In today’s briefing:
- Tata Motors (TTMT IN) Demerger: Interesting Index Implications
- Dongfeng Motor (489 HK): VOYAH Listing Docs Underscore the Upside
- [Japan M&A] Pacific Industrial (7250) The MBO Is Extended After Effissimo Buys Above Terms
- HSCI Index Rebalance Preview: Potential Inclusions in December
- Advantest (6857 JP): Rally Leads to Potential NKY Capping
- Dongfeng (489 HK): On VOYAH’s Updated Financials
- [Japan Activism] Mandom (4917 JP) MBO Sees Murakami Pushing Harder, Now at 16.59%
- HEM: Oct-25 Views & Challenges
- [Quiddity Index] Oct25 KOSPI 200 Leaderboard for Dec25 Rebal: Still 6+6, New 1.5 Pairs to Trade
- Predictive/Robex’s Merger Of Equals
Tata Motors (TTMT IN) Demerger: Interesting Index Implications
- Tata Motors (TTMT IN) is demerging the company into two separate listed entities that will focus on the Passenger Vehicle business and the Commercial Vehicle businesses.
- Based on the estimated valuation for the two entities, both stocks will continue to remain in the MGlobal Index and the FGlobal Index.
- NIFTY and SENSEX trackers will need to sell their Commercial Vehicle business holdings soon after listing. There could be selling in the Passenger Vehicle business holdings at a later rebalance.
Dongfeng Motor (489 HK): VOYAH Listing Docs Underscore the Upside
- On 22 August, Dongfeng Motor (489 HK) disclosed a pre-conditional privatisation by merger by absorption by Dongfeng Motor Corporation, along with a proposed distribution and listing of VOYAH shares.
- The VOYAH application proof, filed on 2 October, points to strong fundamentals and suggests that the appraised value of VOYAH and the offer are conservative.
- Based on the data points from the application proof, I calculate that the implied offer is HK$12.11-12.25 per H Share, a 11.6%-12.9% premium to the appraised value of HK$10.85.
[Japan M&A] Pacific Industrial (7250) The MBO Is Extended After Effissimo Buys Above Terms
- Activist-Ish-Y investor Effissimo reported Friday they had a 6.68% stake as of the end of August.
- Their average price is ¥2,253 which is 10% through the price the family Bidco was bidding (¥2,050).
- As this hasn’t traded below terms at any point since announcement, an extension was likely. This morning, we got one. We’ll get another one before it’s done, BUT…
HSCI Index Rebalance Preview: Potential Inclusions in December
- In a pick-up in primary market activity, there have been 25 new listings on the Main Board of the HKEX (388 HK) in Q3.
- Zijin Gold (2259 HK) will be added to the HSCI after market close on 15 October and should be added to Southbound Stock Connect from the open on 27 October.
- There could be 4 (maybe 5) additions to the HSCI Index in December and 3 of those stocks will be added to Southbound Stock Connect from the open 8 December.
Advantest (6857 JP): Rally Leads to Potential NKY Capping
- Advantest Corp (6857 JP)‘s weight in the Nikkei 225 (NKY INDEX) has crossed 10% and staying there will lead to capping at the March rebalance.
- A lot of Advantest Corp (6857 JP)‘s float is held by passive trackers, and the real float is much lower. The capping will increase that float significantly.
- Advantest Corp (6857 JP) has outperformed its peers significantly and trades at higher valuation metrics compared to its peers.
Dongfeng (489 HK): On VOYAH’s Updated Financials
- On the 22nd August 2025, SOE-backed Dongfeng Motor (489 HK) announced a privatisation; together with a concurrent listing of its EV arm, VOYAH.
- Dongfeng has now released the application proof for VOYAH, with finances through to July 2025. Of interest, VOYAH is in the black for 7M25.
- The market is implying a price-to-trailing-sales of 1.5x for VOYAH versus the basket average of 2.1x.
[Japan Activism] Mandom (4917 JP) MBO Sees Murakami Pushing Harder, Now at 16.59%
- Four weeks ago, CVC announced a family-led MBO of hair care and cosmetics company Mandom Corp (4917 JP) at a price which was decidedly too light, well below company plans.
- One activist wrote a letter clearly calling them out for accepting a low-ball price well below the Medium Term Management Plan target. Another bought a lot of shares.
- On 25 September, Murakami-san and affiliates reported an 8.39% position. Seven trading days later it is 16.59% and the shares are up small from my last piece + 1.
HEM: Oct-25 Views & Challenges
- Hawkish inflation and policy rate pricing shifts toward our UK/EA view did not stop US rates frontloading more cuts.
- We still see markets overpricing easing, with UK inflation expectations stuck above target, and neutral rates high.
- A break in activity data, especially unemployment, and underlying price/wage inflation, would threaten our view.
[Quiddity Index] Oct25 KOSPI 200 Leaderboard for Dec25 Rebal: Still 6+6, New 1.5 Pairs to Trade
- KOSPI 200 is a Korean blue-chip index that tracks the 200 largest and most-liquid names listed in the KOSPI section of the Korea Exchange (KRX). It’s popular.
- 87% of the reference period for the December 2025 rebal is complete. We see up to 6 ADDs and 6 DELs. Obvious ADD vs Downweight trades have not worked recently.
- Of the “1.5 pairs” I liked last time which worked fundamentally, both are down hard. Trades here are rotated.
Predictive/Robex’s Merger Of Equals
- The gold rush continues as Predictive (PDI AU) and Robex (TSX-V: RBX, ASX: RXR) announce a scrip merger to form a West African mid-tier gold play.
- Via a “definitive plan of arrangement“, Robex shareholders will receive 8.667 PDI shares for every Robex share. Upon completion, PDI will hold 51% of shares out, and Robex the remainder.
- The Cohen Group and Eglington Mining (collectively holding 25.2% of Robex) are supportive. The key condition is Robex’s shareholder vote, sometime in December, with a two-thirds threshold.
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