Weekly Top Ten Event-Driven and Index Rebalance – Dec 14, 2025

1. AU Small Finance Bank (AUBANK IN): Increased FOL & Large Passive Flows/ Impact

By Brian Freitas, Periscope Analytics

• AU Small Finance Bank Limited (AUBANK IN) has received approval from the Ministry of Finance to increase its Foreign Ownership Limit from 49% to 74% (the maximum permitted).
• The increased FOL will result in passive inflows from global index trackers in February and March. The inflows are multiple days of ADV.
• There has been little increase in positioning. The increased Foreign Ownership Limit and the passive flows to come could lead to the stock moving higher over the next few weeks.

2. More Detailed Insight into Hynix’s Internal Situation Regarding the ADR Issue

By Sanghyun Park, Clepsydra Capital

• They’re maxing out M15X ahead of schedule, facing a fab gap until ’27, and now need more capex than their KRW 28tn cash pile comfortably covers.
• SK doesn’t want an Hynix ADR; they’re focused on tapping the KRW 150tn Growth Fund to fill the capex gap while avoiding dilution and protecting their already-fragile control stack.
• ADR noise spiked because Hynix’s near-term capex needs exceed Growth Fund capacity, pushing them toward a 2.4% treasury dump—but I still don’t see SK pulling the ADR trigger.

3. Toyota Industries (6201 JP): Elliott Ramps up the Pressure

By Arun George, Global Equity Research Ltd

• Elliott has filed a substantial shareholder notice reporting a Toyota Industries (6201 JP) ownership of 16.3 million or 5.01% of outstanding shares.
• The disclosure is likely a tactic to pressure Toyota Fudosan (offeror) and also a useful signalling tactic to other minorities that Elliott is committed to securing a bump.
• A potential bump could reach JPY19,000. While this would require an additional US$4 billion, financing should not be an issue as the book value (understated) is close to JPY18,000. 

4. Makino Milling Machine (6135 JP): Tender Offer Risk/Reward

By Arun George, Global Equity Research Ltd

• Makino Milling Machine Co (6135 JP)’s pre-conditional tender offer from MBK Partners is at JPY11,751 per share. The gross spread has increased to 9.9% due to several concerns.
• The wide gross spread reflects the risk in satisfying the precondition, the fallout from the Homeplus saga and breaching the long stop date (16 January 2026).
• While these concerns have merit, there are mitigating factors. The risk/reward is favourable as the upside (9.9% spread) exceeds the downside (6.3% to my estimated deal break price). 

5. Read-Through on the Samsung/Hynix ADR-Listing Noise

By Sanghyun Park, Clepsydra Capital

• ADR odds are tiny. Both Samsung and Hynix have thin control stakes, making governance risk too high. Neither is willing to chase a valuation pop at the expense of stability.
• Still can’t ignore it, since the ADR chatter is meaningfully swinging the pair trades. Samsung pref spread and Hynix/Square are both getting pushed around.
• ADR noise cooled today, but it can easily resurface and skew the setup. Treat as noise, but be ready to hit aggressive reversion trades when it pops again.

6. [Japan Activism/M&A] Activist Launches Partial Tender to Put Microcap Broadmedia (4347 JP) In Play

By Travis Lundy, Quiddity Advisors

• Today after the close, Broadmedia Corp (4347 JP) announced that UK-based Japan activist AVI and one of its funds would launch a tender offer for just over 10% of shares.
• The Tender Offer comes at a 29.5% premium, and it would take the activist to ~40% – close to board-spilling influence.
• This creates an interesting setup. One wonders whether this is meant to spill the Board post-tender, and whether the Company will seek alternate solutions.

7. [Japan M&A] CEO & Chairman Entice GS to Sponsor an MBO for Recently Lackluster Raksul (4384)

By Travis Lundy, Quiddity Advisors

• Raksul Inc (4384 JP) is a business roll-up business. They do printing, and advertising, and marketing, and supply. They want to be all things to all SMEs. 
• They are pretty good at it. Revenues and EBIT have been growing at 20-30% a year for years, and are scheduled to grow 19% and 26% for several years ahead.
• The bid is up 40% from last, but that gets them to a 30-month high. The register is very open. Lots of active institutional shareholders who have to agree. Maybe.

8. A Potential Listing of ADRs for SK Hynix Using Its Treasury Shares?

By Douglas Kim, Douglas Research Advisory

• According to numerous local media, SK Hynix is considering on listing its treasury shares (2.4% of outstanding shares representing 17.4 million shares) as ADRs.
• SK Hynix could cancel its treasury shares or list them as ADRs. The bigger bang for the buck will likely be to list them as ADRs. 
• By listing its shares as ADRs, the valuation gap between SK Hynix and other listed peers (such as MU and TSMC) could be reduced. 

9. Strategy (MSTR US)’s Bitcoin Premium Evaporates. And Then Some

By David Blennerhassett, Quiddity Advisors

• Strategy (MSTR US)‘s market cap has for near-on five years, traded at a premium to its bitcoin holdings. 
• The backbone of Strategy’s levered strategy is issue new shares or debt, acquire more bitcoins, which in turn, boost the share price. Rinse and repeat. Until the music stops.
• That market cap is now at its widest discount in five years. And chairman Michael Saylor scandalously mooted the company may sell some bitcoins IF the discount persists.

10. Hynix & Square L2 Flags Set to Squeeze Spread Near Term

By Sanghyun Park, Clepsydra Capital

• SK Hynix and SK Square hit L2 flags; cash-only until Dec 24. Margin off, >40% two-day rip triggers halt. L2 lifts if below T-5/+45%, T-15/+75%, and 15-day high.
• L2’s usually a non-event, but this time the margin freeze probably smacks Hynix harder. Key trigger is staying below the 15-day high: Hynix ₩587,000, Square ₩324,000.
• Govt set to roll out AI-semiconductor holdco deregulation this week, boosting AI holdcos like Square and juicing a near-term Square-over-Hynix trade opportunity.