Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

Event-Driven

SK Innovation Co., Ltd. refines, markets, and distributes oil.  The Company produces a variety of petroleum products, such as gasoline, kerosene, liquefied petroleumgas (LPG), and diesel oil.  SK Energy also manufactures petrochemical p roducts, including paraxylene, synthetic resins, styrene monomer, and ethylene.

<ul>
<li>NPS's opposition suggests a likely vote against the merger, but if they plan to exercise appraisal rights, they might abstain to preserve that option.</li>
<li>NPS typically exercises appraisal rights when the spread exceeds 5%, as seen in past mergers like Celltrion and Samsung. They didn’t act when the spread was below 5%.</li>
<li>The key question is whether SK Innovation can boost its stock price to avoid NPS exercising rights. Otherwise, the merger may pass, but the stock could drop significantly.</li>
</ul>


NPS's opposition suggests a likely vote against the merger, but if they plan to exercise appraisal rights, they might abstain to preserve that option.
NPS typically exercises appraisal rights when the spread exceeds 5%, as seen in past mergers like Celltrion and Samsung. They didn’t act when the spread was below 5%.
The key question is whether SK Innovation can boost its stock price to avoid NPS exercising rights. Otherwise, the merger may pass, but the stock could drop significantly.


NPS Effectively Decides to Exercise Appraisal Rights Against SK Innovation: Trading Considerations

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Eoflow Co.,Ltd. develops and sells medical devices. The Company produces and sells wearable disposable insulin pumps and other products. Eoflow markets its products throughout Korea.

<ul>
<li>After the market close on 21 August, Eoflow (294090 KS) announced a rights offering capital raise of 9.1 million new shares, representing share dilution of 23%.</li>
<li>Based on the expected rights offering issue price of 9,040 won, the company is expected to raise 82.2 billion won in this capital raise. </li>
<li>Eoflow has monthly cash burn rate of about 3.3 billion won. If the rights offering is successful, it would have adequate capital resources for about a couple of years. </li>
</ul>


After the market close on 21 August, Eoflow (294090 KS) announced a rights offering capital raise of 9.1 million new shares, representing share dilution of 23%.
Based on the expected rights offering issue price of 9,040 won, the company is expected to raise 82.2 billion won in this capital raise. 
Eoflow has monthly cash burn rate of about 3.3 billion won. If the rights offering is successful, it would have adequate capital resources for about a couple of years. 


Eoflow: Rights Offering of 82 Billion Won and [Medtronic & Eoflow - Don't You Forget About Me]

Equity Capital Markets

Peptron Co., Ltd. is a pharmaceuticals company that focuses on peptide engineering and developing sustained-release medication technology.  The Company's main technologies include PeptrEX and SmartDepot.

<ul>
<li>Peptron’s lack of single-stock futures means no risk-free arbitrage but also less speculative selling, making the 25% discount an attractive outright position opportunity.</li>
<li>The low capital increase rate may stabilize the stock price, and more forfeited shares could lower the cost of securing subscription rights during the trading window.</li>
<li>Consider buying rights during the trading period or targeting forfeited shares. Conservatively estimate the final offering price range to set a profitable cost for securing rights.</li>
</ul>


Peptron’s lack of single-stock futures means no risk-free arbitrage but also less speculative selling, making the 25% discount an attractive outright position opportunity.
The low capital increase rate may stabilize the stock price, and more forfeited shares could lower the cost of securing subscription rights during the trading window.
Consider buying rights during the trading period or targeting forfeited shares. Conservatively estimate the final offering price range to set a profitable cost for securing rights.


Peptron Rights Issue: The 25% Discount Is an Attractive Outright Position Opportunity

<ul>
<li>On 16 August, Peptron (087010 KS) announced that it decided to increase capital through a rights offering worth about 120 billion won, involving 2.64 million shares (12.8% of outstanding shares). </li>
<li>The expected rights offering price is 45,450 won, which is 22% lower than current price.</li>
<li>We are negative on Peptron's rights offering mainly due to much lower expected rights offering price, concerns about additional rights offering next 2-3 years, and continued lack of profitability.</li>
</ul>


On 16 August, Peptron (087010 KS) announced that it decided to increase capital through a rights offering worth about 120 billion won, involving 2.64 million shares (12.8% of outstanding shares). 
The expected rights offering price is 45,450 won, which is 22% lower than current price.
We are negative on Peptron's rights offering mainly due to much lower expected rights offering price, concerns about additional rights offering next 2-3 years, and continued lack of profitability.


Peptron: Rights Offering of 120 Billion Won

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Equity Bottom-Up

Fox Corporation operates as an entertainment company. The Company produces and licenses news, sports, and entertainment content for distribution through cable television systems, direct broadcast satellite operators, telecommunications companies, and online video distributors. Fox also manages broadcast studios, theaters, editing bays, sound stages, and other production facilities.

<ul><li>Fox Corporation recently concluded its fiscal year 2024, reporting significant financial stability and operational successes.</li><li>The company highlighted a revenue of nearly $14 billion and an EBITDA of $2.88 billion for the fiscal year, exemplifying strong performance even in the absence of high-profile events like the Super Bowl or the FIFA Men's World Cup.</li><li>The adaptations and growth in Fox’s various segments, especially Tubi, Fox News, and Fox Sports, underscore the company’s strategic execution and market adaptability.</li></ul>

Fox Corporation recently concluded its fiscal year 2024, reporting significant financial stability and operational successes.The company highlighted a revenue of nearly $14 billion and an EBITDA of $2.88 billion for the fiscal year, exemplifying strong performance even in the absence of high-profile events like the Super Bowl or the FIFA Men's World Cup.The adaptations and growth in Fox’s various segments, especially Tubi, Fox News, and Fox Sports, underscore the company’s strategic execution and market adaptability.

Fox Corporation: Leveraging Sports Broadcasting Rights Propelling Near Term Growth! - Major Drivers