This weekly newsletter pulls together summaries of the top ten most-read Insights across Event-Driven and Index Rebalance on Smartkarma.
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1. [Japan M&A] Japan Govt Quashes MBK Bid for Makino Milling (6135) – Foreign Buys of Sensitives Toast?
- When Makino Milling tried to block Nidec’s bid but Nidec ran into approvals risk, and MBK stepped in as an alternate bidder.
- The fact that Nidec seemed to run into China approval problems but MBK did not perhaps should have been something of a warning. Delays in Japan approvals definitely were.
- Now the Japanese government has asked MBK to withdraw citing national security concerns according to the Nikkei. First post-New-FEFTA deal block.
2. Samsung Electronics: Rising Narrative Around a Preferred-Only ADR Structure
- Labor standoff and strike risk push ADR onto the table. Preferred-share ADR avoids dilution, taps US income demand, and strengthens leverage vs union without ceding Samsung Group control.
- ADR isn’t only union-driven; CAPEX seen undersized for AI vs SK Hynix. Larger fab spend likely forces US market access; governance tradeoffs increasingly repriced and acceptable.
- Samsung likely waits to see SK Hynix ADR execution; 2H call unlikely. But preferred-ADR narrative may leak gradually, supporting FCF-driven preferred outperformance into year end.
3. Makino Milling Machine (6135 JP): Precedent Set as FEFTA Approval Is Rumoured to Be Not Forthcoming
- The Nikkei reported that the Japanese government has advised MBK to halt its acquisition of Makino Milling Machine Co (6135 JP) on national security grounds.
- This event sets a precedent and will increase the risk premium for foreign takeovers of Japanese companies in core business sectors. FEFTA approval can no longer be considered low-risk.
- Due to a significant re-rating of peers/index and Makino’s upgraded forecasts since the offer announcement, the share price fall on a deal break is likely to be modest (<10%).
4. Estimating Alteogen’s KOSDAQ Delisting Driven Passive Outflows Using KOSCOM Data
- KOSDAQ→KOSPI transfers have never seen KQ150 outflows near 4% of market cap. No trading halt means ETFs must fully unwind pre listing, creating a concentrated one day sell flow shock.
- Offsetting KOSPI inflows are delayed due to 15 day market cap screening and uncertain fast track inclusion, likely pushing KS200 demand into December rebalance, creating a 2-month passive mismatch window.
- KQ150 ETFs face about 2.2 million share sell, roughly 6.8x ADV, top tier passive flow. Expect pre positioning, then elevated volatility on rebalance, with downside bias into the event window.
5. Makino Milling Machine (6135 JP): A Rollercoaster Ride as NSSK Rumoured to Launch a Competing Bid
- Makino Milling Machine Co (6135 JP) shares fell 8.8% after it confirmed the Nikkei report that the Japanese government has advised MBK to halt its acquisition on national security grounds.
- However, after market close, the Nikkei reported that Nippon Sangyo Suishin Kiko (NSSK), a Japanese investment company, plans to make a higher competing tender offer.
- While the NSSK offer will be preconditional on regulatory approvals, it will not require FEFTA approval. I estimate the NSSK potential offer to be between JPY12,500 and JPY13,000.
6. [Quiddity Index] MV Global Gold Miners Jun26: Five ADDs Possible; US$1.2bn+ One-Way Flows
- The MV Global Gold Miners index represents the performance of large and mid-cap gold and silver global mining companies. We expect 2-3 ADDs on average each quarter.
- Based on the latest data, we now see five ADDs in June 2026 and we have a little over a month to the base date.
- We expect one-way flow of US$1.2bn for the June 2026 rebal.
7. Changhong Jiahua (3991 HK): What’s Up (Or Down To Be Precise)?
- Back on the 22nd September 2025, SOE-backed Sichuan Changhong Electric Co, Ltd. (600839 CH) made an Offer, by way of a pre-conditional Scheme, for 60.13%-held Changhong Jiahua Holdings (3991 HK)
- Sichuan Changhong, plus provincial bodies, offered HK$1.223/share, a 32.93% premium to last close. The Offer Price is final. And optically is fair.
- City level SASAC has been squared away. Provincial reg clearances outstanding (& tardy), which may be due to governmental personnel changes, and the approval process straddling Chinese New Year.
8. [Japan M&A] – Denso Withdraws Rohm (6963) Takeover Proposal – Now It’s Just Value
- The Nikkei reported Saturday morning that Denso Corp (6902 JP) will withdraw its takeover proposal for ROHM Co Ltd (6963 JP).
- The question was always whether Rohm thought being taken over was good for corporate value or if Denso would go hostile. We now know the answer to both questions.
- Now we are left with Rohm and its standalone value, and the value of being bigger in power semiconductors.
9. Qube (QUB AU): 16th June Vote On MAM’s Scheme
- On the 16th February, logistics and infrastructure play Qube Holdings (QUB AU) announced the Macquarie Asset Management-led consortium had firmed an Offer at A$5.20/share, the same price as the NBIO.
- Terms back out a 27.8% premium to undisturbed. And ~14.5x FY25 EV/EBITDA. Fully franked dividends up to A$0.40/share permitted, but will be netted. An $0.0535/share interim dividend has been paid.
- The Scheme Booklet is now out, with a Scheme Meeting on the 16th June, and expected implementation on the 28th July 2026. The IE (Grant Samuel) says “fair & reasonable“.
10. IDX’s Bubble Stocks: Enhanced Reporting Regs Partly Address Investability Concerns
- As part of a new transparency drive – predicated on MSCI concerns – Indonesia’s IDX flagged nine companies with a high shareholder concentration. All with lofty outperformances to match.
- The list included Indo’s third largest market cap company, coal producer Dian Swastatika Sentosa (DSSA IJ), with an eye-watering trailing PER of 136x. DSSA is backed by the Widjaja family.
- Barito Renewables Energy (BREN IJ), Indo’s second-largest company, also made the cut. I’ve previously flagged this bubble stock in StubWorld: Barito Renewables (BREN IJ) – This Too Shall Pop.
