
In today’s briefing:
- [Japan Activism/M&A] – Shareholders Approve Tsuruha/Welcia Merger – Now It’s Partial Offer+Synergies
- [Japan Activism] The Upcoming Fuji Media AGM Stoush – Foreigners Vs Voting Right Limits
- Soundwill (878 HK): Thoughts On The Latest Scheme Fail
- A/H Premium Tracker (To 23 May 2025): AH Premia Contract, H Premia Names Perform Best; Batteries!
- Forged in Politics: Nippon’s $55 Bid for X Heats Up Again
- NIFTY Index Outlook (With an Eye on Zomato’s Passive Selling Starting…)
- Connect SOUTHBOUND Flows (To 23 May 2025); Volumes OK, Telecoms & Banks Bought, Tech & Consumer Sold
- LS Marine Solution’s Rights Deal Is Serving up a Pretty Rare Arbitrage Hunting Ground
- SSI Weekly Newsletter: Strategic Reviews, Merger Arbitrage, Tender Offers, and Portfolio Updates
- Weekly Update (GTX, HAVAS, LION, SNRE, MDT)

[Japan Activism/M&A] – Shareholders Approve Tsuruha/Welcia Merger – Now It’s Partial Offer+Synergies
- This morning the Nikkei reported shareholders of Welcia Holdings (3141 JP) and Tsuruha Holdings (3391 JP) approved their Merger. Activists opposed but it was going to be close at best.
- As expected, Welcia shares popped, and the spread converged to 2% with Tsuruha falling back to just below ¥11,400. Some of this is unwind of speculative interest in Tsuruha.
- The new yuhos are out, which shows roughly where we stand (as of end-Feb, and some updates). Now the trade is NEWCO vs Aeon’s interest and NEWCO vs World.
[Japan Activism] The Upcoming Fuji Media AGM Stoush – Foreigners Vs Voting Right Limits
- Fuji Media Holdings (4676 JP) has for years been “undervalued” and owned by value-oriented actively-managed fund managers. Under-used real estate and IP assets. Lack of governance regarding capital.
- A Shukan Bunshun article in Dec-2024 reported a former boy band SMAP member and Fuji TV regular made a big payment to an unidentified woman after a June 2023 “incident.”
- Fuji TV hemmed and hawed about its involvement. Advertisers bolted. Activists activisted. The chairman resigned. Now Major Activist Dalton has a director slate for the AGM. What Next?
Soundwill (878 HK): Thoughts On The Latest Scheme Fail
- After Goldlion (533 HK)‘s spectacular Scheme fail, Soundwill (878 HK) appeared destined to be the next failure as shares dipped hard ahead of the Scheme vote. And fail it did.
- Just like for Goldlion, Soundwill’s Offer was clearly light. The counter-argument was that terms were, arguably, as good as it gets. And no competing Offer would emerge. Minorities voiced otherwise.
- Hong Kong has been the proverbial graveyard for arb deals of late. However, in a positive sense, minorities in Goldlion and Soundwill simply rejected opportunistic Offers.
A/H Premium Tracker (To 23 May 2025): AH Premia Contract, H Premia Names Perform Best; Batteries!
- AH spreads are slightly narrower, but performance is concentrated in fewer names and broad spread volatility is up. BYD (1211 HK) now 5% through. CATL 10% through will help.
- It feels like there were some concentrated shorts on H vs A. BYD performance on CATL and Hang Seng upweight/inclusion exacerbate the issue. CATL H less liquid than people think.
- 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.
Forged in Politics: Nippon’s $55 Bid for X Heats Up Again
- Trump’s endorsement removes the political overhang, reigniting momentum for Nippon Steel’s $55/share all-cash offer.
- Implied EV/EBITDA of 8.94x reflects ~$2–3B in strategic synergies over standalone valuation.
- 11.59% annualized return offers attractive arbitrage upside with manageable regulatory and execution risk.
NIFTY Index Outlook (With an Eye on Zomato’s Passive Selling Starting…)
- As reported by Brian Freitas , one of the NIFTY Index (NIFTY INDEX) ‘s component (Zomato: Eternal (ETERNAL IN) ) will be subject to big passive selling beginning on Tuesday.
- Let’s have a look at the NIFTY Index (NIFTY INDEX) to evaluate the tactical outlook according to our model.
- Since our last BUY recommendation in a previous insight in early May, the index has made some progress uptrending, let’s see if the rally can continue…
Connect SOUTHBOUND Flows (To 23 May 2025); Volumes OK, Telecoms & Banks Bought, Tech & Consumer Sold
- Gross SOUTHBOUND volumes back below HK$100bn a day this past week, but net buying was nearly HK$19bn, which is decent.
- Among the top buys as a percentage of volume, FINANCIALS and TELECOMS stand out, dramatically. Among top sells, it is CONSUMER and INFO TECH dominating the top 20.
- 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.
LS Marine Solution’s Rights Deal Is Serving up a Pretty Rare Arbitrage Hunting Ground
- This raise stands out with a near-60% issuance ratio—fat rights per share make pre-positioning before ex-date a compelling trade with solid pickup potential.
- LS Cable holds 66.75% and has been steadily upping its stake—likely all-in on this raise, which adds serious anchor support and puts a strong floor under the rights.
- Skip chasing rights—this setup favors buying shares pre–ex-rights, where the embedded rights value likely beats the ex-day drop, making it a clean trade.
SSI Weekly Newsletter: Strategic Reviews, Merger Arbitrage, Tender Offers, and Portfolio Updates
- Elevation Oncology (ELEV) is undergoing a strategic review after discontinuing its lead program, with potential 14–42% upside.
- Mayne Pharma (MYX:AX) faces merger arbitrage challenges due to Cosette Pharmaceuticals’ Material Adverse Change claims, trading at a 35% discount.
- Air Canada (AC:TO) offers a tender with odd-lot provision, repurchasing shares at C$18.50 – C$21.00, with potential upside.
Weekly Update (GTX, HAVAS, LION, SNRE, MDT)
- I sold Garrett Motion (GTX). Nothing against GTX as the stock still looks cheap at 6.6x FCF and 6.6x EBITDA.
- But it’s been incredibly strong, and I don’t quite understand why.
- Further, PE owners Oaktree, Centerbridge and Cyrus, were planning to sell 17MM shares in a secondary offering (looks like the secondary is being pulled).