Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

<ul>
<li>On 10 October, the Korea Exchange announced a temporary suspension of trading of Eoflow (294090 KS) shares starting 11 October.</li>
<li>Eoflow decided at its board of directors meeting the previous day (10th) to suspend production and sales of Eoflow patches until the outcome of the lawsuit is resolved. </li>
<li>In this insight, we provide various scenario analysis including the worst case, best case, and in-between cases of the Eoflow M&amp;A tender offer process.</li>
</ul>


On 10 October, the Korea Exchange announced a temporary suspension of trading of Eoflow (294090 KS) shares starting 11 October.
Eoflow decided at its board of directors meeting the previous day (10th) to suspend production and sales of Eoflow patches until the outcome of the lawsuit is resolved. 
In this insight, we provide various scenario analysis including the worst case, best case, and in-between cases of the Eoflow M&amp;A tender offer process.


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>In reaction to the preliminary injunction, <a href="https://www.smartkarma.com/entities/eoflow-co-ltd" target="_blank" data-smartkarma-citation="entities:36100:1" rel="noopener">Eoflow (294090 KS)</a> shares were suspended as it is reviewing whether it is subject to a substantive review for KOSDAQ listing eligibility.  </li>
<li>
<a href="https://www.smartkarma.com/entities/medtronic-plc" target="_blank" data-smartkarma-citation="entities:14982:1" rel="noopener">Medtronic Plc (MDT US)</a> is in an unprecedented situation of potentially acquiring a company whose shares are suspended, has a preliminary injunction against it and exposure to possible liabilities. </li>
<li>Medtronic could have prevented this development by reaffirming its commitment to the deal. The transaction is on increasingly shaky grounds, which is reflected in the 38.2% gross spread. </li>
</ul>


In reaction to the preliminary injunction, Eoflow (294090 KS) shares were suspended as it is reviewing whether it is subject to a substantive review for KOSDAQ listing eligibility.  

Medtronic Plc (MDT US) is in an unprecedented situation of potentially acquiring a company whose shares are suspended, has a preliminary injunction against it and exposure to possible liabilities. 
Medtronic could have prevented this development by reaffirming its commitment to the deal. The transaction is on increasingly shaky grounds, which is reflected in the 38.2% gross spread. 


Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>On the 6th of October, a US district court judge<a href="https://storage.courtlistener.com/recap/gov.uscourts.mad.259980/gov.uscourts.mad.259980.126.0.pdf" target="_blank" rel="noopener"> entered a preliminary injunction</a> (PI) against <a href="https://www.smartkarma.com/entities/eoflow-co-ltd" target="_blank" data-smartkarma-citation="entities:36100:1" rel="noopener">EOFlow (294090 KS)</a>, pending a trial. This development should have been expected.</li>
<li>Less expected was the suspension of EOFlow shares today, and the cessation of sales globally. </li>
<li>The latter measure appears extreme, noting the PI addresses only sales in the US, which EOFlow is not permitted anyway, without FDA approval. There's clearly more than meets the eye.</li>
</ul>


On the 6th of October, a US district court judge entered a preliminary injunction (PI) against EOFlow (294090 KS), pending a trial. This development should have been expected.
Less expected was the suspension of EOFlow shares today, and the cessation of sales globally. 
The latter measure appears extreme, noting the PI addresses only sales in the US, which EOFlow is not permitted anyway, without FDA approval. There's clearly more than meets the eye.


EOFlow's Suspension Is Not (All) Negative

<ul>
<li>We 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.</li>
<li>Highest spreads - <a href="https://www.smartkarma.com/entities/haitong-international-securities-group-ltd" target="_blank" data-smartkarma-citation="entities:13153:1" rel="noopener">Haitong International Securities Group (665 HK)</a>, <a href="https://www.smartkarma.com/entities/111-inc" target="_blank" data-smartkarma-citation="entities:27412:1" rel="noopener">111 Inc (YI US)</a>, <a href="https://www.smartkarma.com/entities/eoflow-co-ltd" target="_blank" data-smartkarma-citation="entities:36100:1" rel="noopener">Eoflow (294090 KS)</a>, <a href="https://www.smartkarma.com/entities/hollysys-automation-technologies" target="_blank" data-smartkarma-citation="entities:26078:1" rel="noopener">Hollysys Automation Technologies (HOLI US)</a>, <a href="https://www.smartkarma.com/entities/imax-china-holding-inc" target="_blank" data-smartkarma-citation="entities:888:1" rel="noopener">IMAX China Holding (1970 HK)</a>, BPLANT. 
</li>
<li>Lowest spreads - <a href="https://www.smartkarma.com/entities/yaizu-suisankagaku-industry" target="_blank" data-smartkarma-citation="entities:20044:1" rel="noopener">Yaizu Suisankagaku Industry (2812 JP)</a>, <a href="https://www.smartkarma.com/entities/healius-ltd-6d4d947d-ad32-4aea-b2d8-265f5768b55e" target="_blank" data-smartkarma-citation="entities:14208:1" rel="noopener">Healius (HLS AU)</a>, <a href="https://www.smartkarma.com/entities/t-k-toka-co-ltd" target="_blank" data-smartkarma-citation="entities:18678:1" rel="noopener">T&amp;K Toka Co Ltd (4636 JP)</a>, <a href="https://www.smartkarma.com/entities/pact-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:692:1" rel="noopener">Pact Group Holdings (PGH AU)</a>, <a href="https://www.smartkarma.com/entities/seiko-pmc-corp" target="_blank" data-smartkarma-citation="entities:13752:1" rel="noopener">Seiko Pmc Corp (4963 JP)</a>.</li>
</ul>


We 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 - Haitong International Securities Group (665 HK), 111 Inc (YI US), Eoflow (294090 KS), Hollysys Automation Technologies (HOLI US), IMAX China Holding (1970 HK), BPLANT. 

Lowest spreads - Yaizu Suisankagaku Industry (2812 JP), Healius (HLS AU), T&amp;K Toka Co Ltd (4636 JP), Pact Group Holdings (PGH AU), Seiko Pmc Corp (4963 JP).


Merger Arb Mondays (09 Oct) - Eoflow, Haitong Intl, NWS, Boustead, Newcrest, Liontown, Hollysys

<ul>
<li>The US judge has proposed a preliminary injunction which prevents <a href="https://www.smartkarma.com/entities/eoflow-co-ltd" target="_blank" data-smartkarma-citation="entities:36100:1" rel="noopener">Eoflow (294090 KS)</a> from using <a href="https://www.smartkarma.com/entities/insulet-corp" target="_blank" data-smartkarma-citation="entities:5252:1" rel="noopener">Insulet Corp (PODD US)</a>’s trade secrets and disclosing them to any third party.</li>
<li>Eoflow and other defendants must respond by 5 October. The court hearing is set for 16 October. The potential trial is to be discussed in Spring of 2024.</li>
<li>
<a href="https://www.smartkarma.com/entities/medtronic-plc" target="_blank" data-smartkarma-citation="entities:14982:1" rel="noopener">Medtronic Plc (MDT US)</a> faces a difficult choice. If the injunction is enforced, Medtronic would acquire a ring-fenced asset exposed to potential court-determined liabilities. </li>
</ul>


The US judge has proposed a preliminary injunction which prevents Eoflow (294090 KS) from using Insulet Corp (PODD US)’s trade secrets and disclosing them to any third party.
Eoflow and other defendants must respond by 5 October. The court hearing is set for 16 October. The potential trial is to be discussed in Spring of 2024.

Medtronic Plc (MDT US) faces a difficult choice. If the injunction is enforced, Medtronic would acquire a ring-fenced asset exposed to potential court-determined liabilities. 


EOFLOW/Medtronic Tender: Proposed Preliminary Injunction Is a Problem

South Korea

INTEROJO CO LTD manufactures and markets contact lens.  The Company's main brands are Clalen, Morning-Q, Festival-II, Bandage, Multivision.

Value Added Technology Co., Ltd. develops, manufactures, and engages in sales of digital radiography medical equipments for dental clinics.  The Company also supplies digital sensor for X-ray equipments.

Curexo Inc. distributes medical equipment such as MRI (Magnetic Resonance Imaging) and endoscope used in operating of breast cancer.  The Company also produces goods for aromatic therapy.

InBody Co., Ltd. manufactures and markets a body composition analyzer and other related medical instruments.  The Company supplies its products to the hospitals, clinics, fitness clubs, and households.  Biospace also exports its products to overseas markets, such as America, Europe, and Asia.

Huons Co., Ltd. manufactures pharmaceutical products.  The Company produces medical drugs in the fields of nervous system, sensory organs, anti-histamines, circulatory system, respiratory system, digestive system, metabolic agents and hormones.

Vieworks Company Ltd. designs and manufactures camera systems for digital radiography, digital fluoroscopy, and angiography systems.

Infopia Co., Ltd specializes in developing equipments to prevent heart disease and cancer.  The Company produces heart disease diagnosing kits, cancer diagnosing kits, and remote treatment systems.  Infopia manufactures blood glucose monitoring systems, hemoglobin measuring systems, auto chemical analyzers, and glucose mobile phones.

Suheung Co., Ltd. manufactures hard and soft gelatin capsules for pharmaceutical  industry.  The Company also produces Health & Nutrition Food and hard capsule filling machines.

Access Bio Inc. develops, manufactures, and markets in-vitro diagnostic (IVD) tests.  The Company develops rapid diagnostic test (RDT) for Malaria and Pregnancy.

L&K Biomed Co., Ltd. develops and manufactures medical devices.  The Company's main products include cervical spine devices, 3D wholebody scanner and bio-similar products.

OraSure Technologies, Inc. develops, manufactures, and markets medical devices and diagnostic products.  The Company supplies oral fluid collection devices and assays to the life insurance industry and public health markets for the detection of antibodies to HIV.  OraSure also supplies oral fluid testing solutions for drugs-of-abuse testing.

Utah Medical Products, Inc. develops, manufactures, assembles, and markets a broad range of disposable and reusable specialty medical devices. The Company's products are designed to provide better health outcomes for patients and their care-providers. Utah Medical's primary focus is healthcare for women and their babies.

United Orthopedic Corporation manufactures orthopedic implants and precision medical devices.  The Company's products include hip replacement system, knee replacement system, as well as oncology and custom implants.  UOC also acts as an OEM (Original Equipment Manufacturer) supplier.

St.Shine Optical Co., Ltd. specializes in manufacturing cast-molding soft contact lens, including disposable and frequent replacement contact lens.  The Company also produces lathe-cutting contact lens.  St.Shine Optical markets its products under the brand name Ticon.

PW Medtech Group Ltd is a medical device developer, manufacturer and marketer in China.  The Company's products include infusion products and orthopedic implant products.

AngioDynamics, Inc. designs, develops, manufactures, and markets therapeutic and diagnostic devices.  The Company's products enable interventional physicians to treat peripheral vascular disease and other non-coronary diseases. AngioDynamic's product lines consist of angiographic catheters, hemodialysis catheters, image guided vascular access products, and thrombolytic products.

Bioteque Corporation manufactures and markets disposable medical products. The Company's products include hemodialysis blood line sets, AV (arteriovenous) fistula needles, IV (intravenous) infusion bags, IV infusion sets, drainage bags, precision infusion sets, surgical drainage tubes, medical catheters. medical components, and homecare items.

Scivision Biotech Inc produces medical Hyaluronic Acid using fermentation biotechnology. The company products include Hya-Dermis and Hya-Joint injection, skin care series and health food.

MEDIKIT Co., LTD. mainly manufactures medical devices for use in blood-related tests and treatments such as transfusion and intravenous introduction.  The Company produces a variety of catheters for use in kidney dialysis, angiography, transfusion, and vessel access.

Tristel plc develops, manufactures, and markets infection control, contamination control, and hygiene products. It offers hospital infection prevention and control, and hygiene products based on its proprietary chlorine dioxide chemistry technology; disinfection and cleaning products for veterinary and animal welfare sectors; and contamination control products for pharmaceutical and personal care industries. The company markets its products under Tristel, Crystel, Anistel, Dermastel, Enzystel, Medistel, Airstel, and Odostel brand names. It markest its products directly and through distributors and dealers in the United Kingdom, Germany, Switzerland, Austria, the Russian Federation, China, Hong Kong, New Zealand, and internationally. Tristel plc was founded in 1993 and is based in Snailwell, the United Kingdom.

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.

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Eoflow (294090 KS)

Eoflow: Temporary Trading Suspension

On 10 October, KRX announced a temporary suspension of trading of Eoflow starting 11 October. We provide various scenario analysis including the...

Douglas Kim

EOFLOW/Medtronic Tender: On Life Support

Medtronic could have prevented this development by reaffirming its commitment to the deal. The transaction is on increasingly shaky grounds, which...

Arun George

EOFlow's Suspension Is Not (All) Negative

The latter measure appears extreme, noting the PI addresses only sales in the US, which Eoflow is not permitted anyway, without FDA approval....

David Blennerhassett

Merger Arb Mondays (09 Oct) - Eoflow, Haitong Intl, NWS, Boustead, Newcrest, Liontown, Hollysys

This week, the highest gross spreads are Haitong Intl (114.1%), 111 (45.2%), Eoflow (40.5%), Hollysys (20.4%), IMAX China (15.9%), BPLANT (11.5%),...

Arun George

EOFLOW/Medtronic Tender: Proposed Preliminary Injunction Is a Problem

On 6 October, the US judge "after a hearing, and after careful consideration of the pleadings and record evidence" handed down a preliminary...

Arun George

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