Event-Driven

Seven & I Holdings (3382 JP) has published two documents to respond to misinformation and detail its “constructive engagement” with Alimentation Couche-Tard (ATD CN).
The statements underscore the Board’s serious doubts about securing US antitrust approval. The significant discrepancies in the engagement timeline point to two parties at loggerheads.
While the Board claims it is pursuing a dual-track process to create value, the reality is that the process is designed to hinder Couche-Tard’s offer to facilitate the restructuring plan.

7&I (3382) – Clarifications of Clarifications But Progress Is Apparent

On 10 March, Seven & I Holdings (3382 JP) released a statement about its interactions with Alimentation Couche-Tard (ATD CN). The next day, ATD released its own. They didn’t match.
The 7&i spokesperson admitted one technical point, but investors seemed to believe ATD over 7&i. On 13 March, ATD held a presentation in Tokyo. Materials? Unchanged. Earnings comments? Unchanged.
This morning, 7&i released a document which “corrects the record regarding critical false and misleading claims about 7&i’s engagement with Alimentation Couche-Tard (ACT).” OUCH. The stock fell.

Fuji Soft (9749 JP) – KKR Does Deal With the Family To Squeeze Out Minorities – You Can Join Too

KKR’s Second Tender Offer for Fuji Soft Inc (9749 JP) ended 19 February 2025 and KKR got a whopping 57.9% after Bain bowed out. It was close.
The Nozawa founder said it would not tender. Others family members may have, but now KKR has signed a deal with Nozawa family company YK NFC, to support the squeezeout.
Assuming, Nozawa Hiroshi’s stake and the NFC stake remain unchanged, that cements the result of the 25 April AGM. But there may be games to play.

Event Driven- SKF India Demerger: The Automotive & Industrial Split

SKF India Ltd (SKF IN) has announced the demerger of its industrial business, which will be listed separately for enhanced focus and operational efficiency in both segments.
The company’s automotive business has high volume but low margins, whereas the industrial segment offers higher margins, highlighting a significant contrast in profitability between the two business segments.
The automotive business would attract investors seeking long-term, steady growth, while the industrial segment would appeal to investors focused on higher margins and more lucrative returns.

How to Clean Up Korea’s Borrowing Balance Stats

By Sanghyun Park

Local traders size up borrowing balances by comparing them to free-float shares, using KRX data for consistency. While not always exact, it’s the go-to reference for most traders.
They usually watch for borrowing balances crossing 3% of float, triggering price action. With short selling back, many are now bumping that threshold to 4%.
Borrowing balance structures differ between large and small/mid-caps. Traders use a 1 trillion KRW market cap threshold to split them, aligning with TMI indices for long/short setups.

This Needs To Be Sorted: Great Eastern (GE SP)’s Protracted Suspension

Back on the 10th May 2024, OCBC (OCBC SP) launched a voluntary unconditional general Offer for the 11.56% in life/non-life insurer Great Eastern Holdings (GE SP) not held.
The Offer closed on the 12th July with OCBC holding 93.62%. Shares were subsequently. suspended. And have been suspended ever since. Compulsory acquisition was not afforded.
The SGX has thrice granted OCBC an extension of time to restore the float. UK-based activist Palliser is agitating for better terms. Time for a bump.

NZME’s Strategic Review and Activist Involvement Signal Potential Value Unlock Through OneRoof Spin-Off and Board Overhaul

NZME Limited’s strategic review of OneRoof aims for potential separation, with activist Jim Grenon acquiring a 13.5% stake.
Grenon and Osmium Partners are pushing for board changes and OneRoof’s monetization, suggesting a possible spin-off.
The sum-of-the-parts valuation estimates NZME’s stock at A$1.49/share, implying a 35% upside from current levels.

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Mar 25

Daily Brief Event-Driven: Xiaomi (1810 HK)’s US$5bn Placement: Unfavourable Index Dynamics but Strong Momentum and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Xiaomi (1810 HK)’s US$5bn Placement: Unfavourable Index Dynamics but Strong Momentum
Tokyu Corp (9005) To Lift Stake in Tokyu REIT (8957) Again – Bigger Than You Think It Is
Gold Road (GOR AU): Rejects an NBIO from Gold Fields (GFI US)
Short Selling Resuming on 31 March in Korea – Stocks With Highest Short Selling Lending Balance
StubWorld: Sun Corp (6736 JP) Is Still Inexpensive To Its Cellebrite Stake
More Gold Fever: Gold Field’s Hostile Tilt For Gold Road
Insiders’ Playbook: Who’s Buying and Selling Amid Market Turbulence?
Telefónica: Execution and Valuation Update

Xiaomi (1810 HK)’s US$5bn Placement: Unfavourable Index Dynamics but Strong Momentum

Xiaomi Corp (1810 HK) is looking to place 750m shares at a price range of HK$52.8-54.6/share, a 4.2-7.4% discount from last. That could raise up to HK$40.95bn (US$5.27bn).
There will be limited passive buying near-term. There will be more passive buying at the end of May. Then there will be passive selling early June.
Shorts will be hurting from the relentless move higher in the stock and there could be short covering if the stock moves lower from these levels.

Tokyu Corp (9005) To Lift Stake in Tokyu REIT (8957) Again – Bigger Than You Think It Is

Today, Tokyu Corp (9005 JP) announced it would increase its stake its family REIT, buying up to 48,880 units or 5.0% of units out over the next six months.
This comes a couple of days after Hankyu Hanshin announced the same for its REIT, discussed here. Others have done so before. Tokyu has. Others will do so going forward.
The main reason? Squeeze the ‘share’ price higher. Get the REIT to 1.0x PNAV then stuff it with sponsor-held properties. That’s not bad. The goal is a higher price.

Gold Road (GOR AU): Rejects an NBIO from Gold Fields (GFI US)

Gold Road Resources (GOR AU) has rejected a non-binding proposal from Gold Fields (GFI US). The offer is A$2.27 plus value per share of Gold Road’s shareholding in De Grey.
The Board has rejected the offer mainly due to opportunistic timing and no value attributed to the potential underground expansion of the Gruyere mine (Gold Road/Gold Fields are JV partners).
The proposal is a logical consolidation to eliminate dis-synergies. The offer is reasonable compared to peer multiples, precedent transactions and historical trading ranges.

Short Selling Resuming on 31 March in Korea – Stocks With Highest Short Selling Lending Balance

Short selling balance in the Korean stock market was 62.4 trillion won as of 21 March 2025, up significantly from 47.2 trillion won three months ago.
Among the stocks in KOSPI with high short selling balance and high lending balance ratios include Posco Future M, Yuhan Corp, LG Energy Solution, and Hanwha Aerospace.
Among the stocks in KOSDAQ with high short selling balance and high lending balance ratios include Ecopro BM, Ecopro Co, HLB, and Eo Technics.

StubWorld: Sun Corp (6736 JP) Is Still Inexpensive To Its Cellebrite Stake

Sun Corp (6736 JP) has declined ~6% in the past month. Its 44.3% stake in Cellebrite DI (CLBT US) is worth ~186% of its market cap.
Preceding my comments on Sun Corp are the current setup/unwind tables for Asia-Pacific Holdcos.
These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

More Gold Fever: Gold Field’s Hostile Tilt For Gold Road

Gold Road Resources (GOR AU) has rejected an unsolicited offer from Gold Fields Ltd (GFI SJ),
In a bid to secure control over the Gruyere JV mine in WA, Gold Roads offered A$2.27/share, “plus … Gold Road’s interest in .. De Grey Mining (DEG AU).“
To spice things up Gold Road countered with a proposal to acquire Gold Fields’ interest in Gruyere, which was also rejected by Gold Fields.

Insiders’ Playbook: Who’s Buying and Selling Amid Market Turbulence?

The start of 2025 has been particularly turbulent for Indian equities as broader market sentiment soured due to elevated valuations, foreign institutional investor (FII) outflows, and global macro uncertainty.
However, amid this volatility, one signal stood out: insider trading activity.
In this report, we deep-dive into insider buying and selling trends from January 1 to March 3, 2025, to uncover where company promoters and top executives are placing their bets

Telefónica: Execution and Valuation Update

By Jesus Rodriguez Aguilar

Telefónica is nearing completion of its Latin American divestment strategy, unlocking capital from low-margin markets and reducing geopolitical risk, with €2.5 billion equity value estimated for remaining Hispam units.
A conservative 4x EV/EBITDA multiple applied to Hispam subsidiaries yields a fair value of €5.06 per share, while a prudent €4.50 target reflects geopolitical and execution risk buffers.
Proceeds from disposals strengthen Telefónica’s balance sheet, support its 7% dividend yield, and enable reinvestment into high-growth segments like Tech and fibercos, enhancing long-term shareholder value and operating efficiency.

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Mar 24

Daily Brief Event-Driven: Sun Corp (6736) – Still Cheap and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Sun Corp (6736) – Still Cheap
A/H Premium Tracker (To 21 Mar 2025): AH Premia Still Falling; Expect Curve Torsion or AH Widening
Weekly Deals Digest (23 Mar) – CK Hutchison, Canvest, ENN Energy, HKBN, Fengxiang, Spartan, DN Sols
Merger Arb Mondays (24 Mar) – HKBN, ESR, Canvest, Vesync, Seven & I, Proto, Makino, Spartan
PC Partners (1263 HK): SGX Primary Listing Justified To Maintain NVIDIA Supply
Market Movers: Key Dates at a Glance (March 24-30)
Weekly Update (ANGI, IAC, SNRE)

Sun Corp (6736) – Still Cheap

Eight months on from the Tender Offer which changed the shape of the shareholder register, Sun Corp (6736 JP) is as cheap to its main asset as it was before.
Sun Corp is cheap to its holding in Cellebrite DI (CLBT US). How cheap depends on the form and structure of its eventual exit.
Understanding what the options are (and the dynamics around hedging/exposure) is worthwhile.

A/H Premium Tracker (To 21 Mar 2025): AH Premia Still Falling; Expect Curve Torsion or AH Widening

AH Premia continue to fall. Spread curve torsion was a barbell this week. Narrow and wide spreads see Hs outperform. Middling spreads outperform less.
To me, warning signs are flashing on spreads. They are at their narrowest in 5yrs and they are volatile, though volatility is coming down.
Lots of spreads see the HA premium less than 15%. That is historically tight.

Weekly Deals Digest (23 Mar) – CK Hutchison, Canvest, ENN Energy, HKBN, Fengxiang, Spartan, DN Sols

A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
ECM developments: DN Solutions (298440 KS) seeks to raise US$1.1 billion in a KRX IPO.
Event-Driven developments: CK Hutchison Holdings (1 HK), Canvest Environmental Protection Group (1381 HK), ENN Energy (2688 HK), HKBN Ltd (1310 HK), Shandong Fengxiang (9977 HK), Spartan Resources (SPR AU).

Merger Arb Mondays (24 Mar) – HKBN, ESR, Canvest, Vesync, Seven & I, Proto, Makino, Spartan

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: Seven & I Holdings (3382 JP), OneConnect Financial Technology (OCFT US), Insignia Financial (IFL AU), Smart Share Global (EM US), Soundwill Holdings (878 HK).
Lowest spreads: Makino Milling Machine Co (6135 JP), Shibaura Electronics (6957 JP), Domain Holdings Australia (DHG AU), Tonami Holdings (9070 JP), PointsBet Holdings (PBH AU).

PC Partners (1263 HK): SGX Primary Listing Justified To Maintain NVIDIA Supply

On the 18th June 2024, PC Partner (1263 HK)‘s board said it was considering an SGX listing, by way of introduction, and applying for the withdrawal of the HKEx listing.
A 30th August 2024 announcement provided clarity on a step-by-step approach for the HKEx withdrawal. A secondary listing on the SGX was established on the 15th November.
The next step is to establish a dual-primary listing in Singapore. Then withdraw the HKEx listing. The key driver behind this exercise is ensure the uninterrupted supply of NVIDIAs GPUs.

Market Movers: Key Dates at a Glance (March 24-30)

By Gaudenz Schneider

India: Index changes for Nifty indices will take place. Multiple option expiries are scheduled, impacting stocks and indices such as the NIFTY 50 Index, and the SENSEX Index.
Asia-Pacific: Key events include Hong Kong’s earnings week and Tokyo CPI release, while Australia reports its Monthly CPI indicator.
USA: Significant releases include the final Q4 2024 GDP figures and the PCE Price Index, the Fed’s preferred inflation gauge.

Weekly Update (ANGI, IAC, SNRE)

By Richard Howe

On March 31, 2025, IAC Inc (IAC) will spin off Angi Inc (ANGI). The first day of trading will be April 1st.
Transaction Structure: The spin-off is designed to be tax-free, providing IAC shareholders with direct ownership of Angi. This move will eliminate Angi’s dual-class share structure, transitioning to a one share/one vote system.
Distribution Ratio: IAC shareholders will receive approximately 0.5178 shares of Angi Class A common stock for each IAC share they hold. This ratio accounts for a planned 1-for-10 reverse stock split of Angi’s shares, effective March 24, 2025.

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Mar 23

Daily Brief Event-Driven: LY Corp (4689) Launches Beenos (3328) Tender Offer at ¥4 and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

LY Corp (4689) Launches Beenos (3328) Tender Offer at ¥4,000
HK Connect SOUTHBOUND Flows (To 21 Mar 2025); Lots Of “Day Trading” And Behind the Scenes Div-Buying
Kum Yang: A Potential Delisting? [Murphy’s Law in Progress]
(Mostly) Asia-Pac M&A: Westgold/Spartan, Dropsuite, Shandong Fengxiang, Proto Corp, Shinko Electric
Last Week in Event SPACE: Hankyu Hanshin REIT, ENN Energy, Idemitsu, HKBN, Jardine Matheson

LY Corp (4689) Launches Beenos (3328) Tender Offer at ¥4,000

On Friday 21 March, LY (4689 JP) made an announcement it had received all the required approvals and would launch the Tender Offer on 24 March.
Some were upset about the price originally but unlike other deals, this one traded below terms for three months since original announcement. Three activish funds had pitched in their 30%.
This is now trading tight, and will continue to trade tight. If you own, whether you hold through early May depends on whether you are bullish or bearish the market.

HK Connect SOUTHBOUND Flows (To 21 Mar 2025); Lots Of “Day Trading” And Behind the Scenes Div-Buying

Gross SOUTHBOUND volumes dropped again somewhat but still high at HK$619bn. NET buying by SOUTHBOUND was HK$23bn which is much smaller than the last several weeks.
The flows here are still striking and net to buy. There has to be institutional buying. And I assume it is to get the earnings yield and div pickup.
Included is a summary of important China Stocks-relevant news as I saw it this week.

Kum Yang: A Potential Delisting? [Murphy’s Law in Progress]

Murphy’s law is at progress for Kum Yang (001570 KS).
On 21 March, Kum Yang’s external auditor gave a disclaimer of opinion on the on its audit report.
Korea Exchange is becoming more serious about delisting shady companies, especially one that receives inappropriate audit opinions for two consecutive years.

(Mostly) Asia-Pac M&A: Westgold/Spartan, Dropsuite, Shandong Fengxiang, Proto Corp, Shinko Electric

I tally 52 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma.
Three news new deals discussed this week: the Westgold Resources (WGX AU)/Spartan Resources (SPR AU) merger, and EcoNaviSta (5585 JP)‘s Tender Offer.
Key updates/news took place on: Dropsuite Ltd (DSE AU),Shandong Fengxiang (9977 HK), Proto Corp (4298 JP), and Shinko Electric Industries (6967 JP).

Last Week in Event SPACE: Hankyu Hanshin REIT, ENN Energy, Idemitsu, HKBN, Jardine Matheson

Buy Hankyu Hanshin REIT, Inc. (8977 JP) on any weakness. There will be strength ahead.
With ENN Energy (2688 HK) suspended pursuant to the Takeovers Code, a third party Offer, as opposed to ENN Group, seems more likely.
Be long Idemitsu (5019 JP) vs ENEOS for the next several weeks. Light and easy drift trade based on pressure increasing and pressure ending before new news in May.

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Mar 22

Daily Brief Event-Driven: Hankyu Hanshin REIT (8977) – Good Fundamental News and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Hankyu Hanshin REIT (8977) – Good Fundamental News, a Bigly Buyback, and Cascading Flows to Come
Korea’s FSC Just Dropped the Final Playbook on the Full Restart of Short Selling.
Manappuram Finance: Bain Capital’s Entry Signals a New Chapter, But Challenges Remain
CIE’s Partial Takeover Offer Puts Shareholders in the Fast Lane

Hankyu Hanshin REIT (8977) – Good Fundamental News, a Bigly Buyback, and Cascading Flows to Come

3D Investment Partners launched a Partial Tender Offer to buy a 10+% stake in Hankyu Hanshin REIT, Inc. (8977 JP). The REIT finally responded with a “Neutral” stance.
But they also upgraded earnings forecasts, bought a building, and announced the Sponsor would buy units in the market over the next year. It’s big.
And that creates flows, which then engender other reactive flows, and cascading flows, and because the sector isn’t rich, there may be a tailwind.

Korea’s FSC Just Dropped the Final Playbook on the Full Restart of Short Selling.

By Sanghyun Park

Today’s update clarifies which brokers are fully linked to NSDS, giving them an edge in short-selling speed and flexibility, while others face more execution constraints.
This leads to a clear execution risk gap, requiring traders to factor in trade efficiency differences based on their broker.
With lower short-selling restriction triggers, liquidity and short-covering dynamics will shift, requiring traders to reassess market impact and adjust strategies accordingly.

Manappuram Finance: Bain Capital’s Entry Signals a New Chapter, But Challenges Remain

Bain Capital is acquiring a 41.7–46% stake in Manappuram Finance (MGFL IN), marking a shift from a promoter-led to a professionally managed NBFC.
This deal injects INR 4,385 crore in fresh capital, strengthens governance, and positions Manappuram for growth beyond gold loans into microfinance, vehicle loans, and housing finance.
While execution risks remain, Bain’s track record in financial services suggests a long-term transformation, potentially closing Manappuram’s valuation gap with Muthoot Finance.

CIE’s Partial Takeover Offer Puts Shareholders in the Fast Lane

By Jesus Rodriguez Aguilar

CIE Automotive launches a 10%partial takeover offer at €24.00, offering a 7% premium to recent trading levels, taking advantage of recent share price weakness.
Valuation suggests shares are undervalued; DCF and peer comps support a fair value of €31–33.
Offer aims to boost liquidity, with potential future placements to improve free float and attract institutional investors.

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Mar 21

Daily Brief Event-Driven: Boss Maki Goes Hard on Base (4477) – Interesting Situation and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Boss Maki Goes Hard on Base (4477) – Interesting Situation
Idemitsu (5019) – Buyback Announced, Executed, To Be Executed Again; Pressure & Timing
Quiddity Leaderboard ChiNext & ChiNext 50 Jun25: US$1.4bn Total One-Way Flows; Basket Trade Idea
Dropsuite (DSE AU): Topline Selling Is A Buying Opportunity
ENN Energy (2688 HK): Third Party Offer?
Dalton Investments Going Activist on Kolmar Holdings and NAV Valuation
Rio Tinto Dual-Listed Company (DLC) Unification Analysis
Central Banks Hold Steady Amid Global Economic Uncertainty
Lifeway Foods Faces Potential Sale to Danone Amidst Board Overhaul and Family Feud Resolution by June 2025

Boss Maki Goes Hard on Base (4477) – Interesting Situation

Melco Holdings (6676 JP) chairman Hiroyuki MAKI bought up a 14% stake in BASE Inc (4477 JP) in just under two weeks. It was done quite transparently. He announced daily.
He wants to get to 30% in a Tender Offer. The method, approach, lack of transparency, and similarity to previous situations where he invested has the company wary.
This looks like a Poison Pill case in the offing. It WAS a cheap stock. It is not expensive now. But it is not clear what the endgame is here.

Idemitsu (5019) – Buyback Announced, Executed, To Be Executed Again; Pressure & Timing

In February, Idemitsu Kosan (5019 JP) announced a new buyback to start when the then-existing one had not yet been completed. This is a pattern the last few years.
On Tuesday, Idemitsu announced the method. Shareholder structure means there is pressure here, and its major peer sees buyback pressure drop imminently.
Be aware of tilts and timing, and what might come in May.

Quiddity Leaderboard ChiNext & ChiNext 50 Jun25: US$1.4bn Total One-Way Flows; Basket Trade Idea

By Janaghan Jeyakumar, CFA

The ChiNext index represents the performance of the 100 largest and most liquid A-share stocks listed on the ChiNext Market of the Shenzhen Stock Exchange.
The ChiNext 50 index is a subset of the ChiNext index and it consists of the top 50 names in the ChiNext index with the highest daily average turnover.
We see 9 changes for the ChiNext index and 5 changes for the ChiNext 50 index in the next index rebal event in June 2025.

Dropsuite (DSE AU): Topline Selling Is A Buying Opportunity

Back on the 28th January, Dropsuite Ltd (DSE AU), a backup, recovery and protection software company, entered into a Scheme Implementation Deed with Texas-based IT automation outfit NinjaOne.
NinjaOne’s A$5.90/share Offer was a 34.1% premium to last close. The Offer has the backing of Dropsuite’s largest shareholder, Topline Capital (31%). Board & management hold a further 9%.
Done & dusted no? Then Topline sold down to 19.7% on the 28th Jan, then 10.5% on the 28th Feb. The Takeover Panel now orders Topline to stop selling.

ENN Energy (2688 HK): Third Party Offer?

ENN Energy (2688 HK), a major clean energy distributor based in China, is currently suspended pursuant to the Takeovers Code
The largest shareholder is ENN Group (34.28% of shares out), an entity controlled by founder Wang Yusuo and his wife, Zhao Baoju.
ENN Energy is a US$8.5bn market cap company. It’s possible ENN Group make an Offer. But more likely, I’d expect an Offer from a (larger) third party.

Dalton Investments Going Activist on Kolmar Holdings and NAV Valuation

In this insight, we discuss Dalton Investments which recently started to go activist on Kolmar Korea Holdings (024720 KS) and NAV valuation of this company.
Our base case valuation of Kolmar Holdings is NAV of 475 billion won or NAV per share of 13,836 won, representing a 46% upside from current levels.
Dalton Investments is likely to pressure Kolmar Holdings to increase share buyback and cancellations.

Rio Tinto Dual-Listed Company (DLC) Unification Analysis

By Jesus Rodriguez Aguilar

Unification could unlock $27-32B in value, driven by cost synergies, franking credit release, and index upweighting, enhancing Rio Tinto’s market positioning and shareholder returns.
$2.88B in franking credits are lost annually due to the DLC structure; unification enables full utilization via higher franked dividends and strategic off-market buybacks.
Increased ASX200 and FTSE100 weighting post-unification could drive $5-7B in passive fund inflows, improving liquidity, stock valuation, and institutional investor appeal.

Central Banks Hold Steady Amid Global Economic Uncertainty

By Gaudenz Schneider

Central banks globally are making rate decisions, with the Fed holding steady while Sweden, Switzerland, Taiwan, and the UK announce their decisions today.
Mexico and Canada are central banks to watch, with Fitch forecasting both economies to enter recession in 2025 due to their high US trade exposure.
The US’s global reciprocal tariffs, set to be revealed on April 2, have significant implications for the global economy, with the potential to influence central bank policies worldwide.

Lifeway Foods Faces Potential Sale to Danone Amidst Board Overhaul and Family Feud Resolution by June 2025

Danone offered to buy Lifeway at $25/share in September 2024, raised to $27/share in November 2024.
Lifeway’s board rejected Danone’s offers, claiming $27/share undervalues the company; CEO Julie Smolyansky increased her compensation.
Edward and Ludmila Smolyansky, with Danone, control 50% of Lifeway, aiming to replace the board and negotiate a sale.

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Mar 20

Daily Brief Event-Driven: The Japan March-End Rebal and Dividend Trade and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

The Japan March-End Rebal and Dividend Trade
ENN Energy (2688 HK): ENN Natural Gas to Launch a Privatisation Offer?
Quiddity Leaderboard CSI 300/500 Jun25: US$6bn+ One-Way Flows; One Intra-Review Addition Soon
POSCO Holdings Is Selling Nippon Steel Shares Worth 468 Billion Won
Makino Milling Machine (6135 JP): Proposes Countermeasures
Quess Corp Demerger: Value Unlocking & Strategic Shift to Drive Growth
Ramelius-Spartan Merger As Gold Ekes Out New Highs

The Japan March-End Rebal and Dividend Trade

Every year it’s the same trade. But sometimes it is not. This year it is Thursday and Friday. Or not.
The month-end and quarter-end bring big flows, or not, depending on how things have gone.
Over the past 10 years or so, the two-day return on the March trade is pretty good. This year? Well read on!

ENN Energy (2688 HK): ENN Natural Gas to Launch a Privatisation Offer?

ENN Energy (2688 HK) is in a trading halt “pending the issuance of an announcement pursuant to the Hong Kong Code on Takeovers and Mergers containing inside information of the Company.”
ENN Natural Gas (600803 CH), also in a trading halt, is likely seeking to privatise ENN through a Cayman scheme. A high AGM minority participation necessitates an attractive offer.
I use several methods to triangulate the likely offer price, which suggests a price range of HK$66.50-85.01, with an average of HK$76.04, a 28% premium to the last close.

Quiddity Leaderboard CSI 300/500 Jun25: US$6bn+ One-Way Flows; One Intra-Review Addition Soon

By Janaghan Jeyakumar, CFA

CSI 300 represents the 300 largest stocks by market cap and liquidity from the Shanghai and Shenzhen Exchanges. CSI 500 is the next 500 names.
In this insight, we take a look at the potential ADDs and DELs leading the race for the semiannual index rebal event in June 2025.
Currently, we see 6 ADDs/DELs for the CSI 300 index and 50 ADDs/DELs for the CSI 500 index.

POSCO Holdings Is Selling Nippon Steel Shares Worth 468 Billion Won

On 19 March, POSCO Holdings (005490 KS) announced that it is selling its stake in Nippon Steel Corporation (5401 JP) worth nearly 468 billion won (US$320 million).
POSCO Holdings’ sale of nearly US$320 million worth of Nippon Steel would be about 1.3% of its market cap.
POSCO Holdings’ sale of its stake in Nippon Steel is a positive move for POSCO Holdings as the company is continuing to execute its strategy of selling off non-core assets.

Makino Milling Machine (6135 JP): Proposes Countermeasures

The Makino Milling Machine Co (6135 JP) Board has proposed introducing countermeasures to nudge Nidec Corp (6594 JP) to delay the start of the tender to 9 May.
The countermeasure was likely needed to facilitate a competing offer rather than force Nidec to provide the required information and delay the start (Nidec is still evaluating the request).
Nidec’s offer at current terms has a low chance of success, necessitating revised terms. The Board claims that there is a sufficient probability of a competing proposal.

Quess Corp Demerger: Value Unlocking & Strategic Shift to Drive Growth

Quess Corp Ltd (QUESS IN) is strategically demerging into 3 distinct segments, enabling focused strategies and boosting growth potential for each, paving the way for greater success and innovation.
Previously, the high-margin Global Technology Solutions segment contributed 12% of revenue, but its potential was overlooked within the larger company. Now, with demerging, it gains specialized focus and proper valuation.
The demerger gives investors the flexibility to choose between cash-generating, high-margin, or moderate-margin businesses, with the added option of a platform for job hunting, all backed by focused, specialized management.

Ramelius-Spartan Merger As Gold Ekes Out New Highs

After being outbid for Karora Resources (KRR CN) and rebuffed by Westgold Resources (WGX AU), Ramelius Resources (RMS AU)has inked a merger with Spartan Resources (SPR AU).
The cash scrip merger – with Ramelius shareholders holding 60.5% of MergeCo – combines operations around the Mount Magnet and Dalgaranga region in Western Australia.
Spartan shareholder will receive A$0.25/share in cash and 0.6957 new Ramelius, or an implied price of A$1.78/share at the time of the merger, and a 27.5% premium to 30-day VWAP.

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Mar 19

Daily Brief Event-Driven: [Activism Japan] Proto Corp (4298 JP) – Kaname Capital Files an Injunction? Bold Strategy and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

[Activism Japan] Proto Corp (4298 JP) – Kaname Capital Files an Injunction? Bold Strategy, Cotton…
EcoNavista (5585 JP) – Takeover By Eisai (4523)
Canvest (1381 HK): Get Involved
Ping An’s Strategic Buyout of OneConnect: Navigating Shareholder Approval and Financial Implications Amidst Declining Performance
Blackstone’s ₹1,800 Crore Residential Bet on Kolte-Patil
Spartan Resources (SPR AU): Ramelius Resources (RMS AU) Attractive Offer
Maynilad Water (MYNLD PM): Index Inclusion Timing for a Large Philippines IPO
Coromandel’s Strategic Play for NACL Industries: Bottom of the Agrochem Cycle Bargain?
Bajaj Finserv Acquires Full Control of Bajaj Allianz Life & General Insurance
Sun Pharma’s Acquisition of Checkpoint Therapeutics: Analyzing the CVR Payout Potential and Strategic Implications

[Activism Japan] Proto Corp (4298 JP) – Kaname Capital Files an Injunction? Bold Strategy, Cotton…

Late on the 17th, Proto Corp (4298 JP) released a filing to the TSE saying activist-ish investor and objector to the current MBO, Kaname Capital, had filed an injunction.
The injunction suit against two directors says procedures were unfair and the decision violated the duty of due care. They ask the Court to rule the directors halt support and…
…that the MBO actor YOKOYAMA Hiroichi not terminate the offer on 21 March 2025. Injunction filings against directors for Tender Offers are rare for a reason.

EcoNavista (5585 JP) – Takeover By Eisai (4523)

EcoNaviSta (5585 JP) has a couple of interesting product lines and platforms. That makes it attractive, and scalable. Synergies to a big buyer are reasonably obvious.
Eisai Co Ltd (4523 JP) is that big buyer, having decided to be interested last summer. I could imagine others could be interested too. The tech has uses.
For the moment, it is a high EV/Revenue bid on an interesting small company. The chairman, cross-holders, directors, and a couple of financial institutions own 66+%. But…

Canvest (1381 HK): Get Involved

After SAFE gave the green light on the 19th Feb, I estimated only a week was required to secure the (strangely) outstanding internal guarantees. It took a frustrating three-and-a-half weeks.
Nevertheless, all pre-cons are now done. Canvest Environmental (1381 HK)‘s Scheme Document is expected to be dispatched or before the 25th April.
Assuming the Scheme gets up – and it will – expect payment around the 20th June. This is done.

Ping An’s Strategic Buyout of OneConnect: Navigating Shareholder Approval and Financial Implications Amidst Declining Performance

OneConnect received a non-binding acquisition proposal from Ping An Group at $7.98/ADS, requiring 75% shareholder approval.
Ping An acquired OneConnect’s virtual banking division for $119m and terminated its cloud services contract in 2024.
The buyout is financially attractive for Ping An, acquiring OCFT at net cash levels, with a US$100m consideration.

Blackstone’s ₹1,800 Crore Residential Bet on Kolte-Patil

Blackstone (BX US) is investing INR 1,800 crore to acquire a 66% stake in Kolte Patil Developers (KPDL IN), marking its first big move into India’s residential real estate market.
This deal signals rising institutional interest in India’s housing sector and sets the stage for a potential residential REIT, similar to Blackstone’s office REIT playbook.
The residential segment, long seen as fragmented and informal, may now see valuation re-ratings, increased M&A activity, and formalization driven by global capital.

Spartan Resources (SPR AU): Ramelius Resources (RMS AU) Attractive Offer

On 17 March, Spartan Resources (SPR AU) entered a binding scheme with Ramelius Resources (RMS AU). Spartan shareholders will receive A$0.25 cash + 0.6957 RMS shares per SPR share.
The scheme vote is low risk as Ramelius has secured irrevocable commitments from Tembo Capital, 1832 Asset Management, and Fourth Sail Capital (18.89% of outstanding shares).
The offer is attractive compared to peer multiples, precedent transactions and historical trading ranges. The scheme meeting is targeted for mid-July.

Maynilad Water (MYNLD PM): Index Inclusion Timing for a Large Philippines IPO

Maynilad Water Services (MYNLD PH) is looking to raise up to US$860m by selling shares at ₱20/share, valuing the company at US$2.82bn.
The market cap and free float will depend on the number of shares sold in the IPO and whether the shares in the upsize option are primary or secondary shares.
Global index inclusions should take place in November and December, while Philippines Stock Exchange PSEi Index (PCOMP INDEX) inclusion could take place in August 2026.

Coromandel’s Strategic Play for NACL Industries: Bottom of the Agrochem Cycle Bargain?

Coromandel International (CRIN IN),a key Murugappa Group company, acquired a 53% controlling stake in NACL Industries for INR 820Crs on March 12, 2025 at INR 76.70 per share.
NACL Industries is a Hyderabad-based agrochemical firm with manufacturing units, a diverse product portfolio, and technical export capabilities, including a presence in contract manufacturing.
With this merger at decent valuation, Murugappa group(which is known for efficient capital allocation) certainly make it more efficient and value accretive for their business.

Bajaj Finserv Acquires Full Control of Bajaj Allianz Life & General Insurance

Bajaj Finserv (BJFIN IN) has acquired Allianz’s 26% stake in both insurance JVs for INR 24,180 crore, gaining full control of Bajaj Allianz Life and General Insurance.
This unlocks platform-wide integration across lending, wealth, and insurance, setting Bajaj up as a full-stack financial services powerhouse with total strategic control.
With valuations set and consolidation likely, India’s insurance sector enters a new era- where scale, tech, and single ownership will drive future leadership.

Sun Pharma’s Acquisition of Checkpoint Therapeutics: Analyzing the CVR Payout Potential and Strategic Implications

Checkpoint Therapeutics is being acquired by Sun Pharma for $4.1/share plus a non-transferable CVR worth up to $0.70/share.
The CVR payout depends on EU approval of Unloxcyt, with four scenarios based on approval timing and dosing schedule.
Shareholder approval is likely due to FBIO’s control and Armistice Capital’s support, with a 66% premium over pre-announcement levels.

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Mar 18

Daily Brief Event-Driven: HKBN (1310 HK): Another Sing Tao Article as Speculation Swirls on MBK’s Loan Notes Conversion and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

HKBN (1310 HK): Another Sing Tao Article as Speculation Swirls on MBK’s Loan Notes Conversion
The Backdrop Behind Today’s Pivot in Samsung’s Playbook
Fengxiang (9977 HK): Privatisation by PAG?
Canvest (1381 HK): Precondition Satisfied
A Potential Family Feud At Dongjin Semichem Post Death of Founder Lee?
DN Solutions IPO: Index Inclusion Timing Depends on Lock-Up Expiry Schedule
StubWorld: Matheson Looks Stretched

HKBN (1310 HK): Another Sing Tao Article as Speculation Swirls on MBK’s Loan Notes Conversion

A new Sing Tao Daily article on HKBN Ltd (1310 HK) claims that China Mobile (941 HK)’s offer is a stalemate, and a potential I Squared offer faces regulatory challenges.
The article is being unduly alarmist. The concerns raised on the China Mobile offer remain premature, and there remains a medium-to-high probability of a competing offer from I Squared.
Last Friday, MBK converted its vendor loan notes (VLN) into shares, which could signal that an I Squared competing offer is imminent.

The Backdrop Behind Today’s Pivot in Samsung’s Playbook

By Sanghyun Park

Jay Lee flipping the switch signals Samsung’s pivot—no more playing defense, no more legal jitters. Market’s reading this as full send on the next phase.
Near-Term, Samsung’s pushing hard—NVIDIA’s HBM qual tests are in focus. With NVIDIA’s event this week, traders are watching for bullish signals after earlier cautious moves.
The real juice? Samsung might drop a bold value-up play and a no-nonsense shareholder message. The prime launchpad: AGM day, this Wednesday, 19th, 9 AM.

Fengxiang (9977 HK): Privatisation by PAG?

Shandong Fengxiang (9977 HK) entered a trading halt “pending the release of an announcement pursuant to the Code on Takeovers and Mergers.” PAG, the controlling shareholder, likely aims to privatise Fengxiang.
The offer will likely be structured as a privatisation by merger by absorption requiring approval by at least 75% of independent H Shareholders (<10% of all independent H Shareholders rejection).
The presence of several substantial shareholders necessitates a reasonable offer. An offer of HK$1.80-2.00 (a 21%—33% premium to the last close) could win over these shareholders’ backing.

Canvest (1381 HK): Precondition Satisfied

Grandblue Environment Co A (600323 CH) has satisfied the precondition related to its privatisation offer for Canvest Environmental Protection Group (1381 HK).
The offer remains attractive despite the re-rating of peers since announcing the deal. The vote risk is low as the two shareholders holding blocking stakes will be supportive.
This is a done deal. At the last close, the gross/annualised spread for a mid-June payment is 3.8%/13.0%.

A Potential Family Feud At Dongjin Semichem Post Death of Founder Lee?

After the death of Dongjin Semichem’s founder Lee on 25 February, the company has yet to reveal the details of the succession plan.
There is a potential for a family feud between the two sons of founder Lee if indeed there was no will directing the late chairman Lee’s ownership of Dongjin Holdings.
A potential family feud for the control of Dongjin Semichem could lead to a grab for shares by both the family members as well as the general investors.

DN Solutions IPO: Index Inclusion Timing Depends on Lock-Up Expiry Schedule

DN Solutions (298440 KS) is looking to raise up to KRW 1,573bn (US$1.08bn), valuing the company at KRW 5.66 trillion (US$3.9bn) at the top end of the IPO price range.
The highest probability of DN Solutions being added to the KOSPI200 Index is at the June 2026 rebalance. The stock needs to move 60% higher to be added in December 2025.
Inclusion in global indices could commence in August/November and will depend on institutional investor lock-up schedules. Flows are small unless the stock moves higher and is included in bigger indices.

StubWorld: Matheson Looks Stretched

Jardine Matheson Holdings (JM SP) posted a 11% drop in FY24 underlying profit; but has promptly gained 9% since.
Preceding my comments on Matheson are the current setup/unwind tables for Asia-Pacific Holdcos.
These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

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Mar 17

Daily Brief Event-Driven: CK Hutchison (1 HK): Political Turbulence and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

CK Hutchison (1 HK): Political Turbulence
Tsuruha (3391) – Welcia (3141) – Tsuruha Earnings In a Week – Still Good To Be Long The Ratio
HKBN (1310 HK): MBK Ups Stake Via VLN Conversion
Ramelius/Spartan Merger: MergeCo Close to ASX100 Index Inclusion
HK Connect SOUTHBOUND Flows (To 14 Mar 2025); Big Volumes, Big Net; Tech and Banks Still Leading
Spartan Resources (SPR AU): A Rumoured Merger with Ramelius Resources (RMS AU)
A/H Premium Tracker (To 14 Mar 2025): AH Premia Still Falling; Expect Curve Torsion or AH Widening
Merger Arb Mondays (17 Mar) – Seven & I, Tenma, Proto, OneConnect, Vesync, Tam Jai, Insignia
Weekly Deals Digest (16 Mar) – Rio Tinto, De Grey, HKBN, ESR, Seven & I, Makino, Tenma, JXAM
SelfWealth (SWF AU): 22nd April Scheme Vote

CK Hutchison (1 HK): Political Turbulence

On 13 March, Ta Kung Pao, a Hong Kong newspaper owned by the Chinese government and Communist Party, denounced CK Hutchison Holdings (1 HK)’s planned port transaction.
The opinion piece is mainly political rhetoric, as even if China managed to block the deal, it would still not address the underlying concerns expressed in the article.
In the near term, the shares will likely be under pressure from a nationalistic backlash. Nevertheless, deal or no deal, the valuation remains undemanding.

Tsuruha (3391) – Welcia (3141) – Tsuruha Earnings In a Week – Still Good To Be Long The Ratio

Tsuruha and Welcia are on the road to a merger, where Tsuruha takes over Welcia but Aeon ends up owning “more than 50% but less than 51%” of Tsuruha.
The Price Ratio is now 4.24x. Trailing EPS ratios is >5. Forward EPS ratios are further above 5. BVPS ratio? Near 5. Welcia grows storecount. Tsuruha makes more money/store.
Tsuruha changed its FY-end to match that of Welcia/Aeon so both will report earnings/guidance in just over 3 weeks. That will likely influence the ratio.

HKBN (1310 HK): MBK Ups Stake Via VLN Conversion

China Mobile (941 HK) has made a pre-conditional HK$5.23/share voluntary Offer for HKBN Ltd (1310 HK). However, a possible separate Offer from I Squared continues to make the news.
In an unusual move, MBK, via Twin Holding, has converted HK$970.5mn of VLNs, at a whopping HK$11.60/share conversion price, lifting MBK’s stake to 16.39% on a fully diluted basis.
Speculation is rife that MBK provides an irrevocable to I Squared for its enlarged shareholding. Maybe. I still don’t see China supporting a U.S.-based infrastructure firm over an SOE .

Ramelius/Spartan Merger: MergeCo Close to ASX100 Index Inclusion

Ramelius Resources (RMS AU) and Spartan Resources /Australi (SPR AU) have signed a binding Transaction Implementation Deed to enter into a ‘Transformational Combination’.
For each share of Spartan Resources (SPR AU) held, shareholders will receive A$0.25 in cash and 0.6957 Ramelius Resources (RMS AU) shares, implying a value of A$1.78/share for Spartan Resources.
The merger is expected to complete late July/ early August, and the merged entity could be added to the S&P/ASX 100 Index in September.

HK Connect SOUTHBOUND Flows (To 14 Mar 2025); Big Volumes, Big Net; Tech and Banks Still Leading

Gross SOUTHBOUND volumes dropped again somewhat but still high at HK$625bn. NET buying by SOUTHBOUND was HK$61bn which is HUGE.
The flows here are still striking. >25% of the top 100 most liquid Southbound eligible stocks saw SOUTHBOUND buy more than 10% of weekly traded volume to March 12.
A summary of important China-related stock news as I saw it this week is included.

Spartan Resources (SPR AU): A Rumoured Merger with Ramelius Resources (RMS AU)

The AFR reports that Ramelius Resources (RMS AU) and Spartan Resources /Australi (SPR AU) are in advanced talks about a low-premium merger through a scheme of arrangement.
A merger will result in synergies due to more significant gold production and lower costs. By adding ore to Mount Magnet, Spartan could fix Ramelius’ near-term production gap.
My analysis suggests an exchange ratio of around 0.82x (0.82x RMS share per SPR share). This implies an SPR price of A$1.80, a 12.8% premium to the last close.

A/H Premium Tracker (To 14 Mar 2025): AH Premia Still Falling; Expect Curve Torsion or AH Widening

AH Premia continue to fall. Spread curve torsion was a barbell this week. Narrow and wide spreads see Hs outperform. Middling spreads outperform less.
To me, warning signs are flashing on spreads. They are at their narrowest in 5yrs and they are volatile, though volatility is coming down.
Lots of spreads see the HA premium less than 15%. That is historically tight.

Merger Arb Mondays (17 Mar) – Seven & I, Tenma, Proto, OneConnect, Vesync, Tam Jai, Insignia

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: Tenma Corp (7958 JP), Seven & I Holdings (3382 JP), OneConnect Financial Technology (OCFT US), Soundwill Holdings (878 HK), Insignia Financial (IFL AU).
Lowest spreads: Makino Milling Machine Co (6135 JP), Shibaura Electronics (6957 JP), Domain Holdings Australia (DHG AU), Proto Corp (4298 JP), PointsBet Holdings (PBH AU).

Weekly Deals Digest (16 Mar) – Rio Tinto, De Grey, HKBN, ESR, Seven & I, Makino, Tenma, JXAM

A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
ECM developments: JX Advanced Metals (5016 JP) to list on 19 March.
Event-Driven developments: Rio Tinto Ltd (RIO AU), De Grey Mining (DEG AU), HKBN Ltd (1310 HK), ESR Group (1821 HK), Seven & I Holdings (3382 JP), Tenma Corp (7958 JP).

SelfWealth (SWF AU): 22nd April Scheme Vote