Event-Driven

• On 10 March, Alimentation Couche-Tard (ATD CN) issued a release “UPDATE ON PROPOSAL FOR A COMBINATION WITH SEVEN & i“.
• They felt obliged to be transparent in the wake of the 7&i Letter To Shareholders released yesterday. The content/nuance of the two letters differ significantly. 
• Two parties competing to get a truth which cannot be both could be problematic. We are still many months away from any kind of ACT/7-11 deal.

• When the Starwood/Warburg Pincus Consortium announced a firm offer on the 4th December, it was pre-conditional on a raft of regulatory approvals from no less than eight countries/jurisdictions. 
• We’re half way there, with four approvals now squared away, leaving Australia, China, Hong Kong and New Zealand still to give the go ahead. 
• Irrevocables comprising 34.26% of the register (and 57.01% of disinterested shares) are now in the bag. This is a done deal. It’s just a question of timing.

• In late November of 2024, Baudroie (4413 JP) announced it would try to move to TSE Prime and that day they announced a 2.76mm share secondary offering and a buyback.
• The buyback was a bit less than a quarter of the offering. Fast forward 3mos and in early March the company announced it would move to Prime. Yesterday it did.
• That puts the company in line for a TOPIX inclusion in end-April , and likely other index effects later. In the meantime, earnings and guidance are out ~10 April. 

• Local instos borrow from brokers or peers, KSD collects and cleans the data, then KOFIA reports stock borrow balances daily with a two-day lag.
• Offshore borrows via EquiLend or PB deals don’t show up—KSD reporting only covers local institution-to-institution stock loans.
• Assume 60% of reported borrow balance is real shortable ammo—adjusting for this helps filter out noise in short positioning.

• Oryx Global Partners teams up with former Kenmare Resources MD Michael Carville for takeover bid
• Kenmare Resources operates moma titanium mine in Mozambique, one of the world’s largest producers
• Weak mineral sands market and political upheaval in Mozambique impact company’s operations and valuation, leading to potential takeover bid

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• The De Grey Mining (DEG AU) IE considers Northern Star Resources (NST AU)’s offer fair and reasonable. The offer is 0.119 NST shares per DEG share.
• The key condition is DEG shareholder approval. Due to the lack of a competing bid, Gold Road Resources (GOR AU), which holds a potentially blocking stake, should support it.
• The offer is attractive compared to historical trading ranges. At the last close and for a 5 May payment, the gross/annualised spread is 2.4%/18.2%.

• Back on the 2nd Dec 2024, De Grey Mining (DEG AU), which boasts one of Australia’s largest undeveloped gold projects, announced a merger with Northern Star Resources (NST AU).
• Northern Star offered 0.119 new shares for every De Grey share, and will hold ~80.1% of the combined entity upon a successful Scheme, with De Grey shareholders the remaining ~19.9%.
• The Scheme Booklet is now out, with a Scheme Meeting on the 16th April. Expected implementation on the 5th May. The IE (KPMG) says fair & reasonable.

• On Thursday 6 March we got a Nikkei article then a company announcement for Seven & I Holdings (3382 JP)‘s proposed management measures and update on ACT Bid Process.  
• It involved Isaka-san stepping down, Stephen Dacus stepping up, selling York to Bain for ¥814.7bn, IPOing 7-Eleven US, a ¥2trln share buyback over 5yrs, and ACT process update. 
• It was OK. Good, bad, and ugly. But Artisan wrote a letter over the weekend and 7&i responded and suddenly, their concerns are mostly addressed and the outlook is different.

• The Seven & I Holdings (3382 JP) Board has released a public letter to address Artisan Partners’ letter and provide more details on the Alimentation Couche-Tard (ATD CN) constructive engagement. 
• The letter effectively addresses most of Artisan’s concerns. The Board is engaging with Couche-Tard, particularly by agreeing on a strategy to find a solution to secure antitrust approvals. 
• However, the statement suggests that the Board retains deep scepticism that the Couche-Tard is viable and is manoeuvring to shift the blame on a failed bid on a flawed proposal. 

• Makino Milling Machine Co (6135 JP) has disclosed that it has received initial letters of intent from multiple third parties, reportedly private equity funds, to launch a competing tender offer.
• My analysis suggests that a white knight bid could be as high as JPY13,284, 20.8% higher than Nidec’s JPY11,000 offer and 10.2% higher than the last close price of JPY12,050.
• Nidec Corp (6594 JP) will take a wait-and-see approach. However, regardless of whether a white knight bidder emerges, Nidec will eventually have to bump.

• On 10 March, Young Poong (000670 KS) announced that it plans to cancel all of its treasury shares and conduct a 10-to-1 stock split.
• Driven by the treasury shares cancellation and stock split, Young Poong’s share price rose 8.9% to 489,000 won today (10 March 2025). 
• Our updated NAV of Young Poong suggests NAV per share of 834,064 per share, representing a 71% upside from current levels.

• On 7 March, Insignia Financial (IFL AU) disclosed a revised non-binding privatisation offer from Bain and CC Capital at A$5.00, an 8.7% premium to their previous A$4.60 offer.
• The exclusive due diligence period ends on 17 April (six weeks from signing the exclusivity deed). The Board will recommend a binding offer of at least A$5.00. 
• The offer is attractive compared to historical trading ranges, peer multiples and precedent transactions. Therefore, a binding offer would gain shareholder support.

• Sun Pharmaceutical Industries (SUNP IN) (SPIL) announced the plan to acquire Checkpoint Therapeutics (CKPT US), a commercial stage immunotherapy and targeted oncology company, for ~$200M.
• In December, Checkpoint has received FDA approval for its maiden drug, Unloxcyt (cosibelimab), for the treatment of certain type of skin cancer. Unloxcyt has peak sales estimate of $1.6B.
• SPIL’s offer for Checkpoint seems compelling and provides superior risk-adjusted value. However, the acquisition will not be near-term value generator for SPIL, which doesn’t have good track record for acquisition.

• I’m closing out my Kenvue (KVUE) recommendation and will be selling my shares.

• Following the spin-off from Johnson & Johnson (JNJ), KVUE shares performed poorly for a variety of reasons (lockluster growth, Tylenol related litigation, etc.) that I thought were overblown.

• At the time, Kenvue was trading at a sharp discount to its consumer health care peers. Today, Kenvue trades at a slight discount to peers (21 P/E vs. 23.3x for the group).

• The USTR issued a Section 301 report in January 2025. The report suggests China has tried to achieve dominance in global shipping, to the detriment of US commerce.
• The report is flawed, in data (it somehow manages to make up data which is otherwise available from MARAD), analytics, and conclusions, but the Trump administration has run with it.
• In February, the USTR announced “Proposed Actions” – fees for Chinese liners and international liners with Chinese ships, and restrictions on future exports. US users lose. And there are loopholes.

• AH Premia continue to fall. Spread curve torsion reverses again with wide premia trades seeing Hs perform the best vs their As.
• To me, warning signs are flashing on spreads. They are at their narrowest in 5yrs and they are volatile. Last week I recommended a HUGE trimming (30%) of the book.
• Hindsight is 20:20. I should have kept them, but the book still produced 51bp of alpha for the week on top of the 35bp of H/A beta. 

• Gross SOUTHBOUND volumes dropped somewhat but still high. NET buying by SOUTHBOUND was HK$35bn which is still quite strong. Round-tripping volume down 20% week-on-week.
• The flows here are still striking. >20% of the top 100 most liquid Southbound eligible stocks saw SOUTHBOUND buy more than 10% of weekly volume. 
• It feels like there is some common understanding among SOUTHBOUND investors which I do not understand. The numbers are big/growing.

• 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: Naigai Trans Line (9384 JP), Soundwill Holdings (878 HK), Seven & I Holdings (3382 JP), OneConnect Financial Technology (OCFT US), Smart Share Global (EM US). 
• Lowest spreads: Shibaura Electronics (6957 JP), Domain Holdings Australia (DHG AU), PointsBet Holdings (PBH AU), Makino Milling Machine Co (6135 JP), Proto Corp (4298 JP). 

• After small-cap property developer Soundwill Holdings (878 HK) was suspended pursuant to the Takeovers Code, I expected an Offer by way of Scheme. 
• And that is what unfolded. Grace Foo (ED) and her family, controlling 74.97% of shares out, are Offering $8.50/share, including a $1.00/share dividend, a 62.84% premium to undisturbed.  
• That’s still a whopping 87.66% discount to the most recent NAV (30th June 2024). But what are the options for minorities (apart from the headcount test)? And terms are final. 

• Abrdn Diversified Income And Growth is undergoing a wind-down, trading at a 30% discount to NAV, with potential liquidation acceleration.
• OCI N.V.’s methanol business sale to Methanex is pending regulatory approvals, with unresolved Natgasoline JV stake issues affecting transaction value.
• Pacific Current Group’s A$300m buyback tender extended, with shares trading below tender price, and potential further capital returns.

• There were no new spin-off announcements this week.

• The Middleby Corporation (MIDD) announced its plan to spin off its food processing business on February 25, 2025.

• This strategic move aims to allow Middleby to concentrate on its core commercial foodservice and residential kitchen equipment sectors, while enabling the new entity to focus exclusively on food processing operations.

• If indeed the company proceeds with 2 trillion yen buyback over five years, this would represent buyback of about 7.3% of its shares per year (37% of market cap). 
• Seven & I Holdings’ plans to massively buyback shares and IPO its North American CVS business are major catalysts that should have positive impact both near and long term. 
• Certainly, the company’s action plan to sell its non-core assets (including supermarket, restaurant, and specialty stores) to Bain Capital for $5.5 billion is a step in the right direction.

• Soundwill Holdings (878 HK) announced a privatisation offer from the Foo Family, the largest shareholder, at HK$8.50 (HK$7.50 cash + HK$1.00 special dividend), a 62.8% premium to the undisturbed price.
• Key conditions include approval by at least 75% of independent shareholders (<10% of independent shareholders rejection) and a headcount test. No disinterested shareholder holds a blocking stake.
• While the offer is light compared to peer multiples, it is attractive compared to historical trading ranges. A low AGM minority participation rate facilitates the vote. 

• Did Trump do CKH (1 HK) a solid, convincing them to sell assets that have profited from international trade growth, just as Trump starts imposing tariffs on anything that moves?
• An OK package for Seven & I (3382 JP). Not perfect. SEI IPO’s a bit dodgy. It may be designed to spur ACT into action, but isn’t an awful fallback.
• Macromill (3978 JP)‘s Offer bumped.  If you want to make sure this deal doesn’t get done, do the things you need to do to make sure it doesn’t get done.

• I tally 55 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma.
• Three news new deals discussed this week:Soundwill Holdings (878 HK), Oneconnect Financial Technology (6638 HK), Snt Corp (6319 JP), Aeon Delight (9787 JP), and AEON Mall (8905 JP).
• Key updates/news took place on: Insignia Financial (IFL AU), Seven & I Holdings (3382 JP), Sun Art Retail (6808 HK), and Macromill, Inc (3978 JP).

• Coforge (COFORGE IN)‘s $1.56 billion deal with Sabre positions it as a major player in travel technology, but concerns over Sabre’s financial stability create potential risks for long-term execution.
• Acquisitions of Rythmos and TMLabs align with Coforge’s strategy to enhance cloud, data, and enterprise IT capabilities, strengthening its market position in airline and ServiceNow implementation services.
• While analysts recognize strong revenue visibility, Sabre’s $5.1 billion debt and negative net worth raise cash flow concerns, leading to a divided outlook on Coforge’s future profitability and risk exposure.

• On 7 March, the Seoul Central District Court ruled that it is reasonable for Korea Zinc to maintain the concentrated voting system, which should favor Chairman Choi and his allies.
• On the other hand, the court also ruled that Korea Zinc was wrong to restrict Young Poong’s voting rights which should be favorable to MBK/Young Poong alliance. 
• The fact that the court has allowed concentrated voting system would mean the M&A of Korea Zinc will continue. 

• Naigai Trans Line (9384 JP) has recommended a tender offer from IA Partners at JPY4,065 per share, a 62.3% premium to the last close.
• Despite being below the midpoint of the target IFA’s DCF valuation range, the offer is attractive compared to historical trading ranges and represents an all-time high. 
• Given that the offer is reasonable, the required minority acceptance rate is attainable. The offer is from 10 March to 21 April, with payment on 28 April. 

• Acelyrin agreed to an all-stock merger with Alumis, valued at $2.2/share, requiring shareholder approval with 24% support.
• Tang’s $3/share cash offer was rejected; activists hold 11% stake, acquired near $2/share, with unclear agendas.
• ALMS merger has 62% support; Ayurmaya Capital holds 22% of ALMS, 9% of SLRN, and supports the merger.

• Last Thurs the MBO died. Tuesday an article said the ACT deal had died. Then 7&i denied that. Yesterday an article said Bain’s York Holdings deal would be approved today.
• That meant a Board meeting which would approve receipt of ~¥700bn of cash. What to do with it?
• Just now, Bloomberg says Seven & I Holdings (3382 JP)‘s board will consider a massive buyback. THAT is the capital allocation news my last piece suggested necessary. It’s HUGE.

• Today, partway through the day, we got a Bloomberg article suggesting a large-scale buyback was to come. Post-close, we got the full details. 
• “Seven & i Holdings Announces Plan to Unlock Shareholder Value Through Leadership Changes and Transformational Capital and Business Initiatives”. 
• Sale of York. Management change. Update on Special Committee work with ACT. Commitment to return ¥2trln to shareholders via buybacks by FY2030. Higher divs. IPO of 7-Eleven Inc (US).

• The Seven & I Holdings (3382 JP) Board announced a plan to unlock and distribute significant value to shareholders.
• The initial excitement focused on the positives of leadership changes, US Assets IPO, a higher-than-expected valuation for the Superstore Business and a considerable buyback. 
• The negatives of a long-dated buyback, inevitable rejection of the Couche-Tard offer, an uncertain US Assets IPO and ongoing HoldCo discount suggest the initial excitement will fizzle out. 

• The March 2025 Nikkei 225 review came out with a sparse set of changes. That gives us hints for the September 2025 review.
• I see one ADD and one DELETE. Fast Retailing capping is right on the border. BayCurrent will see an upweight.
• The lack of effort to address sector imbalances within the rules suggests the rules are not as hard as people thought. Intra-review changes could be more interesting in years ahead.

• Late December 2024, Alibaba (9988 HK) entered an SPA with DCP Capital to offload its 78.7% stake in Sun Art (6808 HK) at HK$1.38/share, a 44.4% discount to last close.
• The SPA completed on the 27th Feb, triggering an unconditional MGO, also at HK$1.38. FWIW, a deferred payment option raises the Offer Price to a maximum of HK$1.58/share. 
• The Composite Document is now out, with a Closing Date for tendering on the 27th March. This won’t be extended. The IFA (Somerley) says NOT fair & reasonable.

• On 27 December, Nidec Corp (6594 JP) announced a hostile preconditional tender offer for Makino Milling Machine Co (6135 JP) at JPY11,000 per share.
• The Board has raised several issues with the Nidec proposal through two questionnaires. Some assertions are valid, while others do not stand up to scrutiny.
• The Board has launched an ambitious MTM plan to thwart the offer and hinted at potential competing offers. Nidec’s offer increasingly needs a bump. 

• Trial was already one of Japan’s leading discount retailers with a strong network of stores down south in Japan although rather low margins.
• Buying Seiyu transforms this local retailer into a national champion and one of the top 10, with a highly complementary set of stores, product expertise, warehouses and tech.
• Together, the two will now be able to take on Aeon, Seven & I, PPI and other major retailers in building the first true national grocery chains in Japan.

• Bain Capital and CC Capital have both bumped indicative terms to $5/share,  a 63% premium to Insignia Financial (IFL AU)’s undisturbed closing share price of $3.06 on December 11 2024.
• Both suitors have been granted four weeks of exclusivity. Confirmatory due diligence is expected to be completed within six weeks. IFL’s board is supportive at A$5/share or more. 
• Where’s Brookfield on all this? A local media source previously reported that at least one suitor was losing interest. 

• ADIG, a £140m investment trust in liquidation, trades at a 30% discount to its estimated £0.68/share NAV.
• The trust is in exclusive talks to sell its entire portfolio, potentially accelerating the liquidation timeline.
• The portfolio comprises private market assets and cash, generating £10m annually, with £33m in undrawn commitments.

• As part of a US$22.8bn transaction, BlackRock, Global Infrastructure Partners and Terminal Investment, have agreed to buy two contentious Panama ports from Li Ka-shing’s CK Hutchison (1 HK) (CKH).
• The transaction also includes an 80% stake in CKH’s ports subsidiaries, which operate 43 ports comprising 199 berths in 23 countries.
• CKH expects cash proceeds in excess of US$19bn. CKH’s current market cap was – at the time of deal – also  ~US$19bn. 

• The demerger of three verticals will separate biopharma and profitable spirits from bio-based specialties and performance chemicals will be the catalyst for the company.
• The expansion in potable spirits, set for completion by March 2025, is expected to drive growth in this segment, alongside anticipated recovery in the core chemical business.
• The Potable spirits segment accounted for 45% of revenue but contributed 58% of EBITDA margins, benefiting from backward integration that drives higher margins.

• Seven & I Holdings (3382 JP) denied a Yomiuri article that the Board has decided not to accept an Alimentation Couche-Tard (ATD CN) bid in favour of the restructuring plan.
• Despite the Board’s assertions that it is still having constructive discussions with Couche-Tard, its actions suggest otherwise.
• Couche-Tard remains interested but faces increasing roadblocks. The valuation is undemanding but the news flow is unlikely to support a rerating in the near-term.

• CK Hutchison Holdings (1 HK) (CKH) is trading “cheap” as Panama’s Supreme Court agrees to consider a request to nullify CKH’s canal concessions. 
• Preceding my comments on CKH, CK Infrastructure Holdings (1038 HK) (coming up cheap on my monitor), and Power Assets Holdings (6 HK) 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%.

• Japan Post Holdings (6178 JP) (JPH) aims to sell around US$4bn worth of Japan Post Bank (7182 JP) (JPB), trimming its stake to below 50%.
• JPH had last sold around US$9bn worth of JPB shares in Mar 2023. That deal had a similar structure and it didn’t end up performing well.
• We have looked at the deal dynamics in our previous note. In this note, we talk about the updates since then.

• Today, the last day of the ¥1,250 “Final Price” CVC Tender Offer for Macromill, Inc (3978 JP), CVC has bumped price to ¥1,275 and extended another two weeks.
• In the process, they got agreement from GMO to tender their 12.1% and GMO gets to reinvest into an 18-19% position in the Bidco. 
• Investors are now competing against “activists” who aren’t in public markets. 20.6% of the register don’t like the ¥1,250-1,275 price either. But they aren’t selling. They’re re-buying there. You’re not.

• Toyo Seikan Group Holdings L (5901 JP) started down the “good governance path” a couple of years ago. The stock ran up. Then it drifted back lower.
• They had promised a decent payout ratio, cross-holding sales, and “buybacks conducted in an agile manner.”
• On Friday 28 Feb, the company announced a large buyback and future share cancellation.

• On 4 March, Korea Exchange announced that it will designate Kum Yang (001570 KS) as an administration stock, resulting in a deletion from KOSPI 200 index.
• These increased penalty points and fine are mainly from the company inflating the expected performance of a Mongolian mine which the company had plans to acquire shares.
• We continue to remain negative on Kum Yang. As a result of designation as an administration stock and deletion from KOSPI 200, investors will likely push down this stock further.

• The range of ideas is broad. The smallest market cap is a $15MM Canadian micro-cap that is trading below its net cash, and the largest is an $25BN market cap online travel company that is gobbling up its own shares.
• We have ideas profiled from Poland, Canada, India, Austria, Argentina, Italy, and of course, the United States.
• The report will start with my personal favorite idea and then cover the additional ideas in alphabetical order.

• Sapporo Holdings (2501 JP)’s beer, food, and soft drinks businesses are now trading near 19.0x our 2025 OP estimate, suggesting some remaining upside, especially if guidance is revised upward.
• We believe the company’s 2025 guidance is overly conservative, as Sapporo stands to benefit the most from Japan’s liquor tax revisions.
• If growth momentum persists, we estimate 2025 OP could reach ¥22.3bn, surpassing the current ¥17.5bn guidance, though the 300% upside driven by investor activism has mostly run its course.

• Despite declaring the previous JPY1,250 offer final, CVC has bumped its Macromill, Inc (3978 JP) offer by 2.0% to JPY1,275. 
• CVC has secured an irrevocable from GMO. The total irrevocable represents a 23.67% ownership ratio. Despite the bump and GMO irrevocable, success still hangs in the balance.
• Securing TriVista’s support remains elusive, and CVC could try to lower the minimum tendering condition. The downside is low, as the backend will have support on a deal break.

• Today, Toyota Motor (7203 JP) announced a new Shareholder Benefit Program (株主優待 or kabunushiyutai). Often these programs are designed to give small unknown companies a way to build shareholder awareness/loyalty. 
• Toyota, needless to say, is not a small, unknown company building awareness. So this is a bribe or inducement to own shares or get people to use higher value product.
• This is not a great look, and not great for shareholders. It smells of Toyota trying to buy votes as crossholders sell. But below we look at the math.

• If brokers let shorts exceed borrow, TRS end investors risk getting caught in the legal crossfire.
• Some TRS players are setting up short-book systems and reg numbers proactively, ensuring brokers share borrow data to stay ahead of any compliance risks.
• With most illegal shorts tied to TRS, and TRS dominating the market, the FSS will likely introduce TRS-specific rules rather than granting exemptions.

• TSE-Listed companies are asked to file “Management Conscious of Capital Cost/Stock Price” awareness reports/policies. Many have. Some are still working on it. And policies change, and CGR reports are updated.
• 161 new CGRs were filed in February 2025. Our tools show every report, links to every document, and now a new diff file tool. Input a name, see the changes.
• THE BIG NEWS: The “Document 3” (linked below) of the TSE’s 20th Council Meeting 18 Feb is worth reading carefully. This will set the stage for more takeover fun.

• On 26 February, PointsBet Holdings (PBH AU) entered a scheme implementation deed with Mixi Inc (2121 JP) at A$1.06, a 27.7% premium to the undisturbed price of A$0.83 (25 February).
• Subsequently, BlueBet Holdings (BBT AU) disclosed a competing non-binding cash-and-scrip offer worth a combined equity value of A$340-360 million or A$1.02-1.09 per PBT share.  
• BlueBet has limited headroom to engage in a bidding war, particularly as its share price weakens. The share price already factors in a potential bump from Mixi. 

• Oneconnect Financial Technology (6638 HK) disclosed a preliminary non-binding privatisation offer from Ping An Insurance (H) (2318 HK) at HK$2.068 (US$7.98 per ADS), a 72.33% premium to the undisturbed price.
• Despite the hefty premium, the offer is opportunistic as it values OneConnect around net cash and is at a material discount to historical trading ranges. 
• If a binding proposal materialises, the offer price will not be increased. A high minority participation rate could be an issue for the vote.  

• Dual-Listed OneConnect Financial Technology (6638 HK/OCFT US), a digital retail banking/commercial banking/ digital insurance play, has announced a non-binding proposal from Ping An, OneConnect’s controlling shareholder with 32.12%.
• Ping An is offering, by way of a Scheme, HK$2.068/share, or US$7.98/ADS, a 72.33% premium to last close, and a 131.66% premium to the 30-day average. The price is final. 
• What now? Back in OneConnect’s boards’ court whether to engage or not. Which they should. No competing Offer will emerge.

• Discounts to NAV of covered holdcos didn’t follow a clear trend during February 2025. Discounts to NAV: C.F.Alba, 14.1% (vs. 12.9% as of 31 January 2025); GBL, 38.7% (vs. 40%);
• Heineken Holding, 13% (vs. 13.2%); Industrivärden C, 5.1% (vs. 3.0%); Investor B, 2.3% (vs. 4.5%); Porsche Automobile Holding, 38.1% (vs. 36%). Rio DLC spread tightened to 17% (vs. 20.3%).
• What seems interesting (unchanged views): Porsche SE vs. listed assets and the Rio DLC (long RIO LN/short RIO AU).

• AH Premia continue to fall. Spread curve torsion reverses again with narrow premia trades seeing Hs perform the best. 
• Warning signs are starting to flash on spreads. This week I have the biggest week of changes recommended that I have ever had. By a long ways.
• This week threatens to be a very strange week geopolitically. Being smaller in crowded trades is probably a good thing.

• Gross SOUTHBOUND volumes cleared HK$800bn for the second week in a row. NET buying by SOUTHBOUND was HK$75bn which was perhaps a new record.
• Notable again is the HUGE back-and-forth. If HK$865bn traded and SOUTHBOUND “only” bought HK$75bn, HK$395bn was round-tripped for short-term purposes.
• Last week I flipped to short Alibaba Group Holding (9988 HK). Sentiment may worsen and there’s lots to sell later this week. Staying short Alibaba for now. 

• Sparx on Friday announced a Tender Offer at 0.55x book and an EV of less than inventory (<20% of revenue) for Snt Corp (6319 JP) – another metal monozukuri company.
• Last year they did it on IJTT Co., Ltd. (7315 JP). That one got bumped. This one could too, but cross-holders own nearly 60%.  
• This kind of company has skill-sets which may be portable but the product line is tied to old Japan. The takeover 

• 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: Tonami Holdings (9070 JP), Seven & I Holdings (3382 JP), Aeon Delight (9787 JP), Smart Share Global (EM US), Insignia Financial (IFL AU), Tam Jai International (2217 HK). 
• Lowest spreads: Millennium & Copthorne Hotels Nz (MCK NZ), Shibaura Electronics (6957 JP), Makino Milling Machine Co (6135 JP), Domain Holdings Australia (DHG AU), Proto Corp (4298 JP).   

• Pentamaster International (1665 HK)‘s Scheme overwhelmingly gets up after a wild week of trading.
• After touching an intra-day low of HK$0.78/share on the 25th Feb – 28% adrift of the HK$1.00/share terms – shares closed at HK$0.97/share prior the results of the Scheme Meeting. 
• 58.2% of disinterested shareholders opted to vote. Just 0.5% of those shareholders present voted against the Scheme; or just 0.29% of total disinterested shareholders. Not even close.

• AEON Mall (8905 JP) and Aeon Co Ltd (8267 JP) announced a MoU for the potential privatisation of Aeon Mall through a share exchange offer.
• The terms of the share exchange are expected to be announced in early April and be implemented in July. 
• Aeon’s 58.16% shareholding facilitates passing the Aeon Mall shareholder vote. My analysis suggests a potential share exchange (Aeon Mall/Aeon) ratio range of 0.60x-0.69x.

• On Monday, Western Digital (WDC) spun off its NAND flash business, Sandisk (SNDK).

• On Friday, CompoSecure (CMPO) spun off its management company, Resolute Holdings (RHLD).

• During the week, we got earnings from Howard Hughes (HHH) and Sunrise Communications (SNRE).

• SpringWorks Therapeutics (SWTX) is in late-stage acquisition talks with Merck KGaA, with a potential buyout offer at $85/share.
• Liquidia (LQDA) had its FDA case denied, delaying Yutrepia’s market entry until May 2025, with commercialization on track.
• ContextLogic (LOGC) received a $150m strategic investment from BC Partners, enhancing its cash balance and NOL monetization potential.

• Sage Therapeutics rejected Biogen’s $7.22/share offer, initiating a strategic review for potential sale, indicating a possible higher premium.
• SPAR Group’s merger with Highwire Capital faces uncertainty due to funding issues, with potential for significant stock price decline.
• Kronos Bio’s strategic review follows clinical trial discontinuation, with potential sale or reverse merger, trading below net cash value.