Event-Driven Archives | Page 29 of 186 | Smartkarma

• AH Premia continue to fall. Spread curve torsion reverses again with narrow premia trades seeing Hs perform the best. 
• Warning signs are starting to flash on spreads. This week I have the biggest week of changes recommended that I have ever had. By a long ways.
• This week threatens to be a very strange week geopolitically. Being smaller in crowded trades is probably a good thing.

• Gross SOUTHBOUND volumes cleared HK$800bn for the second week in a row. NET buying by SOUTHBOUND was HK$75bn which was perhaps a new record.
• Notable again is the HUGE back-and-forth. If HK$865bn traded and SOUTHBOUND “only” bought HK$75bn, HK$395bn was round-tripped for short-term purposes.
• Last week I flipped to short Alibaba Group Holding (9988 HK). Sentiment may worsen and there’s lots to sell later this week. Staying short Alibaba for now. 

• Sparx on Friday announced a Tender Offer at 0.55x book and an EV of less than inventory (<20% of revenue) for Snt Corp (6319 JP) – another metal monozukuri company.
• Last year they did it on IJTT Co., Ltd. (7315 JP). That one got bumped. This one could too, but cross-holders own nearly 60%.  
• This kind of company has skill-sets which may be portable but the product line is tied to old Japan. The takeover 

• We 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: Tonami Holdings (9070 JP), Seven & I Holdings (3382 JP), Aeon Delight (9787 JP), Smart Share Global (EM US), Insignia Financial (IFL AU), Tam Jai International (2217 HK). 
• Lowest spreads: Millennium & Copthorne Hotels Nz (MCK NZ), Shibaura Electronics (6957 JP), Makino Milling Machine Co (6135 JP), Domain Holdings Australia (DHG AU), Proto Corp (4298 JP).   

• Pentamaster International (1665 HK)‘s Scheme overwhelmingly gets up after a wild week of trading.
• After touching an intra-day low of HK$0.78/share on the 25th Feb – 28% adrift of the HK$1.00/share terms – shares closed at HK$0.97/share prior the results of the Scheme Meeting. 
• 58.2% of disinterested shareholders opted to vote. Just 0.5% of those shareholders present voted against the Scheme; or just 0.29% of total disinterested shareholders. Not even close.

• AEON Mall (8905 JP) and Aeon Co Ltd (8267 JP) announced a MoU for the potential privatisation of Aeon Mall through a share exchange offer.
• The terms of the share exchange are expected to be announced in early April and be implemented in July. 
• Aeon’s 58.16% shareholding facilitates passing the Aeon Mall shareholder vote. My analysis suggests a potential share exchange (Aeon Mall/Aeon) ratio range of 0.60x-0.69x.

• On Monday, Western Digital (WDC) spun off its NAND flash business, Sandisk (SNDK).

• On Friday, CompoSecure (CMPO) spun off its management company, Resolute Holdings (RHLD).

• During the week, we got earnings from Howard Hughes (HHH) and Sunrise Communications (SNRE).

• SpringWorks Therapeutics (SWTX) is in late-stage acquisition talks with Merck KGaA, with a potential buyout offer at $85/share.
• Liquidia (LQDA) had its FDA case denied, delaying Yutrepia’s market entry until May 2025, with commercialization on track.
• ContextLogic (LOGC) received a $150m strategic investment from BC Partners, enhancing its cash balance and NOL monetization potential.

• Sage Therapeutics rejected Biogen’s $7.22/share offer, initiating a strategic review for potential sale, indicating a possible higher premium.
• SPAR Group’s merger with Highwire Capital faces uncertainty due to funding issues, with potential for significant stock price decline.
• Kronos Bio’s strategic review follows clinical trial discontinuation, with potential sale or reverse merger, trading below net cash value.

• Bowing before bureaucratic, governmental, societal, and perhaps finally shareholder pressure, Aeon Co Ltd (8267 JP) Friday announced it is rolling up two big subsidiaries. 
• Aeon Mall will be merged with Aeon in a share exchange and Aeon Delight (9787 JP) will be taken over via slightly long-dated Tender Offer which starts Monday.
• This is probably the wrong price, but it isn’t egregiously wrong I expect. And it would be difficult to block. I expect it gets done easily.

• On 28-Feb-25, the last day of their fiscal year, Aeon Co Ltd (8267 JP) signed a deal to acquire Aeon Delight via Tender Offer and Aeon Mall via scrip exchange.
• For Aeon Mall, that means negotiation on the share exchange ratio over the next 5-6 weeks. 
• While I have an opinion on the fair ratio (explained below), I find “Guess The Ratio” trades fraught with bad governance outcomes. The 3-month average is often used.

• 7&I (3382 JP)‘s MBO is off. Itochu has apparently not been able to agree with Ito-san on board composition/representation and management control. That the MBO is off isn’t surprising.
• Yangzijiang Shipbuilding (YZJSGD SP) is sucking wind as United States Trade Representative’s (USTR) office proposed a raft of fees and other shipping restrictions on Chinese vessels
• Pentamaster International (1665 HK)‘s Scheme comfortably gets up after a wild week of trading. 

• Several US tariffs are expected in March, but their implementation remains uncertain and is part of ongoing negotiations.
• Central banks in India, Japan, and the US will announce rate decisions in March, with India possibly cutting rates by 0.25%.
• Major HK stocks are set to announce earnings in March, and index changes will occur in the S&P 500, Nifty 50, S&P/ASX 200, and HSCEI indices.

• For the month of February 2025, 14 new transactions (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$5bn.
• The average premium for the new transactions announced (or first discussed) in February was ~55%, with a year-to-date average also of 56%. 
• The average premiums for transactions in 2024 (129 transactions), (2023 (117), 2022 (106), 2021 (165), 2020 (158), and 2019 (145 ) were 43%, 39%, 41%, 33%, 31%, and 31% .

• Aeon Delight (9787 JP) has recommended a tender offer from Aeon Co Ltd (8267 JP) at JPY5,400 per share, a 15.3% premium to the last close.
• Despite the skinny premium, the offer is reasonable compared to historical trading ranges and peer multiples. The offer represents an all-time high. 
• The offer aligns with the midpoint of the special committee IFA’s DCF valuation range and is marginally below the Board’s requested price. The required minority acceptance rate is attainable. 

• I tally 56 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma.
• Two new deals discussed this week: Mixi Inc (2121 JP)‘s Offer for PointsBet Holdings (PBH AU), and Tonami Holdings (9070 JP)‘s MBO. CICC (3908 HK)/China Galaxy (6881 HK) merger rumoured.
• Key updates/news took place on: SG Fleet (SGF AU), Silk Logistics (SLH AU), Jamco Corp (7408 JP), and Makino Milling Machine Co (6135 JP).

• The data in this insight is collated from the “shareholding disclosure” link on the HKEx website.
• Often there is a corresponding HKEx announcement on the increase – or decrease – in the shareholding by directors. Or pledging. However, such disclosures are by no means an absolute.
• The key stocks mentioned in this regular series include: Mobvista (1860 HK), Xtep International (1368 HK), Onewo (2602 HK), and Bonny International Holding (1906 HK).

• During yesterday’s Option expiration day, Tencent (700 HK) experienced an intra-day swing of 4.1%.
• Trading in the afternoon oscillated around the prominent 500 strike level. Around 66% of calls and 2% of puts expired in the money.
• Volume was lower than in the preceding days; a total of 38 million shares were traded, with the morning session accounting for 53% of the volume.

• NPS’s aggressive net buying over the past four months? Just a 3% buffer rebalance—not some structural bullish call on K-stocks.
• Street intel points to NPS capping buys in the low-14% range, 1%p below target, only defending against dips. With short selling back on from March 31, further buying looks unlikely.
• With NPS stepping back and retail still weak, no real size remains on the buy side. Short flow could hit harder than expected—time to price it in and adjust positioning.

• Revised Offer Terms: BBVA increased the cash payment to €0.13/Sabadell share (raising total cash outlay to €705 million), while adjusting the exchange ratio to 5.3456 Sabadell shares per BBVA share.
• The deal requires CNMC, CNMV, and government approvals, with market skepticism evident as Sabadell’s market price exceeds the offer value, signaling a low probability of success under current terms.
• Financial Impact on BBVA: The increased cash component raises the estimated CET1 capital impact to 51bps, with potential further dilution if BBVA raises the cash payment to €0.20-€0.30 per share.

• Onesource Specialty Pharma (ONESOURC IN) has transitioned from a niche player to a multi-modality CDMO powerhouse through strategic restructuring, rapid revenue expansion, and aggressive capacity building.
• With a projected INR1,400 crore revenue in FY25 (INR173 crore in FY24) and shifting from MSA to CSA contracts, OS is stabilizing its revenue model, tapping into high-growth segments.
• By leveraging a first-mover advantage in GLP-1, regulatory strength, and a $100 million capex plan, OS is positioning itself to become a billion-dollar global CDMO leader within the next 3-4Yrs.

• Regulatory Scrutiny: The CNMC has launched Phase II investigations into both Bondalti’s and Esseco’s takeover bids for Ercros due to competition concerns, potentially delaying or complicating the acquisition process.
• Market Sentiment: With Ercros trading at €2.81, well below Esseco’s €3.745 bid, the gross spread of 33.3% and 20.5% deal probability indicate skepticism about the takeover’s success.
• In 2024, Ercros reported €667.4 million in sales, €29.4 million EBITDA, and a €11.7 million net loss, reflecting economic headwinds that could influence shareholders’ decisions on the competing takeover offers.

• The MBO is off. Itochu Corp (8001 JP) has apparently not been able to agree with Ito-san on board composition/representation and management control. That the MBO is off isn’t surprising.
• 7&i says they “continue to engage constructively with ACT and alternate proposals but news articles suggest that almost 6mos after proposing an NDA, ACT still haven’t had access to financials.
• The shares are off hard today to a level below where ACT’s first bid was considered “not even worth discussing”. There will be questions at the AGM and before.

• Yesterday, Japan Post Holdings (6178 JP) announced an MBO for Tonami Holdings (9070 JP) whereby the family/execs will stay on. JPH will own 99.97%, the execs/family 0.03%.
• This deal is yet another in a line of logistics deals dating back the last 2+ years where the premium has been quite big. This time is +74%. 
• But this is not overly expensive. Makes me go hmmmm… 

• SpringWorks Therapeutics is in advanced acquisition talks with Merck KGaA, following FDA approval for its drug Gomekli.
• Merck’s acquisition strategy focuses on low-risk, value-creating oncology deals, aligning with SpringWorks’ FDA-approved treatments.
• Estimated peak sales for SpringWorks’ drugs range from $600m to $1bn, suggesting a potential $85/share valuation.

• UltraTech Cement, part of the Aditya Birla Group, is entering the 80,000+ crore wires & cables market with INR 1,800 crore investment, targeting a December 2026 plant launch in Gujarat.
• The sector is highly fragmented, with no dominant player exceeding 20% market share, creating an opportunity for UltraTech to disrupt with its financial strength, backward integration, and superior product quality.
• This move positions UltraTech as a diversified building materials leader, leveraging synergies with Hindalco to offer cost-efficient, high-quality electrical solutions, reshaping competition in the industry.

• In this insight, we discuss the alpha generation through companies that announced share buybacks in the Korean stock market in January and February 2025.
• There were 37 companies in the Korean stock market that announced share buybacks in the past two months. On average, the share buyback announcements represented 2.3% of outstanding shares.
• Some of the notable share buybacks by Korean companies in the past two months include Samsung Electronics, Celltrion, Hyundai Mobis, and INFOvine.

• Bloomberg reports that the MBO is stalling due to disagreements within the consortium over who will control Seven & I Holdings (3382 JP) after it is privatised.
• The Nikkei reported that Itochu Corp (8001 JP) was set to withdraw from the MBO consortium. Along with CP ALL PCL (CPALL TB)’s non-participation, the MBO’s financing is in trouble. 
• An Alimentation Couche-Tard (ATD CN) bid remains in play but has issues. While progressing, the Board’s restructuring plan fails to prove a credible alternative. 

• Media reports indicate that Japan Post Holdings (6178 JP) could sell JPY 600bn (US$4.02bn) of Japan Post Bank (7182 JP) with the announcement coming as early as this week.
• The selldown is driven by Japan Post Holdings (6178 JP) needing to reduce its holding in Japan Post Bank (7182 JP) to 50% or lower by March 2026.
• Passive index trackers will buy around 11.4% of the offering at the time of settlement of the placement shares with the balance being bought in January 2026.

• Reportedly, China International Capital Corporation (3908 HK) and China Galaxy Securities (6881 HK), two of China’s leading state-backed brokerages, intend to merge via a share swap, forming China’s third-largest broker.
• This report/rumour arrives shortly after the successful merger of Guotai Junan Securities (2611 HK) (GJS) and Haitong Securities (6837 HK). 
• As with GJS/Haitong, expect a Merger by Absorption structure, and that Galaxy (or CICC?) issue new A and H shares to the target. I’d be picking up CICC shares here. 

• After the United States Trade Representative’s (USTR) office proposed a raft of fees and other shipping restrictions on Chinese vessels, non-SOE Yangzijiang Shipbuilding (YZJSGD SP) is down 16%.
• Port entrance fees include up to US$1mn/vessel owned by Chinese transport operators; and non-Chinese transport operators operating Chinese-built vessels would pay up to US$1.5mn per port entry
• Fees are currently preliminary, and may, as witnessed in recent Trump policies, be a bargaining chip rather than firm action. If enacted, these measures would curtail a promising Chinese export.

• Tonami Holdings (9070 JP) has recommended a Japan Post Holdings (6178 JP)-sponsored MBO at JPY10,200, a 73.8% premium to the last close.
• The offer is attractive compared to historical trading ranges and peer multiples. The offer represents an all-time high. 
• The offer is above the midpoint of the special committee IFA’s DCF valuation range but below that of the target IFA. However, the required minority acceptance rate is not onerous. 

• Equinox and Calibre announced a deal that was met with mixed reactions, with shareholders on both sides expressing dissatisfaction.
• The deal, which includes Equinox acquiring Calibre in an all-script deal, has led to a 7% drop in Calibre’s share price.
• The deal will result in a combined group with nine producing mines and a mine under construction, with a pro forma ownership of 65% Equinox and 35% Calibre.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• Tencent (700 HK) stock options expiring on Thursday, February 27, show a concentration of approximately 40,000 open contracts at the 500 strike price, currently at the money.
• The open interest at the 500 strike may increase volatility and trading activity near expiry if the stock price hovers around 500, possibly leading to amplified intraday price swings.
• At the last monthly expiry in January the stock experienced intraday price swings of 2.5%.

• Daemyung Sono Group will acquire a controlling 46.26% stake in T’Way Holdings (004870 KS) (THI) held by Yearimdang Publishing (036000 KS). THI looks stretched.
• Preceding my comments on the T’way Group are the current setup/unwind tables for Asia-Pacific Holdcos.
• These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

• Guzman Y Gomez (GYG AU) raised around US$221m in its Australian IPO. Its IPO linked partial lockup expiry is due soon.
• GYG is a quick service restaurant business with more than 200 restaurants globally. It mainly focuses on fresh, made-to-order, Mexican-inspired food.
• In this note, we will talk about the lockup dynamics and possible placement.

• After online trading player SelfWealth (SWF AU) entered into a SID with Bell Financial (BFG AU) on the 25th November, Singaporean-based wealth manager Svava gate-crashed the party earlier this month. 
• Svava tabled a non-binding A$0.28/share Offer, in cash, by way of a Scheme, versus Bell’s A$0.25/share. Svava also built an effective blocking stake – 18.83% of shares out.
• After Bell said it won’t make a counterproposal yesterday, SelfWealth has now entered into Scheme with Svava. Expect implementation in May. 

• Since short selling was banned in November 2023, short interest has plunged in Korea as shorts were covered. Markets have not done much over the last 16 months though. 
• Foreign investor holdings have dropped from 32.05% in July to 28.57%. The top 25 stocks bought by foreign investors outperformed the top 25 stocks sold by 128% in 16 months.
• There will be trade opportunities across indices, pref/ords, index migrations and deletions, potential market upgrades and overvalued stocks being sold.

• Nidec Corp (6594 JP) released a multi-page document regarding its bid for Makino Milling Machine Co (6135 JP) yesterday. 
• It talked a bit about the back-and-forth with Makino, and gave Nidec’s side of the story. Makino has been making their side public too. A meeting is due early March.
• In the document, there was a line suggesting Nidec won’t raise price even against a counteroffer. They didn’t need to say that. The question is what Makino will do.

• Back on the 19th December 2024, Pentamaster Corp (PENT MK) announced an Offer, by way of a Scheme, to take out its pseudo dual-listed twin, Pentamaster International (1665 HK).
• The Offer Price was HK$1.00/share – including a HK$0.07/share dividend – a 45.3% premium to last close, but arguably more like a 61% premium to undisturbed. 
• The Court Meeting is the 28th February. Shares are down 15%+ in recent days. On no news.  Not a great look. 

• Yesterday morning, Prosus announced the acquisition of Just Eat Takeaway for $4.3bn.
• Naspers and Prosus sold off sharply on the news, ending the day down 7.7% and 7.8%, respectively.
• Naspers’ discount widened by 2.8 percentage points to 44.2% and Prosus’ discount widened by 3.1 percentage points to 39.8%.

• Today, investors received shares in the new SanDisk spin-off.

• Shares are currently slightly up due to buying pressure ahead of the stock being added to the S&P 600 index effective tomorrow.

• SanDisk is trading at 1.1x revenue which is a reasonable valuation (Xioxia, Sandisk’s JV partner, trades at 1.3x LTM revenue).

• Nathan’s Famous is in potential sale talks, with major food manufacturers and PE firms as potential buyers.
• Smithfield Foods, Nathan’s key partner, is well-positioned for acquisition, potentially eliminating royalties and achieving cost synergies.
• Sum of the parts valuation estimates Nathan’s equity value at $604m or $148/share, a 45% upside potential.

• PointsBet Holdings (PBH AU), an Australian/Canadian online wagering platform, has entered into a Scheme Implementation Deed with Mixi Inc (2121 JP).
• Mixi is offering A$1.06/share, a 27.7% premium to last close and an implied EV/EBITDA of 25.2x-32.1x for FY25E. Apart from PointsBet’s shareholder approval, the Offer requires FIRB signing off.
• Separately, Pointsbet’s key rival BlueBet Holdings (BBT AU) has tabled, what appears to be, a higher non-binding cash/scrip offer by way of Scheme, which PointsBet has allegedly ignored. 

• The vote on Pentamaster Corp (PENT MK) and AchiCapital’s HK$1.00 for Pentamaster International (1665 HK) is on 28 February. Over the last two days, the gross spread has increased to 8.7%.
• There are valid arguments for the vote to pass or fail. Despite the IFA’s assertions that the offer is fair and reasonable, it is not and will leave minorities short-changed. 
• While there is no visible opposition, the share price indicates that an activist could have secured a blocking stake (3.34% of shares, which does not require HKEx disclosure). 

• The push for MSCI DM inclusion drove Korea’s full short-selling resumption, clearing the KRX index rights issue, allowing MSCI to roll out derivatives, making full short selling the final step.
• With full short-selling back, traders are watching for large-scale quant funds to return, potentially boosting liquidity across the market alongside the ATS launch, after years of individual large-cap setups.
• The market is watching how full short-selling resumption narrows bid-ask spreads and impacts sector rotation, prompting traders to prepare setups for the broader market shift.

• Delta Corp Ltd (DELTA IN) announced a demerger to separate its Hospitality & Real Estate businesses from its GST-challenged Casino business. Additionally, it is divesting its online gaming business.
• The hospitality business plans to add 450 new rooms and the company owns a 100-acre land parcel near Moga Airport, which holds significant growth potential.
• The demerger will leave tax liability with the main company, while the demerged business, accounting for only 6% of revenue, will operate with focused execution and independent decision-making.

• After releasing its FY24 results last Friday, Haw Par Corp (HPAR SP) declared a S$1.00/share special dividend, in addition to a final dividend of S$0.20/share.
• Preceding my comments on Haw Par – and Singapore Land Group (SPLG SP) – are the current setup/unwind tables for Asia-Pacific Holdcos.
• These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

• KKR has signed definitive agreements to acquire up to 54% of HCG from CVC Asia V, positioning itself as the largest shareholder and assuming sole operational control.
• This will trigger an open offer to buy an additional 26% stake at a price of INR 504.41 per share. 
• Now, HCG will be seen as a transformed healthcare leader with a robust growth trajectory, driven by global expertise and strategic restructuring for long-term value creation.

• Indorama Ventures (IVL TB) is acquiring a 24.9% stake in EPL Ltd (fka Essel Propack) (EPLL IN) from Blackstone at Rs 240, marking a major entry into India’s packaging market.
• This deal strengthens EPL’s growth and sustainability, unlocking cross-border synergies and driving competitiveness in the global specialty packaging sector.
• It redefines investment dynamics in Indian packaging sector, emphasizing sustainable growth and long-term value creation, challenging traditional global investment paradigms.

• Prosus’ €4.1bn all-cash offer for Just Eat Takeaway.com represents a 63% premium to the pre-announcement share price and an EV/NTM EBITDA multiple of 9.3x, above the sector median of 7.2x.
• The deal strengthens Prosus’ global food delivery footprint, complementing its stakes in iFood, Delivery Hero, and Meituan, with potential synergies in AI-driven logistics, customer acquisition, and operational efficiency.
• Regulatory approval remains a key hurdle, especially in markets where Just Eat Takeaway.com and Delivery Hero hold significant shares, potentially impacting the likelihood and timeline of deal completion.

• Over the weekend, the Nikkei and Jiji reported the 7&i Board met Saturday and decided Bain would have preferred negotiating rights to buy York Holdings. They bid “over ¥700bn.”
• That’s a trifle lower than the ¥1.2trn Reuters reported (on Christmas Day) Bain bid but details aren’t known. Proper structuring would get the vast majority to 7&i in post-tax cash.
• For 7&i to decide by the AGM (which could be contentious), they need time to debate. Bids are likely needed in 3wks. In the meantime, “Trump Risk” lurks.

• AH Premia continue to fall with the widest spreads narrowing more than the narrowest spreads, and liquid pairs seeing more narrowing than illiquid pairs.
• Average AH Premia are at a new 5yr low (longer, actually, but charts below only show 5yrs). The big warning sign? Rolling 52wk performance of A vs H in pairs.
• Momentum is going to work until it does not. A new Trump EO this weekend seems to have potential to lead to more restrictions on US ownership of Chinese stocks.

• This past week saw SOUTHBOUND Connect clear HK$800bn of gross value traded, and net value was near recent highs at +HK$51bn. Consumer and finance names continue to be the rage.
• Notable is the HUGE back-and-forth. If HK$800bn traded and SOUTHBOUND only bought HK$51bn, HK$375bn was round-tripped for short-term purposes.
• That is twice the “excess” traded seen for the past year. Tencent (700 HK) saw US$14bn traded but net buying was US$121mm. 

• We 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: Seven & I Holdings (3382 JP), Smart Share Global (EM US), Tam Jai International (2217 HK), Vesync (2148 HK), ESR Group (1821 HK), Goldlion Holdings (533 HK). 
• Lowest spreads: Makino Milling Machine Co (6135 JP), Shibaura Electronics (6957 JP), Millennium & Copthorne Hotels Nz (MCK NZ), Domain Holdings Australia (DHG AU), Avjennings Ltd (AVJ AU). 

• York HD is due to take over operation of all group business except Seven Eleven at the end of February and press reports suggest Bain’s bid has been accepted.
• All of which is fine but this leaves Seven Eleven Japan which is struggling against rivals. Even franchise owners are becoming more critical.
• A recent survey by Nikkei also suggested that consumers are increasingly favouring Lawson and Familymart and 30% visited Seven Eleven stores less frequently in 2024. This is a big problem.

• On the 25 November 2024, SG Fleet (SGF AU) (SGF), an Aussie provider of fleet leasing services, announced a A$3.50/share non-binding/indicative proposal from Sydney PE outfit Pacific Equity Partners (PEP).
• On the 4th December, both parties entered into a SID on the same terms. SGF’s largest shareholder, Super Group (SUPER SP) (53.58%), was supportive. 
• The Scheme Booklet is now out, with a Scheme Meeting on the 8th April. Expected implementation on the 30th April. The IE (Grant Thornton) says fair & reasonable.

• I want to use my introduction to provide some comments on Howard Hughes (HHH).

• Bill Ackman’s Pershing Square Capital Management has disclosed a new offer related to Howard Hughes.

• The proposal is that Pershing Square Capital Management purchases 10 million newly issued shares at $90 each, totaling $900 million, which would increase Pershing Square’s stake from 37.6% to 48%.

• On February 24, 2025, Western Digital (WDC) will spin-off 80.1% of its stake in Sandisk (SNDK).
• Sandisk is trading in the when issued market at $48.26. At that share price, SNDK is trading at an EV/ annualized revenue of 1.0x and a price to annualized earnings of 9.9x.
• This price looks relatively attractive given Sandisk’s NAND flash memory partner, Xioxia, is trading at 1.3x TTM revenue.

• Currency Exchange International (CURN) exits Canadian operations, incurring discontinuation costs, but expects $5-$6m profit tailwind by 2026.
• SPAR Group (SGRP) faces a third financing delay, suggesting Highwire Capital’s potential funding issues or hesitance.
• Embracer Group’s (EMBRAC-B:ST) valuation update post-Asmodee spin-off indicates potential 20%-80% upside if market recognizes Asmodee stake.

• In line with our forecast, Oracle Financial Services (OFSS IN) replaces L&T Technology Services Limited (LTTS IN) in the Nifty IT Index (NSEIT INDEX) at the March rebalance.
• L&T Technology Services (LTTS IN) is also being excluded from the F&O segment at the close on 27 March. Open interest is ~900k shares and there will be unwinding.
• Passive trackers will need to trade between 0.5-0.6x ADV in the stocks. Impact increases to 1-2 days of delivery volume.

• Mayne Pharma (MYX AU) entered a scheme implementation deed with Cosette Pharma at A$7.40 per share, a 36.8% premium to the undisturbed price.
• The offer is conditional on shareholder and FIRB approval. The vote is low-risk as the two largest shareholders are supportive.  
• The offer is reasonable but not a knockout bid. At the last close and for an end-of-May payment, the gross/annualised spread was 2.8%/11.0%. 

• Shinko Electric Industries (6967 JP). Done. Finally. Look at whether you could borrow shares just before the close of the tender and short tender and buy back post ex-date
• REA Group Ltd (REA AU) rolls over as Costar Group (CSGP US) bets big on key rival Domain Domain Holdings Australia (DHG AU).
• Macromill (3978 JP)‘s tender extended. Still not a done deal. Look to buy shares at terms with the goal of NOT tendering and owning the back end.

• Domain Holdings Australia (DHG AU) announced a non-binding proposal from Costar Group (CSGP US) at A$4.20, a 34.6% premium to the undisturbed price of A$3.12 (20 February).
• The bid follows CoStar’s acquisition of a 16.9% stake in Domain on 20 February. Nine Entertainment Co Holdings (NEC AU)‘s support is crucial for its success.  
• While attractive to precedent transaction multiples, the offer is light compared to peer multiples. Nine is evaluating the offer and will likely push for improved terms.

• The Sg Fleet (SGF AU) IE considers Pacific Equity Partners’ A$3.50 offer fair and reasonable. 
• The key conditions are shareholder (Super Group (SPG SJ) and SG Fleet) and regulatory (FIRB, OIO and FCA) approval. 
• The offer is attractive compared to peer multiples and represents an all-time high. At the last close and for a 30 April payment, the gross/annualised spread is 1.5%/8.5%.  

• I tally 58 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma.
• Four new deals discussed this week: Domain Holdings Australia (DHG AU), Mayne Pharma (MYX AU), Tam Jai International (2217 HK), and PEC Ltd. (PEC SP).
• Key updates/news took place on: Canvest Environmental Protection Group (1381 HK),Fuji Soft Inc (9749 JP), and Proto Corp (4298 JP).

• A double dose of StubWorld this week: REA Group Ltd (REA AU)‘s rolls over as CoStar Group (CSGP US) bets big on key rival Domain Holdings Australia (DHG AU).
• Preceding my comments on REA and News Corp (NWSA US) are the current setup/unwind tables for Asia-Pacific Holdcos.
• These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

• Naturgy plans a €2.5 billion share buyback at €26.5 per share, thus increasing free float and liquidity, potentially aiding index inclusion and attracting passive ETF investors.
• The 2025-2027 strategic plan targets €6.4 billion investments, focusing on networks and renewables while maintaining EBITDA at €5.3 billion and net profit at €1.9 billion.
• A rising dividend from €1.6 to €1.9/share by 2027, with a 100% payout ratio, provides a 7.4% 27e yield, supported by a 2.3x net debt/EBITDA, ensuring sustainability.

• On 19 February, KKR sold 2 million shares (4.49%) stake in HD Hyundai Marine Solution at 147,500 won (9.3% discount to the previous day’s closing price), representing 295 billion won.
• Therefore, we would argue that these major shipbuilding shares in Korea (such as HD Hyundai Heavy Industries and Hanwha Ocean) could face more difficult headwinds in the coming months. 
• KKR’s timing of its block deal sale of HD Hyundai Marine Solution also reflects its attempt to partially sell its shares while the stock price is still at lofty levels.