Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>On Friday morning, <a href="https://www.smartkarma.com/entities/sk-discovery-co-ltd" target="_blank" data-smartkarma-citation="entities:5181:1" rel="noopener">Sk Discovery (006120 KS)</a>, current owner/controller of 36.56% of <a href="https://www.smartkarma.com/entities/sk-chemicals-co-ltd-new" target="_blank" data-smartkarma-citation="entities:26190:1" rel="noopener">Sk Chemicals Co Ltd/New (285130 KS)</a> announced an opportunistic Partial Offer to buy 5.22% more at KRW 108,800/share.</li>
<li>The stated purpose in the <a href="https://kind.krx.co.kr/common/disclsviewer.do?method=search&amp;acptno=20220902000019&amp;docno=&amp;viewerhost=&amp;viewerport=" target="_blank" rel="noopener">Tender Offer Announcement</a> is "Stability of Management Rights." This will get SK Discovery to 41.77%, permitting consolidation of SK Chemicals.</li>
<li>
The real reason?SK Chemicals shares are trading at less than one-third the value of the <a href="https://www.smartkarma.com/entities/sk-bioscience-co-ltd" target="_blank" data-smartkarma-citation="entities:31484:1" rel="noopener">SK Bioscience (302440 KS)</a> shares they hold (with net cash and others free).</li>
</ul>


On Friday morning, Sk Discovery (006120 KS), current owner/controller of 36.56% of Sk Chemicals Co Ltd/New (285130 KS) announced an opportunistic Partial Offer to buy 5.22% more at KRW 108,800/share.
The stated purpose in the Tender Offer Announcement is "Stability of Management Rights." This will get SK Discovery to 41.77%, permitting consolidation of SK Chemicals.

The real reason?SK Chemicals shares are trading at less than one-third the value of the SK Bioscience (302440 KS) shares they hold (with net cash and others free).


SK Discovery Launches Opportunistic Partial Tender on SK Chemicals To Buy SK Bio CHEAP

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.

<ul>
<li>This is a cash offer. So, there is no stock swap arbitrage here. To participate in this tender, we must buy SK Chemicals shares by the 19th.</li>
<li>We have proration risk. Discovery will buy on a pro-rata basis if exceeding the target volume. So, we could be at a loss.</li>
<li>This is an over-the-counter transaction. So both STT and CGT apply. The STT rate is 0.43% of the tendered amount and we have a 22% CGT rate for the profit.</li>
</ul>


This is a cash offer. So, there is no stock swap arbitrage here. To participate in this tender, we must buy SK Chemicals shares by the 19th.
We have proration risk. Discovery will buy on a pro-rata basis if exceeding the target volume. So, we could be at a loss.
This is an over-the-counter transaction. So both STT and CGT apply. The STT rate is 0.43% of the tendered amount and we have a 22% CGT rate for the profit.


SK Chemicals Cash Offer: Complete Details

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<ul>
<li>After the market close on 21 April, it was reported that SK Chemical's CEO Jeon Kwang-Hyun sold all his shares (21,852 shares) of SK Bioscience from April 19th to 21st.</li>
<li>The fact that the CEO of SK Chemical, the controlling shareholder of SK Bioscience, sold all his stake in the latter company does not bode well for SK Bioscience. </li>
<li>The CEO of SK Chemical selling all his shares in SK Bioscience and increasing reluctance in getting more COVID booster shots suggest further downside risk for SK Bioscience. </li>
</ul>


After the market close on 21 April, it was reported that SK Chemical's CEO Jeon Kwang-Hyun sold all his shares (21,852 shares) of SK Bioscience from April 19th to 21st.
The fact that the CEO of SK Chemical, the controlling shareholder of SK Bioscience, sold all his stake in the latter company does not bode well for SK Bioscience. 
The CEO of SK Chemical selling all his shares in SK Bioscience and increasing reluctance in getting more COVID booster shots suggest further downside risk for SK Bioscience. 


SK Chemical's CEO Sells All His Shares of SK Bioscience

<ul>
<li>I screened those local buybacks in Korea with a market cap of +₩300B. I further selected those whose buyback volume exceeds 0.5% of SO and buyback completion is below 50%.</li>
<li>I then narrowed them down to those whose buybacks will likely be completed within 30 trading days with a daily buyback x ADTV of 0.15x or higher.</li>
<li>As a result, I obtained nine names: Hwasung Industrial, SK Chemicals, Meritz Securities, Huons Global, Daishin Securities, E-Mart, Meritz Financial Group, Meritz Fire, &amp; Hwaseung Industries
</li>
</ul>


I screened those local buybacks in Korea with a market cap of +₩300B. I further selected those whose buyback volume exceeds 0.5% of SO and buyback completion is below 50%.
I then narrowed them down to those whose buybacks will likely be completed within 30 trading days with a daily buyback x ADTV of 0.15x or higher.
As a result, I obtained nine names: Hwasung Industrial, SK Chemicals, Meritz Securities, Huons Global, Daishin Securities, E-Mart, Meritz Financial Group, Meritz Fire, &amp; Hwaseung Industries



KOSPI/KOSDAQ Buybacks in Progress: Those with High Daily Flow Screened

<ul>
<li>In this insight, we discuss the 'Save KOSPI' campaign which is a set of eight proposals made by the senior leaders at Korea Corporate Governance Forum and Uprise Co. (Heybit). </li>
<li>We think that the Save KOSPI campaign is an interesting movement that is worth paying attention since it appears to be gaining increasing traction among retail investors in Korea.</li>
<li>As more of these eight proposals are made into law in the next several years, we believe that the 'Korea Discount' could also decline as well.</li>
</ul>


In this insight, we discuss the 'Save KOSPI' campaign which is a set of eight proposals made by the senior leaders at Korea Corporate Governance Forum and Uprise Co. (Heybit). 
We think that the Save KOSPI campaign is an interesting movement that is worth paying attention since it appears to be gaining increasing traction among retail investors in Korea.
As more of these eight proposals are made into law in the next several years, we believe that the 'Korea Discount' could also decline as well.


South Korea

SK Chemicals Co.,Ltd manufactures environmentally friendly materials. The Company produces and sells composites, high-performance materials, energy saving materials, and other products. SK Chemicals also offers total healthcare solutions services. SK Chemicals serves customers worldwide.

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SK Chemicals (285130 KS)

SK Discovery Launches Opportunistic Partial Tender on SK Chemicals To Buy SK Bio CHEAP

SK Discovery has launched an opportunistic Offer to buy 5.2% of SK Chem to go >40+%. A small premium to recent but only a 12-week high... ish......

Travis Lundy

SK Chemicals Cash Offer: Complete Details

This post provides complete details about SK Discovery's cash offer to the shareholders of SK Chemicals and discusses trading angles on this event.

Sanghyun Park

SK Chemical's CEO Sells All His Shares of SK Bioscience

The fact that the CEO of SK Chemical, the controlling shareholder of SK Bioscience, sold all his stake in the latter company does not bode well for...

Douglas Kim

KOSPI/KOSDAQ Buybacks in Progress: Those with High Daily Flow Screened

This post details share buybacks in progress among the KOSPI/KOSDAQ stocks and screens those with a high daily flow (+0.15x ADTV).

Sanghyun Park

What Is the 'Save KOSPI' Campaign?

In this insight, we discuss the 'Save KOSPI' campaign which is a set of eight proposals aimed at improving the corporate governance of Korean...

Douglas Kim

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