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. 


<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

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

NTT (Nippon Telegraph & Telephone) / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/monex-group-inc" target="_blank" data-smartkarma-citation="entities:14211:1" rel="noopener">Monex (8698 JP)</a> and Docomo announced an agreement. It is not clear ANY of this has to happen at prices favourable to minorities. But equally, it won't be egregiously bad.</li>
<li>
<a href="https://www.smartkarma.com/entities/people-s-insurance-co-group-of-china-ltd-h" target="_blank" data-smartkarma-citation="entities:362:1" rel="noopener">People's Insurance (PICC) (1339 HK)</a>'s implied stub is at a lifetime low. The market is assigning HK$35.6bn less for its steady and profitable life/health insurance stub ops, year-to-date.</li>
<li>
<a href="https://www.smartkarma.com/entities/jmdc-inc" target="_blank" data-smartkarma-citation="entities:28673:1" rel="noopener">JMDC (4483 JP)</a> is a growth stock, growing organically. It is a rare enough thing. If you want to buy the back end, wait until it gets here.</li>
</ul>



Monex (8698 JP) and Docomo announced an agreement. It is not clear ANY of this has to happen at prices favourable to minorities. But equally, it won't be egregiously bad.

People's Insurance (PICC) (1339 HK)'s implied stub is at a lifetime low. The market is assigning HK$35.6bn less for its steady and profitable life/health insurance stub ops, year-to-date.

JMDC (4483 JP) is a growth stock, growing organically. It is a rare enough thing. If you want to buy the back end, wait until it gets here.


Last Week in Event SPACE: Monex/NTT, PICC/PICC P&C, Vertex

United States

Globus Medical, Inc. is a medical device company. The Company is focused exclusively on the design, development and commercialization of products that promote healing in patients with spine disorders.  Globus Medical's products fall into innovative fusion or disruptive technologies.

Teleflex Incorporated is a global provider of medical technology products. The Company primarily develops, manufactures and supplies single-use medical devices used by hospitals and healthcare providers for common diagnostic and therapeutic procedures in critical care and surgical applications.

Hologic, Inc. is a developer, manufacturer and supplier of premium diagnostic products, medical imaging systems, and surgical products. The Company's core business units focus on diagnostics, breast health, GYN surgical, and skeletal health.

Baxter International Inc. develops, manufactures, and markets products and technologies related to hemophilia, immune disorders, infectious diseases, kidney disease, trauma and other chronic and acute medical conditions. The Company's products are used by hospitals, kidney dialysis centers, nursing homes, rehabilitation centers, doctors' offices, and research laboratories.

Shockwave Medical, Inc. manufactures medical devices. The Company offers intravascular devices and balloon dilatation catheters for patients with calcified cardiovascular disease. Shockwave Medical serves customers worldwide.

STERIS Public Limited Company operates as a provider of infection prevention and other procedural products and services. The Company offers sterilizers and washers, surgical tables, lights and equipment management systems, and endoscopy accessories. STERIS serves healthcare, pharmaceutical, and medical device industries.

Merit Medical Systems, Inc. manufactures and markets products used in diagnostic and interventional cardiology and radiology procedures.  The Company's primary products include inflation devices, guide wires, thrombolytic catheters and fluid dispensing systems, and angiography accessories, among others.  Merit's products are sold worldwide.

Glaukos Corporation operates as an ophthalmic medical technology company. The Company develops, manufactures, and markets medical devices for the treatment of glaucoma. Glaukos offers micro-scale injectable therapies designed to address the complete range of glaucoma disease states and progression.

Masimo Corporation designs, develops and licenses medical signal processing and sensor technology for the noninvasive monitoring of physiological parameters. The Company's first products are designed to improve the effectiveness of pulse oximetry by overcoming the inability of current monitors to precisely measure the levels of arterial blood oxygen saturation and low arterial blood flow.

Lantheus Holdings, Inc. develops, manufactures, sells, and distributes diagnostic medical imaging agents and products. The Company offers imaging agents and products that assist clinicians in the diagnosis of cardiovascular and other diseases. Lantheus Holdings serves customers worldwide.

Fisher & Paykel Healthcare Corporation Limited designs, manufactures and markets heated humidification products and systems for use in respiratory care and the treatment of sleep apnea.  The Company also offers patient warming and neonatal care products, including warming products and infant resuscitators.

SYSMEX CORPORATION manufactures reagents and equipment for clinical tests including hematologic (blood) and immune tests. The Company also develops, manufactures, and trades particle analyzers such as blood coagulation analyzer and related software. Manufacturing and sales outside Japan include the United States, EMEA, China and Asia Pacific regions.

BioMerieux designs, develops, manufactures, and markets systems in the field of in vitro diagnostics for medical and industrial applications. The Company is specialized in the diagnosis of infectious diseases and pathologies. BioMerieux is also active in the analysis of food, pharmaceuticals and environmental samples to determine their microbiological quality.

Sartorius Stedim Biotech develops and manufactures laboratory technologies and equipment for the pharma and food industries, as well as for public research institutes and laboratories.

Sartorius AG manufactures and markets precision electronic equipment and components.  The Company produces precision scales for laboratory and industrial uses and electrochemistry.  Sartorius manufactures equipment for biomolecular and microbial separations, cell culture, concentration, fermentation, and purification.  The Company markets its products worldwide.

Smith & Nephew plc develops and markets advanced medical devices. The Group is involved in orthopaedics, endoscopy, and advanced wound management.

OLYMPUS CORPORATION manufactures optoelectronic products.  The Company's products include cameras, video sets, endoscopes for medicine and industrial use, microscopes, analytical equipment, office communication systems, laseroptical scanners, and ionic printers.

Jiangsu Yuyue Medical Equipment & Supply Co Ltd develops, manufactures and distributes  medical equipments.

Jiangsu Yuyue Medical Equipment & Supply A (002223 CH)

Jiangsu Yuyue Medical Equipment & Supply A

DiaSorin S.p.A. manufactures reagents for in vitro diagnostics.

Insulet Corporation is a medical device company that develops, manufactures and markets an insulin infusion system for people with insulin-dependent diabetes.

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Insulet Corp (PODD US)

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

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

Last Week in Event SPACE: Monex/NTT, PICC/PICC P&C, Vertex

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

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