This weekly newsletter pulls together summaries of the top ten most-read Insights across Event-Driven and Index Rebalance on Smartkarma.
Receive this weekly newsletter keeping 45k+ investors in the loop
1. HSBC (5 HK)’s Clean Offer for Hang Seng (11 HK)’s Minorities
- Hang Seng Bank (11 HK) has announced an Offer from controlling parent (63.3551%), HSBC Holdings (5 HK), by way of a Scheme, in a HK$106bn (US$13.6bn) deal.
- The Scheme Consideration is HK$155/share, a 30.3% premium to last close. The price is final. A “third interim dividend” will be added. Optically, the price is bang on.
- The long stop for conditions is the 30th September 2026. I think this transaction can be wrapped up in around five months.
2. Tata Motors (TTMT IN) Demerger: Interesting Index Implications
- Tata Motors (TTMT IN) is demerging the company into two separate listed entities that will focus on the Passenger Vehicle business and the Commercial Vehicle businesses.
- Based on the estimated valuation for the two entities, both stocks will continue to remain in the MGlobal Index and the FGlobal Index.
- NIFTY and SENSEX trackers will need to sell their Commercial Vehicle business holdings soon after listing. There could be selling in the Passenger Vehicle business holdings at a later rebalance.
3. [Japan Event] Sony Financial (8729 JP) Moves On From ToSTNeT-3 Buybacks, Now In the Market
- Sony Financial Group (8729 JP) started ToSTNeT-3 buybacks last week and did one this week to jumpstart the buyback, cushioning the Nikkei 225 deletion on 29 Sep and subsequent overhang.
- In three ToSTNeT-3 buybacks in 6 trading days spending ¥28.9bn, the company bought back 177.513mm shares or 2.5% of shares out, or about 6.2% of Max Real World Float (MRWF).
- With ¥71.1bn left, at last that’s 460mm shares, or 16.2% of MRWF. Over 10mos that is 1.62%/month. That will boost Mar26 DPS, Mar27 DPS projections, EPS, etc.
4. Dongfeng Motor (489 HK): VOYAH Listing Docs Underscore the Upside
- On 22 August, Dongfeng Motor (489 HK) disclosed a pre-conditional privatisation by merger by absorption by Dongfeng Motor Corporation, along with a proposed distribution and listing of VOYAH shares.
- The VOYAH application proof, filed on 2 October, points to strong fundamentals and suggests that the appraised value of VOYAH and the offer are conservative.
- Based on the data points from the application proof, I calculate that the implied offer is HK$12.11-12.25 per H Share, a 11.6%-12.9% premium to the appraised value of HK$10.85.
5. Korea’s Mandatory Treasury Share Cancellation Situation Creates New Passive Flow Dynamics
- KRX may preemptively adjust KOSPI 200 screening, switching from full market cap to market cap excluding treasury shares for index inclusion.
- With treasury-share cancellation likely this quarter, KRX may act before June ’26. For December KOSPI 200, we should run both full-cap and ex-treasury screens; flows could behave unusually.
- Focusing on Hanssem (009240 KS) and Taekwang (003240 KS); borderline, high treasury shares, potential KOSPI 200 exclusion, making them key flow-sensitive setups for December reshuffle.
6. Dongfeng (489 HK): On VOYAH’s Updated Financials
- On the 22nd August 2025, SOE-backed Dongfeng Motor (489 HK) announced a privatisation; together with a concurrent listing of its EV arm, VOYAH.
- Dongfeng has now released the application proof for VOYAH, with finances through to July 2025. Of interest, VOYAH is in the black for 7M25.
- The market is implying a price-to-trailing-sales of 1.5x for VOYAH versus the basket average of 2.1x.
7. [Japan Activism] Sun Corp (6736) Gets ANOTHER Public Activist – ValueAct Reports 7.9%
- Today after the close, Value Act reported that it owned 7.87% of shares outstanding in Sun Corp (6736 JP) and it may make proposals to management.
- This has been trading cheaply (and I pointed it out on 13 Aug and 12 Sep). Cellebrite DI (CLBT US) is up 35% in those 8 weeks. Sun Corp +50%.
- ValueAct had owned 4.9+% for at least a few months before, but now it has gone public. They were likely in already under a different name in March, now public.
8. Merger Arb Mondays (06 Oct) – Kangji, Soft99, I-Net, Daiseki, Mandom, Changhong, Smart Share
- I summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
- Highest spreads: Smart Share Global (EM US), Mayne Pharma (MYX AU), ENN Energy (2688 HK), Soft99 Corp (4464 JP), I Net Corp (9600 JP), Daiseki Eco. Solution (1712 JP).
- Lowest spreads: Bright Smart Securities (1428 HK), Pacific Industrial (7250 JP), Humm Group (HUM AU), Mandom Corp (4917 JP), Seven West Media (SWM AU), Ainsworth Game Technology (AGI AU).
9. [Japan M&A/Activism] Soft99 Board Rebuts Effissimo’s Rebuttal. Still An Awful “Fiduciary” Response
- Today after the close, Soft99 Corp (4464 JP)‘s Board issued a statement on “Our View” of Effissimo’s “Our View” Press Release. It’s bad.
- But it points out the “weaknesses” that Effissimo’s Tender Offer Press Release had as it concerns a counterbid. And that tells you how Effissimo should amend their Tender Offer docs.
- Soft99 Board’s response is interesting. It asks Effissimo to not be coercive (i.e. bid for 50%+) in response to the MBO Bid’s coerciveness. Not a winning argument but not impossible.
10. [Japan Activism] Mandom (4917 JP) MBO Sees Murakami Pushing Harder, Now at 16.59%
- Four weeks ago, CVC announced a family-led MBO of hair care and cosmetics company Mandom Corp (4917 JP) at a price which was decidedly too light, well below company plans.
- One activist wrote a letter clearly calling them out for accepting a low-ball price well below the Medium Term Management Plan target. Another bought a lot of shares.
- On 25 September, Murakami-san and affiliates reported an 8.39% position. Seven trading days later it is 16.59% and the shares are up small from my last piece + 1.
