
In today’s briefing:
- Merger Arb Mondays (07 Jul) – Seven & I, Shibaura, Insignia, New World, ENN Energy, HKBN, Fengxiang
- Korea’s Next Policy Trade: Locals’ Screens for Dividend Tax Reform Plays
- A/H Premium Tracker (To 4 July 2025): “Beautiful Skew” Continues as SB Buys Wide Spread Hs
- HK Connect SOUTHBOUND Flows (To 4 July 2025); Volumes Up, Net Buying Up, Banks Bought, SOEs Sold
- SPAC Developments, Merger Arbitrage Opportunities, and Strategic Acquisitions
- Fengxiang (9977 HK): Composite Doc Out. 24th July H-Class Meeting
- Ralliant Spin-off Deep Dive
- Weekly Update (IGT/BRSL, FTV, RAL)
- Acciona SA Nears Full Control: Delisting Play in Acciona Energías Renovables

Merger Arb Mondays (07 Jul) – Seven & I, Shibaura, Insignia, New World, ENN Energy, HKBN, Fengxiang
- I summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
- Highest spreads:Mayne Pharma (MYX AU), Yichang HEC Changjiang Pharma (1558 HK), Insignia Financial (IFL AU), ENN Energy (2688 HK), Seven & I Holdings (3382 JP), Santos Ltd (STO AU).
- Lowest spreads: Bright Smart Securities And (1428 HK), Hainan Meilan International Airport (357 HK), New World Resources (NWC AU), Humm Group (HUM AU), Avjennings Ltd (AVJ AU).
Korea’s Next Policy Trade: Locals’ Screens for Dividend Tax Reform Plays
- With the governance trade fading, local desks are rotating into dividend tax reform—bipartisan tailwinds and rising political chatter are driving early positioning ahead of potential rerating.
- Local desks are screening for names with 35%+ payout and 30%+ individual ownership, key thresholds tied to the ruling party’s dividend tax reform bill gaining traction in policy circles.
- The real trade is in names with individual top holders—direct beneficiaries of the tax reform—most exposed to theme flows and likely to lead on dividend hikes if the bill passes.
A/H Premium Tracker (To 4 July 2025): “Beautiful Skew” Continues as SB Buys Wide Spread Hs
- AH premia flat among liquid names but “beautiful skew” of wide premia converging more than narrow premia continues bigly. It has paid well to be long wide H discounts.
- Last week I said, “It has paid to be long the H on those H/A pairs with the biggest H discounts. I would continue to ride that trend.” Ride on.
- The data tables below update on a daily basis in the Tools section of Smartkarma. The SOUTHBOUND Flow Monitor and AH Monitor are both there free for SK readers. Technical issue delayed this week’s Monitor.
HK Connect SOUTHBOUND Flows (To 4 July 2025); Volumes Up, Net Buying Up, Banks Bought, SOEs Sold
- Gross SOUTHBOUND volumes up to US$17+bn a day this past 5-day week. Net buying strong at +US$700mm a day.
- Among the top buys as a percentage of volume, FINANCIALS stood out, dramatically. Again. Neither INFO TECH nor Tencent were the big sells this week.
- The data tables below update on a daily basis in the Tools section of Smartkarma. The SOUTHBOUND Flow Monitor and AH Monitor are both there free for SK readers. Technical issue delayed this week’s Monitor.
SPAC Developments, Merger Arbitrage Opportunities, and Strategic Acquisitions
- Yorkville Acquisition (YORKU) is a new SPAC sponsored by Yorkville Advisors, with Trump Media executives on its board.
- Banxa (BNXA:V) merger with OSL Group offers a 23% spread; shareholder vote scheduled for August, pending regulatory approval.
- Lifeway Foods (LWAY) board overhaul process initiated by major shareholders; management contests legality, potential buyout talks with Danone.
Fengxiang (9977 HK): Composite Doc Out. 24th July H-Class Meeting
- After the Offeror for Shandong Fengxiang (9977 HK) fulfilled pre-cons on the 3rd July, the Composite was dispatched on the 4th July (but dated 5th July).
- The EGM/H-share class meeting will take place on the 24th July. Settlement should be on ore around the 11th August, well ahead of my prior estimate.
- Trading at a gross/annualised spread off 4.2%/49.6%. Get involved if illiquid arbs are your bag.
Ralliant Spin-off Deep Dive
Fortive (FTV) spun off Ralliant (RAL) on Monday June 30, 2025. Shareholders received a share of RAL for 3 shares of FTV owned.
Ralliant generated $2.2B of revenue in 2024.
Key segments: 56% of sales in Sensors & Safety (power‑grid monitors, defense, critical-environment sensors) and 44% in Test & Measurement (electronic instrumentation, systems, software).
Weekly Update (IGT/BRSL, FTV, RAL)
- Fortive (FTV) spun off 1 share of Ralliant (RAL) for each 3 shares owned.
- As such, Ralliant has 113MM shares outstanding and a market cap of $5.1BN and enterprise value of $6.1BN.
- The rationale for the spin-off is to separate the “BadCo” (Ralliant) from the “GoodCo” (Fortive RemainCo).
Acciona SA Nears Full Control: Delisting Play in Acciona Energías Renovables
- Acciona SA now owns 90.03% of Acciona Energías Renovables, enabling a squeeze-out and delisting. A likely offer in the €22.60–24.50 range creates a near-term arbitrage opportunity.
- At 9.0x EV/NTM EBITDA, ANE trades below peer valuations. A delisting would be strategically accretive for Acciona, unlocking group simplification, full cash flow control, and rerating potential.
- Acciona trades at a 7.6% discount to its SOTP. I recommend BUY on both Acciona SA and ANE, with the latter offering 2–10% upside in a low-risk setup.