietly
- Rebounding headline and core US inflation in June understated the underlying growth, with shelter rising at its slowest pace since August 2021. Tariff pain crept in belatedly.
- Commodities, less food, energy and car prices grew by 0.3% m-o-m, the fastest since Feb-23, and services (ex-shelter) hit 0.4% m-o-m, both inconsistent with the target.
- Less than half of the post-election surge in expectations has survived so far. Further rises remain likely, even if sustained avoidance smooths and reduces the full impact.
ZEEKR (ZK US): Geely Auto’s Binding Offer a Done Deal
- ZEEKR (ZK US) has entered into a definitive merger agreement with Geely Auto (175 HK) at US$26.87 per ADS or 12.3 newly issued Geely shares. The cash offer increased by 4.7%.
- The proposal is conditional on regulatory approvals (low risk, as Zeekr is a subsidiary of Geely), as well as approval from Zeekr’s shareholders and Geely’s independent shareholders.
- The Zeekr shareholder vote is a formality as Geely and undertakings exceed the two-thirds voting threshold. The Geely vote is low risk due to the low takeover premium.
Synopsys’ $35 Billion Acquisition of Ansys Closing: Major Index Changes Triggered
- The merger between Synopsys Inc (SNPS US) and Ansys Inc (ANSS US) marks a major industry milestone, having overcome extended regulatory hurdles, including a delayed approval from Chinese authorities.
- Ansys Inc (ANSS US) shareholders will receive $197 cash plus 0.3450 Synopsys Inc (SNPS US) shares per Ansys Inc (ANSS US) share, valuing the deal at about $35 billion.
- The merger is expected to significantly impact major U.S. indexes, triggering intra-quarter replacements and substantial passive fund flows.
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