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

<h2>Swap overview</h2><p>This merger swap is very similar to the recent case of GS Retail &amp; GS Home Shopping. Green Cross Lab Cell will merge with Green Cross Cell through a stock swap. The Green Cross Cell shareholders will get 0.4023542 Green Cross Lab Cell shares for each Green Cross Cell share.</p><table class="table table-striped">
<colgroup>
<col width="300">
<col width="300">
</colgroup>
<tbody>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Swap overview"}'>Swap overview</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Type"}'>Type</td>
<td data-sheets-value='{"1":2,"2":"Stock swap"}'>Stock swap</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Acquirer"}'>Acquirer</td>
<td data-sheets-value='{"1":2,"2":"Green Cross Lab Cell Corp (144510)"}'>Green Cross Lab Cell Corp (144510)</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Target company"}'>Target company</td>
<td data-sheets-value='{"1":2,"2":"Green Cross Cell Corp (031390)"}'>Green Cross Cell Corp (031390)</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Swap price for Green Cross Lab Cell"}'><strong>Swap price for Green Cross Lab Cell</strong></td>
<td data-sheets-value='{"1":3,"3":102882}'><strong>₩102,882</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Swap price for Green Cross Cell"}'><strong>Swap price for Green Cross Cell</strong></td>
<td data-sheets-value='{"1":3,"3":41395}'><strong>₩41,395</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Swap ratio"}'><strong>Swap ratio</strong></td>
<td data-sheets-value='{"1":3,"3":0.40235415330184093}' data-sheets-numberformat='{"1":2,"2":"#,##0.0000000","3":1}' data-sheets-formula="=R[-1]C[0]/R[-2]C[0]"><strong>0.4023542</strong></td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><h2>Schedule</h2><p>The record date for securing voting rights at the general shareholders' meeting is August 2nd. The last day to secure the purchase right was yesterday. If you have purchased stocks by yesterday, you can exercise your stock purchase right by notifying your dissenting opinion between August 27 and September 13.</p><p>The exercise period of the stock appraisal right is from September 13th to October 4th. Trading of Green Cross Cell will be suspended from October 28th to November 11th, and new shares of Green Cross Lab Cell will be listed on November 12th.</p><table class="table table-striped">
<colgroup>
<col width="300">
<col width="300">
</colgroup>
<tbody>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Schedule"}' data-sheets-note="Sang Hyun Park: We have to buy shares until BOD+1 to be eligible to receive stock purchase rights. We then have to notify our dissenting opinion until the end of dissenting opinion notice period.">Schedule</td></tr>
<tr>
<td><span data-sheets-value='{"1":2,"2":"Last day to own stock purchase rights"}' data-sheets-userformat='{"2":15041,"3":{"1":0},"9":0,"10":1,"12":0,"14":{"1":2,"2":4408131},"15":"Courier New","16":9}'>Last day to own stock purchase rights</span></td>
<td><span data-sheets-value='{"1":3,"3":44031}' data-sheets-userformat='{"2":15041,"3":{"1":5,"2":"yyyy. mm. dd","3":1},"9":2,"10":1,"12":0,"14":{"1":2,"2":4408131},"15":"Courier New","16":9}'>2020. 07. 19</span></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Record date of shareholder register"}'>Record date of the shareholder register</td>
<td data-sheets-value='{"1":3,"3":44045}' data-sheets-numberformat='{"1":5,"2":"yyyy. mm. dd","3":1}'>2020. 08. 02</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Dissenting opinion notice"}'><strong>Dissenting opinion notice</strong></td>
<td data-sheets-value='{"1":2,"2":"2020. 08. 27 ~ 09. 13"}'><strong>2020. 08. 27 ~ 09. 13</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Shareholder meeting"}'><strong>Shareholder meeting</strong></td>
<td data-sheets-value='{"1":3,"3":44087}' data-sheets-numberformat='{"1":5,"2":"yyyy. mm. dd","3":1}'><strong>2020. 09. 13</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Stock purchase right exercise"}'><strong>Stock purchase right exercise</strong></td>
<td data-sheets-value='{"1":2,"2":"2020. 09. 13 ~ 10. 04"}'><strong>2020. 09. 13 ~ 10. 04</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Trade suspension (only Green Cross Cell)"}'><strong>Trade suspension (only Green Cross Cell)</strong></td>
<td data-sheets-value='{"1":2,"2":"2020. 10. 28 ~ 11. 11"}'><strong>2020. 10. 28 ~ 11. 11</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Listing"}'>Listing</td>
<td data-sheets-value='{"1":3,"3":44147}' data-sheets-numberformat='{"1":5,"2":"yyyy. mm. dd","3":1}'>2020. 11. 12</td>
</tr>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><div>
<h2>Stock purchase rights</h2>
<p>The stock purchase cost ceiling is set at ₩150.0B combined for both. The exercise prices are currently 6.31% and 5.91% below the current share prices of GS Retail and GS Home Shopping. </p>
<table class="table table-striped">
<colgroup>
<col width="200">
<col width="200">
<col width="200">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"Spread - stock purchase"}'>Spread - stock purchase</td>
<td style="text-align: center;" data-sheets-value='{"1":2,"2":"Green Cross Lab Cell Corp"}' data-sheets-formula="=R[-52]C[0]">Green Cross Lab Cell Corp</td>
<td style="text-align: center;" data-sheets-value='{"1":2,"2":"Green Cross Cell Corp"}' data-sheets-formula="=R[-49]C[-1]">Green Cross Cell Corp</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Current price"}'>Current price</td>
<td style="text-align: center;" data-sheets-value='{"1":3,"3":110200}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}' data-sheets-formula='=googlefinance(Terms!R[-52]C[0], "price")'>₩110,200</td>
<td style="text-align: center;" data-sheets-value='{"1":3,"3":43750}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}' data-sheets-formula='=googlefinance(Terms!R[-49]C[-1], "price")'>₩43,750</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Exercise price"}'><strong>Exercise price</strong></td>
<td style="text-align: center;" data-sheets-value='{"1":3,"3":103244}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}' data-sheets-formula="=R[-43]C[0]"><strong>₩103,244</strong></td>
<td style="text-align: center;" data-sheets-value='{"1":3,"3":41163}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}' data-sheets-formula="=R[-42]C[-1]"><strong>₩41,163</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Premium/discount to the current price"}'><strong>Premium/discount to the current price</strong></td>
<td style="text-align: center;" data-sheets-value='{"1":3,"3":-0.06312159709618875}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(R[-1]C[0]-R[-2]C[0])/R[-2]C[0]"><strong>-6.31%</strong></td>
<td style="text-align: center;" data-sheets-value='{"1":3,"3":-0.05913142857142857}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(R[-1]C[0]-R[-2]C[0])/R[-2]C[0]"><strong>-5.91%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Stock purchase ceiling condition"}'><strong>Stock purchase ceiling condition</strong></td>
<td colspan="2" rowspan="1" style="text-align: center;" data-sheets-value='{"1":3,"3":150}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}' data-sheets-formula="=R[-46]C[0]"><strong>₩150.0B</strong></td>
</tr>
<tr><td colspan="3" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART &amp; KRX"}'>Source: DART &amp; KRX</td></tr>
</tbody>
</table>
<hr>
<h2>Price calculations</h2>
<p>Below is the calculation of swap prices and stock purchase rights exercise prices for reference.</p>
<table class="table table-striped">
<colgroup>
<col width="300">
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"Swap prices"}'>Swap prices</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Green Cross Lab Cell Corp"}' data-sheets-formula="=Terms!R[2]C[0]">Green Cross Lab Cell Corp</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Green Cross Cell Corp"}' data-sheets-formula="=Terms!R[5]C[-1]">Green Cross Cell Corp</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Note"}'>Note</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"1-month VWAP (June 16~July 15, 2021)"}'>1-month VWAP (June 16~July 15, 2021)</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":104418}'>₩104,418</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":41268}'>₩41,268</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"A"}'>A</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"1-week VWAP (July 9~July 15, 2021)"}'>1-week VWAP (July 9~July 15, 2021)</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":104029}'>₩104,029</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":41068}'>₩41,068</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"B"}'>B</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"1-day close (July 15, 2021)"}'>1-day close (July 15, 2021)</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":100200}'>₩100,200</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":41850}'>₩41,850</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"C"}'>C</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Swap price"}'><strong>Swap price</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":102882.33333333333}' data-sheets-formula="=sum(R[-3]C[0]:R[-1]C[0])/3"><strong>₩102,882</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":41395.333333333336}' data-sheets-formula="=sum(R[-3]C[0]:R[-1]C[0])/3"><strong>₩41,395</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"(A+B+C)/3"}'><strong>(A+B+C)/3</strong></td>
</tr>
<tr><td colspan="4" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART &amp; KRX"}'>Source: DART &amp; KRX</td></tr>
</tbody>
</table>
</div><table class="table table-striped">
<colgroup>
<col width="300">
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"Stock purchase rights"}'>Stock purchase rights</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Green Cross Lab Cell Corp"}' data-sheets-formula="=Terms!R[-5]C[0]">Green Cross Lab Cell Corp</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Green Cross Cell Corp"}' data-sheets-formula="=Terms!R[-2]C[-1]">Green Cross Cell Corp</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Note"}'>Note</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"2-month VWAP (May 17~July 15, 2021)"}'>2-month VWAP (May 17~July 15, 2021)</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":101285}'>₩101,285</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":41154}'>₩41,154</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"A"}'>A</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"1-month VWAP (June 16~July 15, 2021)"}'>1-month VWAP (June 16~July 15, 2021)</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":104418}'>₩104,418</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":41268}'>₩41,268</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"B"}'>B</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"1-week VWAP (July 9~July 15, 2021)"}'>1-week VWAP (July 9~July 15, 2021)</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":104029}'>₩104,029</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":41068}'>₩41,068</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"C"}'>C</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Swap price"}'><strong>Swap price</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":103244}' data-sheets-formula="=sum(R[-3]C[0]:R[-1]C[0])/3"><strong>₩103,244</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":41163.333333333336}' data-sheets-formula="=sum(R[-3]C[0]:R[-1]C[0])/3"><strong>₩41,163</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"(A+B+C)/3"}'><strong>(A+B+C)/3</strong></td>
</tr>
<tr><td colspan="4" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART &amp; KRX"}'>Source: DART &amp; KRX</td></tr>
</tbody>
</table>

Swap overviewThis merger swap is very similar to the recent case of GS Retail &amp; GS Home Shopping. Green Cross Lab Cell will merge with Green Cross Cell through a stock swap. The Green Cross Cell shareholders will get 0.4023542 Green Cross Lab Cell shares for each Green Cross Cell share.





Swap overview

Type
Stock swap


Acquirer
Green Cross Lab Cell Corp (144510)


Target company
Green Cross Cell Corp (031390)


Swap price for Green Cross Lab Cell
₩102,882


Swap price for Green Cross Cell
₩41,395


Swap ratio
0.4023542

Source: DART

ScheduleThe record date for securing voting rights at the general shareholders' meeting is August 2nd. The last day to secure the purchase right was yesterday. If you have purchased stocks by yesterday, you can exercise your stock purchase right by notifying your dissenting opinion between August 27 and September 13.The exercise period of the stock appraisal right is from September 13th to October 4th. Trading of Green Cross Cell will be suspended from October 28th to November 11th, and new shares of Green Cross Lab Cell will be listed on November 12th.





Schedule

Last day to own stock purchase rights
2020. 07. 19


Record date of the shareholder register
2020. 08. 02


Dissenting opinion notice
2020. 08. 27 ~ 09. 13


Shareholder meeting
2020. 09. 13


Stock purchase right exercise
2020. 09. 13 ~ 10. 04


Trade suspension (only Green Cross Cell)
2020. 10. 28 ~ 11. 11


Listing
2020. 11. 12

Source: DART


Stock purchase rights
The stock purchase cost ceiling is set at ₩150.0B combined for both. The exercise prices are currently 6.31% and 5.91% below the current share prices of GS Retail and GS Home Shopping. 








Spread - stock purchase
Green Cross Lab Cell Corp
Green Cross Cell Corp


Current price
₩110,200
₩43,750


Exercise price
₩103,244
₩41,163


Premium/discount to the current price
-6.31%
-5.91%


Stock purchase ceiling condition
₩150.0B

Source: DART &amp; KRX



Price calculations
Below is the calculation of swap prices and stock purchase rights exercise prices for reference.









Swap prices
Green Cross Lab Cell Corp
Green Cross Cell Corp
Note


1-month VWAP (June 16~July 15, 2021)
₩104,418
₩41,268
A


1-week VWAP (July 9~July 15, 2021)
₩104,029
₩41,068
B


1-day close (July 15, 2021)
₩100,200
₩41,850
C


Swap price
₩102,882
₩41,395
(A+B+C)/3

Source: DART &amp; KRX











Stock purchase rights
Green Cross Lab Cell Corp
Green Cross Cell Corp
Note


2-month VWAP (May 17~July 15, 2021)
₩101,285
₩41,154
A


1-month VWAP (June 16~July 15, 2021)
₩104,418
₩41,268
B


1-week VWAP (July 9~July 15, 2021)
₩104,029
₩41,068
C


Swap price
₩103,244
₩41,163
(A+B+C)/3

Source: DART &amp; KRX



Green Cross Merger Swap Summary & Arb Spread Status

Equity Capital Markets

<p>SillaJen IPO price was set at ₩15,000, the lowest end of the indicative price band, after conducting the demand survey from (Nov 23-24) the institutional investors. The subscription competition rate is 74.98 to 1. A total of 517 institutional investors have participated in this demand survey. Even though the price was set at the lowest end, it is still widely believed that this result is <em>somewhat "better than expected"</em> given the nature of SillaJen's risky future. But still, many investors are concerned not only about the nature of SillaJen's risky business but also about a stock overhang issue (to be possibly caused by the company's BW and CB investors).</p>

SillaJen IPO price was set at ₩15,000, the lowest end of the indicative price band, after conducting the demand survey from (Nov 23-24) the institutional investors. The subscription competition rate is 74.98 to 1. A total of 517 institutional investors have participated in this demand survey. Even though the price was set at the lowest end, it is still widely believed that this result is somewhat "better than expected" given the nature of SillaJen's risky future. But still, many investors are concerned not only about the nature of SillaJen's risky business but also about a stock overhang issue (to be possibly caused by the company's BW and CB investors).

SillaJen IPO Part 4 - IPO Price & Post-IPO Risks

Thematic (Sector/Industry)

<p>SillaJen Biotherapeutics (established in 2006) is indeed a rare breed in Korean pharmaceutical world. It is not a generic drug maker. It is not a biosimilar maker either. It makes new biomedical products. A majority of Korea's pharmaceutical makers are still generic drug makers. The likes of Celltrion and Samsung Bioepis have emerged as a biosimilar maker. But they are still a few. Biomedical makers are even rarer. Hanmi Pharmaceutical is one of these rare breeds. Now, another biomedical maker…</p>

SillaJen Biotherapeutics (established in 2006) is indeed a rare breed in Korean pharmaceutical world. It is not a generic drug maker. It is not a biosimilar maker either. It makes new biomedical products. A majority of Korea's pharmaceutical makers are still generic drug makers. The likes of Celltrion and Samsung Bioepis have emerged as a biosimilar maker. But they are still a few. Biomedical makers are even rarer. Hanmi Pharmaceutical is one of these rare breeds. Now, another biomedical maker…

SillaJen's December IPO: Valuation, Growth Expectation and IPO Timing

South Korea

Green Cross Medical Science Corp is a pharmaceutical company that develops and produces diagnostic drugs, blood bags, and blood dialysate.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Green Cross Medical Science (142280 KS)

Green Cross Merger Swap Summary & Arb Spread Status

This merger swap is very similar to the recent case of the GS merger swap. So, we are likely to face a rather juicy swap spread opening probably 2...

Sanghyun Park

SillaJen IPO Part 4 - IPO Price & Post-IPO Risks

SillaJen IPO price was set at ₩15,000, the lowest end of the indicative price band, after conducting the demand survey from (Nov 23-24) the...

Sanghyun Park

SillaJen's December IPO: Valuation, Growth Expectation and IPO Timing

SillaJen Biotherapeutics (established in 2006) is indeed a rare breed in Korean pharmaceutical world. It is not a generic drug maker. It is not a...

Sanghyun Park

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)