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

<ul>
<li>Hankook &amp; Company is unexpectedly entering Autos, the only large-cap inclusion, likely getting a significant weight and facing a massive flow impact.</li>
<li>Like BBIG, this single-day flow event driven by one or two ETFs means smaller front-running impact, but names like Hankook &amp; Company could see early positioning due to massive flows.</li>
<li>I'll position in big impact names two days before the ETF rebalance trading. I’ll then go long on a basket of those with over 0.5x ADTV at Wednesday’s close.</li>
</ul>


Hankook &amp; Company is unexpectedly entering Autos, the only large-cap inclusion, likely getting a significant weight and facing a massive flow impact.
Like BBIG, this single-day flow event driven by one or two ETFs means smaller front-running impact, but names like Hankook &amp; Company could see early positioning due to massive flows.
I'll position in big impact names two days before the ETF rebalance trading. I’ll then go long on a basket of those with over 0.5x ADTV at Wednesday’s close.


KRX Sector Rebalance Shocker: Massive Flow Impact on Hankook & Company

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>The Cho brothers are currently sparring over control of <strong><a href="https://www.smartkarma.com/entities/hankook-company-co-ltd" target="_blank" data-smartkarma-citation="entities:19369:1" rel="noopener">Hankook &amp; Company (000240 KS)</a></strong>, and in turn, its 30.7% stake in <strong><a href="https://www.smartkarma.com/entities/hankook-tire-technology" target="_blank" data-smartkarma-citation="entities:20031:1" rel="noopener">Hankook Tire (161390 KS)</a></strong>.</li>
<li>After the honorary chairman of Hankook backed the younger son (&amp; chairman of Hankook), PE-outfit MBK, aligned with the elder son, bumped its public tender Offer by 20% to ₩24,000/share.</li>
<li>Hankook is currently trading 27.3% adrift of the revised terms. That pretty much sums up the situation. The public tender closes on December 25. However, December 23-25 are holidays.</li>
</ul>


The Cho brothers are currently sparring over control of Hankook &amp; Company (000240 KS), and in turn, its 30.7% stake in Hankook Tire (161390 KS).
After the honorary chairman of Hankook backed the younger son (&amp; chairman of Hankook), PE-outfit MBK, aligned with the elder son, bumped its public tender Offer by 20% to ₩24,000/share.
Hankook is currently trading 27.3% adrift of the revised terms. That pretty much sums up the situation. The public tender closes on December 25. However, December 23-25 are holidays.


<ul>
<li>Critical now is estimating MBK's achievable volume in the tender offer, a key indicator for assessing cancellation risk. Evidence suggests few allies for Cho Hyun-beom, prompting MBK's strategic persistence.</li>
<li>MBK can secure 23.58%, but NPS's involvement is pivotal. If neutral, MBK aims for 19.55%, below the minimum. MBK proceeds with a revised offering price, anticipating NPS participation.</li>
<li>Though the FSS investigation may favor MBK, a successful tender offer depends on achieving 87% participation. The higher-than-expected likelihood of success hints at a strong upward stock adjustment from Monday.</li>
</ul>


Critical now is estimating MBK's achievable volume in the tender offer, a key indicator for assessing cancellation risk. Evidence suggests few allies for Cho Hyun-beom, prompting MBK's strategic persistence.
MBK can secure 23.58%, but NPS's involvement is pivotal. If neutral, MBK aims for 19.55%, below the minimum. MBK proceeds with a revised offering price, anticipating NPS participation.
Though the FSS investigation may favor MBK, a successful tender offer depends on achieving 87% participation. The higher-than-expected likelihood of success hints at a strong upward stock adjustment from Monday.


Hankook & Co Tender: Clues to Gauge Cancellation Risk Obtained Through Local Channels So Far

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<ul>
<li>MBK Partners has increased its <a href="https://www.smartkarma.com/entities/hankook-company-co-ltd" target="_blank" data-smartkarma-citation="entities:19369:1" rel="noopener">Hankook &amp; Company (000240 KS)</a> partial tender offer to KRW24,000 per share, 20.0% and 51.4% above its previous offer and the last close, respectively.</li>
<li>While the offer is attractive, we estimate that the minimum acceptance condition of 19.3 million shares (20.35% of outstanding shares) requires an 84.3% minority acceptance rate. </li>
<li>The minority acceptance rate is challenging unless MBK can secure a ruling preventing share purchases from Cho Yang-rai, who disclosed a 2.72% stake on 14 December and opposes the tender. </li>
</ul>


MBK Partners has increased its Hankook &amp; Company (000240 KS) partial tender offer to KRW24,000 per share, 20.0% and 51.4% above its previous offer and the last close, respectively.
While the offer is attractive, we estimate that the minimum acceptance condition of 19.3 million shares (20.35% of outstanding shares) requires an 84.3% minority acceptance rate. 
The minority acceptance rate is challenging unless MBK can secure a ruling preventing share purchases from Cho Yang-rai, who disclosed a 2.72% stake on 14 December and opposes the tender. 


Hankook & Company (000240 KS): MBK Raises Partial Offer to KRW24,000

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<ul>
<li>After market close on 15 December, MBK Partners raised the tender offer price of Hankook &amp; Company by 20% to 24,000 won, which is now 51.4% higher than current price. </li>
<li>With Cho Yang-Rae's recent acquisition of shares, Cho Hyun-beom, Cho Yang-rae, and related parties now own about 45.6% of Hankook &amp; Co, up from 42.9% previously. </li>
<li>MBK Partners has requested an official investigation by the FSS, claiming that Cho Yang-rae and HY have violated the Capital Markets Act by recently purchasing shares of Hankook &amp; Co.</li>
</ul>


After market close on 15 December, MBK Partners raised the tender offer price of Hankook &amp; Company by 20% to 24,000 won, which is now 51.4% higher than current price. 
With Cho Yang-Rae's recent acquisition of shares, Cho Hyun-beom, Cho Yang-rae, and related parties now own about 45.6% of Hankook &amp; Co, up from 42.9% previously. 
MBK Partners has requested an official investigation by the FSS, claiming that Cho Yang-rae and HY have violated the Capital Markets Act by recently purchasing shares of Hankook &amp; Co.


MBK Partners Raises Tender Offer Price of Hankook and Co to 24,000 Won

South Korea

Hankook & Company Co., Ltd. operates as a holding company. The Company operates batteries manufacturing, leasing, management consulting, tires production, and other businesses. Hankook provides services worldwide.

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Hankook & Company (000240 KS)

KRX Sector Rebalance Shocker: Massive Flow Impact on Hankook & Company

This post breaks down the surprises from the KRX Sector Indexes' September rebalance event, which is set to take place at the close on the 12th,...

Sanghyun Park

StubWorld: Hankook's Bothersome Brothers

This partial tender Offer looks dead in the water. Chances are Hankook further declines whether Chairman Cho, inter alia, continue purchasing...

David Blennerhassett

Hankook & Co Tender: Clues to Gauge Cancellation Risk Obtained Through Local Channels So Far

This post discloses what has been obtained so far through various local channels regarding the cancellation risk of the tender offer involving...

Sanghyun Park