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] Yamada Denki (9831) And EDION (2730) Merger? Yamada Cheap But Weak Recent History
- Yamada Denki (9831 JP) is Japan’s top electronics retailer by sales. Edion Corp (2730 JP) is #5. The Nikkei carried an article last night saying they intended to merge.
- Both (Yamada, Edion) confirmed the talks, and board meetings set for tomorrow will likely approve path forward for negotiations. That’s not a done deal, but it gets definitive talks.
- Yamada has suffered mightily the last few years. Guidance this next year sees a rebound and on a forward basis, is cheap vs Peers (also cheap on a PBR basis).
2. Kakaku.com (2371 JP): Digital Garage Moves to Thwart Bain/LY
- On 4 June, the Nikkei reported that Digital Garage (4819 JP) will not accept Bain/LY (4689 JP)‘s higher offer for Kakaku.com Inc (2371 JP), as it is not feasible.
- Digital Garage’s reasoning is not credible. The most likely reason is that, unlike the EQT offer, Bain/LY are not allowing reinvestment to take a 20% stake in the offeror.
- While a setback, Bain/LY can succeed if it secures support from KDDI Corp (9433 JP) and Oasis. Irrespective of Digital Garage’s stance, EQT will likely need to bump to succeed.
3. [Japan Event] DeNA (2432 JP) – BIG Buyback, Asset Sale, Murakami Selling, but Squeeze Building?
- DeNA (2432 JP) announced a large buyback at end-Feb 2026. They also announced a sale of Nintendo shares and the day before, Murakami Group announced a drop in shareholdings.
- Shares were sold, the big buyback started. They were 8.4% of volume in March, 15.5% in April. Theoretically, the buyback goes to Feb2027. I expect it completes by end-July 2026.
- Mid-May 2026 DeNA announced it would sell shares in GO (581A JP) at IPO. At expected IPO price less 5%, that’s ¥36bn. Murakami is still selling.
4. MGM China (2282 HK): An MGO Based on the Chain Principle Is Not a Sure Thing
- On 1 June, MGM Resorts International (MGM US) confirmed that it had received an offer from People Incorporated (IAC) (IAC US) to acquire it for US$48.30 per share.
- MGM China (2282 HK) rose 7% due to the near-term possibility that the acquisition could trigger a mandatory general offer (downstream offer) and the long-term possibility of a privatisation offer.
- The triggering of an MGO based on the chain principle is not guaranteed, and the potential offer would be well below the last close. Nevertheless, MGM China’s valuation remains undemanding.
5. [Japan Buyback] Kawasaki Kisen/KLINE (9107) – Big Buyback Advanced in Size and Timing, More Later
- In mid-May 2026, Kawasaki Kisen Kaisha (9107 JP) said that in preparation for its next Mid-Term-Management-Plan starting next year, they allocated ¥50bn to a buyback, and ¥80bn more sometime later.
- On 29 May, KLINE decided “sometime later” meant now. They upped their buyback plan from ¥50bn to ¥130bn and started with a big ToSTNeT-3. Insiders agreed. They sold ¥50.7bn.
- The other ¥79.3bn/24.8mm shares will be bought in the market over four months. At current price, that’s ¥62bn. Expect more later.
6. Local Read Through on Samsung Special Dividend Sizing for This Year
- Samsung sticks to legacy record dates and is unlikely to adjust dividends intra year, with special returns typically confirmed only after earnings and FCF are effectively locked.
- Year end FCF driven special return setup is creating pre positioning flow and dividend arb via uncertainty and spot futures dislocation as market front runs mix.
- Mirae shows wide special dividend range with no Samsung guidance, while market consensus anchors FCF at 250 to 270 trillion implying 115 to 125 trillion for special plus buyback split.
7. Merger Arb Mondays (01 Jun) – Taiyo, Kodensha, Shinko Shoji, Atlas, Qoria, OOh!media, Tourism Hldgs
- I summarise the latest spreads and newsflow for the merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, the Philippines, Thailand, and Chinese ADRs.
- Highest spreads: Skyworth (751 HK), ENN Energy (2688 HK), Changhong Jiahua (3991 HK), Qoria (QOR AU), Humm Group (HUM AU), Tourism Holdings (THL NZ), European Lithium (EUR AU).
- Lowest spreads: Taiyo Holdings (4626 JP), Kakaku.com Inc (2371 JP), Magnetic Resources Nl (MAU AU), Nippon Dry Chemical (1909 JP), Matsuya R&D (7317 JP), Paltac Corporation (8283 JP).
8. Shinko Shoji (8141 JP): An Increasing Chance for a Bump as Murakami Exits
- On 15 May, Shinko Shoji (8141 JP) announced a tender offer from Kaga Electronics (8154 JP) at JPY1,580. While Murakami, the largest shareholder, provided an irrevocable, it could sell down.
- Murakami ceased to be a substantial shareholder by reducing its stake from 15.85% to 4.53% of the outstanding shares. There is a high probability that they are no longer shareholders.
- The Murakami entities disposed of the shares from 18 to 27 May when the shares were trading through terms, suggesting they were bought by one or more activists.
9. Diller’s Offer For MGM Resort Should Trigger A Downstream Offer For MGM China
- Barry Diller’s People Inc. is offering to buy MGM Resorts International (MGM US) at US$48.30/share. People Inc., formerly known as IAC, owns ~26.1% stake in MGM Resorts.
- MGM Resorts owns 55.95% in MGM China (2282 HK). A successful Offer should require People Inc to make a downstream Offer for MGM China; unless its obtains an SFC waiver.
- It should also kick off a regulatory vetting process by the Macau government on MGM China’s 10-year gaming concession.
10. Hynix Expiry Setup Spot Negative Both Roll and Non Roll, Key for Trades Vs Square
- Hynix futures open interest trends lower since June 2 with LPs still rolling exposure into next month, while aggressive daily rolls are pressuring Hynix spot and deepening front month backwardation.
- Desks are focused on non rolled size into next Thursday expiry, with potential forced unwind from long cash short futures setups driving spot selling and higher volatility risk.
- Hynix setup is spot negative into expiry in both roll and non roll cases, a key factor for structuring trades into next Thursday outright or relative value versus Square.
