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. Latest Read on Hynix Shareholder Return and Solidigm Since Last Friday’s Filings
- Street sees end-August print with Solidigm tie in; total around 70 trillion won, mix buyback plus special dividend, staged from 4Q with multi year buyback and FCF linked quarterly payouts.
- Near term narrative weak; immediate shareholder return signal unlikely. Faster Solidigm timeline could signal urgency on peak out risk and reinforce concerns rather than remove them.
- Tactical setup; if stock catches a bid, play the pop, monetize relief, and rotate out rather than chase strength.
2. Guotai Junan (1788 HK): Get Involved Here
- After broker/investment bank Guotai Junan (1788 HK) (GJI) was suspended last month pursuant to the Takeover’s Code, an Offer from its state-backed parent Guotai Haitong (601211 CH) (GHS) was expected.
- That unfolded last Friday evening (7th July), with GHS pitching a pre-conditional (SASAC/NDRC) Scheme at HK$3/share, a 44.2% premium to last close, bang in-line with my estimate. Terms are final.
- The pre-con long stop date is the 31st October. That’s uncommonly quick. This could (should) be wrapped up before year-end. Plus there are some quirky Scheme vote-blocking %s.
3. [Japan M&A] EQT+DG Up Kakaku.com (2371 JP) Bid by 3.478261% to ¥3570; Bain Needs To Bump, Again
- In what is rapidly becoming tedious, EQT+DG have raised their bid on Kakaku.com by 3.48% to thwart Bain’s bid, which is now just 1.96% above EQT’s bid.
- If Bain wants to “win”, it has to come over the top. They can raise by ¥2/share and that refreshes everything but that would just allow EQT to raise ¥2/share.
- Kakaku.com should probably sit both down and say “Final round. We have spoken to KDDI. Put in your best bid and we will support/recommend. No crying at the casino.”
4. Hynix New ADR Issuance After October Lockup Expiry: Low Probability for Now
- ADR chatter is building for October, but there is still no solid Yeouido read. Political, regulatory and Square 20% constraints make an aggressive buyback plus ADR primary a tough call.
- Base case remains a late execution for the special dividend and buyback, preserving flexibility around FCF volatility rather than committing to an aggressive schedule upfront.
- We should assign low odds to Hynix front loading the buyback and executing aggressively within a tight window to facilitate a new ADR issuance.
5. FleetPartners (FPR AU): A Simmering Bidding War as Element Fleet Lobs an Offer
- FleetPartners Group (FPR AU) has received a non-binding indicative proposal from Element Fleet Management (EFN CN) at A$3.80 per share, representing a 5.6% premium to Sg Fleet (SGF AU)‘s offer.
- Element has also offered an enhanced offer of A$4.00 if the Board grants it a three-week period of hard exclusivity by 11 August.
- Element’s offer remains light. While the Board has rejected its offer, SG Fleet is likely to return with a revised offer supported by significant cost synergies.
6. Merger Arb Mondays (10 Aug) – GJTAI, Con Aero, Get Nice, Cygnus, OOh!Media, Digital Hearts, JPMC
- I summarise the latest spreads and newsflow for the merger arb situations covered across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, the Philippines, Thailand, and Chinese ADRs.
- Highest spreads: Skyworth (751 HK), Changhong Jiahua (3991 HK), Guotai Junan International (1788 HK), OFX Group (OFX AU), Cygnus Metals (CY5 AU), European Lithium (EUR AU), Z Fin (1168 HK).
- Lowest spreads: Accent Group (AX1 AU), Kakaku.com Inc (2371 JP), Taiyo Holdings (4626 JP), Future Corporation (4722 JP), Japan Property Management Center (3276 JP), oOh!Media Ltd (OML AU).
7. BetMakers Technology (BET AU) Enters Scheme With Tabcorp (TAH AU)
- This morning (10th August), gambling tech play BetMakers (BET AU)announced it had entered into an offer, by way of a Scheme, with Tabcorp (TAH AU), at A$0.24/share, in cash.
- That’s a 45.5% premium to undisturbed. BetMakers’ shareholders can also elect scrip (25%/50%/75%/100%) with the balance in cash. Scrip is capped. The default option is cash.
- BetMakers’ board, holding ~10% of shares out, unanimously support terms. Completion targeted 3Q27 (Jan-Mar’ 27). ACCC approval required. That’s the wild card.
8. Korea Exchange Designates 36 Companies As Administrative Issues for Potential Delisting
- On 12 August, the KRX designated 36 companies as administrative issues for potential delisting for failing to meet share price and market capitalization standards.
- They could potentially be delisted. There are potential trading opportunities among these 36 stocks.
- The key is to be on the lookout for companies with decent balance sheets that are willing to improve their corporate governance.
9. OOh!media (OML AU): I Squared Emerges with the Winning Bid
- The AFR reports that I Squared emerged with a winning binding proposal for oOh!Media Ltd (OML AU) at A$1.70, a 100.0% premium to the undisturbed price of A$0.85 (28 April).
- The offer is light compared to peer and precedent transactions and is below the 52-week high of A$1.73.
- However, shareholders should be supportive, as the offer was the highest in a competitive auction, and it is uncertain whether the Board’s strategic execution could outperform a 100% takeover premium.
10. Cleanaway Waste (CWY AU): EQT’s A$3.13/Share NBIO Is Fair
- It’s been pretty quiet on the M&A front for Cleanaway Waste (CWY AU). KKR was rumoured to be interested four years ago. Around the time Cleanaway acquired Suez Sydney Assets.
- Now Swedish PE outfit EQT has proposed taking Cleanaway private, via a Scheme, at A$3.13/share, a 32.1% premium to undisturbed. EQT has been afforded nine weeks of exclusive due diligence.
- The indicative offer is subject to FIRB, ACCC, MACs, plus the standard Scheme vote from Cleanaway shareholders. Pricing appears fair. The board is supportive at A$3.13/share.
