Event-Driven

Never a dull moment for Korea Zinc (010130 KS) (KZ). After MBK/Young Poong’s injunction to block KZ’s buyback was denied, KZ, together with Bain Capital, tabled a punchy Offer.
KZ has launched a 3.21mn share buyback (15.5% of shares out) at ₩830,000/share. Bain will also buy 2.5%. KZ’s buyback is to be funded by short-term loans and corporate bonds.
MBK/Young Poong have filed another injunction against this buyback. Its case has merit. And that legal overhang ostensibly accounts for KZ trading ~14% below the buyback terms.

Legal Chaos Amid Young Poong Filing a Criminal Complaint Against Korea Zinc’s BOD and What’s Next?

Young Poong filed a criminal complaint against the board of directors of Korea Zinc (010130 KS) who voted in favor of the tender offer by buying back Korea Zinc’s shares.
If Korea Zinc proceeds with the share buyback at higher price than the tender offer price by MBK, there are two main scenarios.
Trading Action Point: If Uncertain, Watch the Price Action in the Next Several Days

Kusuri No Aoki (3549) Big Buyback – Accretive, And May Involve Musical Shares

The drugstore space in Japan is super-interesting. The stories, the mergers, the activists. And of course, the defence against activists.
In Feb-2024, Aeon did a deal with an activist to cause a future deal between Tsuruha and Welcia. Aeon also owns a stake in Kusuri no Aoki Holdings (3549 JP).
The Aoki brothers (CEO and VP) exercised warrants in August and re-arranged their holdings. Now the family owns 34.7%. Today, after Q1 earnings, the company announced a 5+% buyback.

MBK Hikes Youngpoong Precision Tender Price to ₩30,000: Tender Deadline Extended to the 14th

MBK is raising its tender offer for Young Poong Precision to ₩30,000 per share, matching Choi’s offer and extending the deadline to October 14. Filing expected tomorrow before market open.
MBK targets 6.84 million shares, surpassing Choi’s 3.94 million cap. No hard floor, no cancellation risk, but MBK holds an edge in proration.
The buzz is whether MBK will raise its Korea Zinc bid beyond 900,000 KRW, as Choi prepped with a 950,000 KRW offer. A bid hike and extension seem likely.

Bharti Hexacom IPO Lockup – US$1.2bn Lockup Expiry, Will Have to Sell for Free-Float

By Sumeet Singh

Government of India raised around US$513m via selling some of its stake in Bharti Hexacom’s IPO in Apr 2024. Its IPO lockup is set to expire soon.
Bharti Hexacom (BH) is a communications solutions provider offering consumer mobile services, fixed-line telephone and broadband services to customers in the Rajasthan and the Northeast.
In this note, we will talk about the lockup dynamics and possible placement.

Samson (531 HK): 21 Oct Shareholder Vote

Back on the 16th July, furniture trader Samson Holding (531 HK) announced an Offer, by way of a Scheme, from Shan Huei Kuo, Samson’s Chairman.
The Cancellation Price is $0.48/share (final), a 50% premium to last close; but more notable if going back a month. This looks done. However, Samson is an illiquid micro-cap.
The Scheme Doc is now out, with a Court Meeting to be held on the 21st October. Expected payment on the 14 November. The IFA says fair & reasonable.

Samson Holding (531 HK): Scheme Vote on 21 October

Samson Holding (531 HK)’s IFA opines that Mr Samuel Kuo (Chairman)’s HK$0.48 privatisation offer to be fair and reasonable. The vote is on 21 October.
Key conditions include approval by at least 75% of independent shareholders (<10% of independent shareholders rejection). Despite the market rally, most peers’ shares have declined since the offer announcement.
The attractive premium, lack of shareholders holding a blocking stake, and low AGM minority participation rate point to a done deal. At the last close, the gross/annualised spread is 3.2%/29.8%.

MBK Raises Tender Offer Price of Young Poong Precision to 30,000 Won

MBK Partners announced that it is raising its tender offer price for Young Poong Precision from 25,000 won to 30,000 won, matching Choi family’s tender offer price of 30,000 won.
Accordingly, MBK’s tender offer period for Young Poong Precision has been extended from 6 October to 14 October.
The revised up tender offer price of Young Poong Precision by MBK at 30,000 won is likely to result in boosting its stock price closer to the 30,000 won.

Quiddity Leaderboard Hang Seng Index Dec 24: Special Focus on IT, Healthcare, and SOEs

The Hang Seng Index is the benchmark index for Hong Kong stocks. It follows a highly-subjective selection process which makes it difficult to predict index changes.
In this insight, we take a look at a group of names with reasonably high likelihood of being involved in index changes during the next review in December 2024.
The index changes for the December 2024 index rebal event will be announced after market close on 22nd November 2024.

SET50 Index Rebalance Preview: Four Changes as Adds Outperform Deletes

A third of the way through the review period for the December rebalance of the Stock Exchange of Thailand SET 50 Index (SET50 INDEX), we see four potential index changes.
Passive trackers will need to buy between 0.5-4.3 days of ADV on the inclusions and sell between 0.1-2.9 days of ADV on the deletions.
The forecast adds have outperformed the forecast deletes and the Stock Exchange of Thailand SET 50 Index (SET50 INDEX) over the last 5 months.

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Oct 03

Daily Brief Event-Driven: Korea Zinc’s Buyback Tender Offer at ₩830 and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Korea Zinc’s Buyback Tender Offer at ₩830,000: Market Vibe Still Leans Towards MBK
Court Dismisses Injunction; Korea Zinc to Announce Buyback Tender Offer Soon
ASMPT (522 HK): Don’t Bet on a KKR Privatisation
GA Pack (468 HK): Crunch Time
Korea Zinc: Plans to Buy Back and Cancel Shares Worth 2.7 Trillion Won + Team Up with Bain Capital
ASMPT (ASM Pacific). 522 HK. M&A. Takeover Target Talk. Déjà Vu ?
CMCDI (133 HK)’s Proposals Light On Detail
ASMPT (522 HK): KKR’s Proposal Is A Non-Starter
KOSPI200 Index Rebalance Preview: 4 Adds, 5 Deletes Likely in December
Quiddity Leaderboard HSTECH Dec 24: Midea Group Question Mark and Final Rankings for Exp ADDs/DELs

Korea Zinc’s Buyback Tender Offer at ₩830,000: Market Vibe Still Leans Towards MBK

Korea Zinc is launching a 3.21M share buyback (15.5% of total shares) via a KRW 2.66T tender offer at ₩830,000 per share, with Bain Capital involved.
If tendered shares fall short, Korea Zinc and Bain Capital will buy all. If over the target, they’ll buy pro rata. Below 1,215,283 shares, they will opt out.
Should we dive into Korea Zinc’s risky buyback or choose safer, lower-priced MBK? The market vibe favors MBK, reflected in Korea Zinc’s closing price today.

Court Dismisses Injunction; Korea Zinc to Announce Buyback Tender Offer Soon

The court rejected MBK and Young Poong’s injunction to block Korea Zinc’s buyback, allowing Choi’s side to continue using buybacks to defend control.
Korea Zinc plans an emergency board meeting to launch a tender offer, using internal funds, to buy back shares at 800K-850K KRW starting around October 7.
If Choi converts discretionary reserves into distributable profits, Korea Zinc could unlock 2-3 trillion KRW for the buyback, but uncertainty keeps the stock around 700K KRW.

ASMPT (522 HK): Don’t Bet on a KKR Privatisation

Bloomberg reported that KKR has made a non-binding, preliminary approach to taking ASM Pacific Technology (522 HK) private. ASMPT has been the subject of takeover rumours in the past.
The trading patterns of the substantial shareholders suggest a willingness to exit. However, past privatisation rumours suggest issues with the offeror matching key shareholders’ price expectations.
A binding proposal is unlikely as the timing would be viewed as opportunistic, with the recent market rally eroding a potential takeover premium and ASMPT’s premium multiple compared to peers.

GA Pack (468 HK): Crunch Time

Unsurprisingly, the Greatview Aseptic Packaging (468 HK) Board has recommended shareholders vote against the appointment of Shandong Xinjufeng Technology Packaging (301296 CH)’s two director nominees.
The EGM vote on 18 October is too close to call and depends on Shandong Xinjufeng and management’s ability to rally disengaged minorities to their respective causes.
Irrespective of the EGM vote results, Shandong Xinjufeng will be keen to launch its offer to ward off the threat of a possible competing offer from management.

Korea Zinc: Plans to Buy Back and Cancel Shares Worth 2.7 Trillion Won + Team Up with Bain Capital

Korea Zinc plans to repurchase and cancel shares worth 2.663 trillion won. Korea Zinc’s partner Bain Capital also plans to purchase around 430 billion won for a 2.5% stake.
Korea Zinc plans to buy back shares at 830,000 won per share, which is 11% higher than MBK’s revised up tender offer price of 750,000 won.
Choi family/Bain Capital’s efforts to conduct a massive share buyback and cancellation at higher prices than the market price goes against the globally accepted market practices.

ASMPT (ASM Pacific). 522 HK. M&A. Takeover Target Talk. Déjà Vu ?

By Neil Campling

The second PE rumoured interest in ASMPT in 18 months, with KKR circling.
Semiconductor M&A has surged in 2024 YTD with a 33% increase in deal activity compared to 2023.
ASM’s leadership in TCB, potential growth within HBM, expansion at TSM and enabling the Nvidia Blackwell platform are all reasons for M&A interest.

CMCDI (133 HK)’s Proposals Light On Detail

Argyle Street Management (ASM), a 9.01% shareholder in China Merchants China Direct Investments (133 HK), has been (very) publicly angling for change in this closed-end fund. Here is their website.
The core issue is CMCDI’s P/NAV ratio of 0.41x compared to closed-end fund peers of 0.8x-0.9x.
CMCDI has finally responded to ASM’s overtures with the prospect of a share buyback and a special dividend. But details are thin on the ground.

ASMPT (522 HK): KKR’s Proposal Is A Non-Starter

Reportedly – Bloomberg – KKR has made a non-binding proposal for ASM Pacific Technology (522 HK), the world’s leading back-end semiconductor production equipment supplier.
ASMPT’s largest shareholder, ASM International Nv (ASM NA), with 25%, has been the focus of activists for some time to sell its stake.
This bid has all the hallmarks of the approach (also cited by Bloomberg) by PAG last year. Which came to nought. From a regulatory standpoint, I can’t see this happening.

KOSPI200 Index Rebalance Preview: 4 Adds, 5 Deletes Likely in December

85% of the way through the review period, there could be 4 adds and 5 deletes for the Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) in December.
The impact on the potential inclusions ranges from 1.4-17 days of ADV while the impact on the potential deletions varies from 4-8 days of ADV.
The potential adds outperformed the potential deletes early in the review period before giving up all the gains over the following months.

Quiddity Leaderboard HSTECH Dec 24: Midea Group Question Mark and Final Rankings for Exp ADDs/DELs

The HSTECH Index tracks the performance of the top 30 technology companies listed in Hong Kong that have high business exposure to certain technology themes.
In this insight, we take a look at the final rankings of potential ADDs and potential DELs for the December 2024 index rebal event.
We do not expect any changes for the HSTECH index in December 2024. However, we expect there to be capping flows of US$1,079mn one-way.

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Oct 02

Daily Brief Event-Driven: Mar25 Nikkei 225 Rebal: Considering Fast Retailing Capping…. Again… and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Mar25 Nikkei 225 Rebal: Considering Fast Retailing Capping…. Again…
HSTECH Index Rebalance Preview: $800m Round-Trip Trade
Choi Family Launches a Counter Tender Offer for Young Poong Precision
HSCEI Index Rebalance Preview: High & Low Probability Changes
Choi Drops a Counter-Tender for Young Poong Precision at ₩30,000 Before the Market Bell Tomorrow
Namoi Cotton (NAM AU): Well Played LDC
Young Poong Precision (036560 KS): Choi’s Opening Salvo
ADNOC/Covestro: Fair Offer at €62

Mar25 Nikkei 225 Rebal: Considering Fast Retailing Capping…. Again…

At end-September, the Nikkei 225 semi-annual review imposed a “cap” on Fast Retailing (9983 JP) in the Average, applying a 0.9 coefficient to the Price Adjustment Factor.
At its current weight, Fast Retailing will be capped again in March 2025. If the stock outperforms Nikkei 225 by another 3% before 31 January 2025, it could be double-capped.
And an additional 16% would mean ¥1.1trln of sales in March. But like last time, this is a rubber band which stretches. Too far, and selling pressure is obvious.

HSTECH Index Rebalance Preview: $800m Round-Trip Trade

The review period for the December rebalance of the Hang Seng TECH Index (HSTECH INDEX) ended on 30 September.
We do not forecast any constituent changes for the index. Capping changes will lead to a one-way turnover of 2.15% and a round-trip trade of HK$6.1bn (US$785m).
If any stocks have outsized moves on expectations of being added to or deleted from the index, there could be opportunities to enter trades.

Choi Family Launches a Counter Tender Offer for Young Poong Precision

Choi family has launched a counter tender offer for Young Poong Precision at the tender offer price of 30,000 won (20% higher than MBK’s 25,000 won tender offer price).
The tender offer involves a plan to acquire 3,837,500 shares (24.36% of outstanding shares) of Young Poong Precision.
All eyes are on the court’s decision on the injunction application for ‘prohibition of acquisition of treasury stocks by Korea Zinc’, which is expected to be announced on 2 October.

HSCEI Index Rebalance Preview: High & Low Probability Changes

PICC Property & Casualty H (2328 HK) inclusion and Longfor Properties (960 HK) deletion are high probability changes for the Hang Seng China Enterprises Index (HSCEI INDEX) in December.
There is a lower probability of China Resources Power (836 HK) being added and of Sino Biopharmaceutical (1177 HK) being deleted at the rebalance.
There has been big short covering in PICC Property & Casualty (2328 HK) over the last couple of months while shorts would have covered Longfor Properties (960 HK) recently.

Choi Drops a Counter-Tender for Young Poong Precision at ₩30,000 Before the Market Bell Tomorrow

Choi aims to acquire 3.84 million shares (24.36%) of Young Poong Precision at ₩30,000 each, with a tender period from October 2 to November 1, managed by Hana Securities.
Seoul Economic Daily may not be as prominent, but they reliably scoop this type of news, making it likely Choi will announce their counter-tender for Young Poong Precision tomorrow.
MBK targets the full 49.14% stake, while the Choi family seeks about half, creating proration risk, which may still make MBK’s lower offer more appealing to shareholders.

Namoi Cotton (NAM AU): Well Played LDC

A$0.77/Share. That’s Louis Dreyfus Company (LDC)’s revised unconditional bid. Plus it now holds 47.66% after Samuel Terry Asset Management, Namoi’s largest shareholder, tendered into the revised term.
Expect Namoi Cotton Co Operative (NAM AU)‘s board to shortly back LDC’s Offer. LDC’s Offer is $0.02/share above Olam Agri’s conditional bid.
After LDC first approached Namoi in November last year, this is now done. Expect Olam to tender its stake, and fold its tent.

Young Poong Precision (036560 KS): Choi’s Opening Salvo

The Choi family have launched a Tender Offer to acquire 3.937mn shares (25%) of Young Poong Precision (036560 KS) (YPP) at ₩30,000/share, 20% above MBK/Young Poong (000670 KS)‘s revised terms.
YPP’s key attraction is its 1.85% stake in Korea Zinc (010130 KS), which is the ultimate prize in this tussle between the Choi and Jang families.
Choi’s Offer runs from today (2nd October) to 21 October. There is no minimum acceptance threshold. If successful, the Choi’s stake increases to 60.45% from 35.45% currently.

ADNOC/Covestro: Fair Offer at €62

At last, Covestro signed an Investment Agreement with ADNOC for an all-cash €62.00/share offer (same as June proposal), 54% premium to June 2023, €11.7 billion implied equity value..
The offer represents 9.1x EV/Fwd NTM EBITDA (vs. peers at 8.3x), 7.4x 26e EBITDA and 1.8x P/BVPS. The share price implies 6.4% gross spread and 66% probability of deal completion.
The agreement is well-crafted and now has a strong likelihood of reaching a successful completion, although there is a lengthy period before completion and likely political opposition. Long.

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Oct 01

Daily Brief Event-Driven: Itochu (8001 JP) Lowball TOB for Descente (8114) Is Here – Trades Tight But No Big Holder Appeared and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Itochu (8001 JP) Lowball TOB for Descente (8114) Is Here – Trades Tight But No Big Holder Appeared
T-Gaia (3738 JP) – Potential Premium Takeout Story Turns To An Ugly Takeunder
T-Gaia (3738 JP): Reality Check as Bain Launches a Takeunder
A/H Premium Tracker (To 27 Sep 2024): Hs Outperforming Explosive Chinese Stimulus
Quiddity JPX-Nikkei 400 Rebal 2025: End-Sep 2024 Ranks
NPS Cash Inflow Projections for KRX Value-Up Index & Surging Interest in KOSDAQ Stocks
Softbank (9984 JP) – Despite the High NAV Discount, We See Greater Headwinds; Downgrading to Neutral
Italian Savings Shares
Descente (8114 JP): Itochu’s (8001 JP) Tender Offer Launches
Shinsegae E&C (034300 KS)’s Delisting Offer

Itochu (8001 JP) Lowball TOB for Descente (8114) Is Here – Trades Tight But No Big Holder Appeared

Today, Itochu Corp (8001 JP) announced that it had received SAMR approval and would launch its Tender Offer to take private its affiliate, Descente Ltd (8114 JP).
As warned last year, Descente is cheap on a forward basis due to very strong growth and profitability of Descente China Holdings but Itochu can downplay that future.
And indeed, it appear they did, and unless someone takes them to task, this probably gets done. So far, nobody has.

T-Gaia (3738 JP) – Potential Premium Takeout Story Turns To An Ugly Takeunder

Today, just before the close, the Nikkei put out a scoop that Bain would buy T Gaia Corp (3738 JP) for ¥140bn. Sounds big. It was a 30% discount.
There is a three Tender Offer process whereby minorities, who could be squeezed out regardless, are offered the opportunity to block the deal by not tendering at ¥2,670.
This not-quite “majority of minority” of the super-minority is an interesting governance condition established by the Special Committee. It bears some study.

T-Gaia (3738 JP): Reality Check as Bain Launches a Takeunder

T Gaia Corp (3738 JP) disclosed a Bain tender offer at JPY2,670, a 35.9% premium to the undisturbed price but a 27.2% discount to the last close.
Bain has set the minimum number of shares to be purchased at a 12.67% ownership ratio to appease the Board, which has a neutral recommendation.
Bain hopes the offer’s harsh reality check will burst the share price bubble, nudging minorities to accept. An auction process suggests that the chance of a competing offer is low.

A/H Premium Tracker (To 27 Sep 2024): Hs Outperforming Explosive Chinese Stimulus

Everything changed this past week. China has launched major public stimulus programs which seem open-ended. They are less about money and more about greasing the wheels of risk.
It still requires that OTHER PEOPLE take risk. Shorts covered. New speculative longs made. Better financing but still the same recourse.
But everything is going up. And believe it or not, Hs are outperforming As. Broker and Bank Hs seem like the right place to be.

Quiddity JPX-Nikkei 400 Rebal 2025: End-Sep 2024 Ranks

JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents.
A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. We look at the potential forward inclusions and removals every month.
Below is a look at potential Inclusions and Removals for the JPX-Nikkei 400 Rebalance to come in August 2025 based on trading data as of end-September 2024.

NPS Cash Inflow Projections for KRX Value-Up Index & Surging Interest in KOSDAQ Stocks

NPS will likely use the KRX Value-Up Index as its benchmark, with Long-Term Growth and Value categories likely to adopt it.
When NPS shifts to the Value-Up Index, KOSDAQ stocks will likely drive significant flow impacts due to their lower overlap.
These non-overlapping KOSDAQ stocks, attracting over 1 trillion won, could see significant price impacts as funds gradually flow in.

Softbank (9984 JP) – Despite the High NAV Discount, We See Greater Headwinds; Downgrading to Neutral

By Victor Galliano

The SoftBank NAV discount is historically high, which makes it appear optically attractive; despite this, we turn neutral on SoftBank group from our previous positive recommendation, due to its headwinds
JPY strength is a key challenge, especially since the new Japanese prime minister supports the BoJ normalising monetary policy; this means BoJ tightening whilst many other central banks are easing
Arm Holdings’ super premium valuation versus its peers is another potential headwind for SoftBank group shares and NAV, combined with the high correlation between Arm Holdings and SoftBank group shares

Italian Savings Shares

Italian savings shares (azioni di risparmio) are non-voting stocks offering higher dividend yields. They prioritize income over governance influence, appealing to investors who prefer steady returns over company decision-making power.
Ordinary shares command higher prices due to voting rights and control, while preference shares are valued lower. In Italy, control is highly valued, thus a significant premium for ordinary shares.
Following mandatory conversions, the two remaining tradable situations are Danieli (whose mandatory October 2020 conversion seems postponed) and Telecom Italia, trading at a premium awaiting dividends in arrears.

Descente (8114 JP): Itochu’s (8001 JP) Tender Offer Launches

Descente Ltd (8114 JP) has announced that Itochu Corp (8001 JP)’s tender offer precondition has been satisfied. The offer terms are unchanged at JPY4,350 per share.
The offer is arguably light due to the peer re-rating and historical trading ranges. It is also below the midpoint of the special committee’s IFA DCF valuation range.
Nevertheless, the offer will likely succeed. There is no vocal opposition, the volume traded through terms is low, and the offer implies a premium multiple compared to peers.

Shinsegae E&C (034300 KS)’s Delisting Offer

Construction services play Shinsegae E&C (034300 KS) has announced a Tender Offer from E Mart (139480 KS) for 27.33% of shares out, at ₩18,300/share, a 14% premium to undisturbed.
E Mart holds 70.46% – and the company holds 2.21% in treasuries – therefore, E Mart requires ~22% of the remaining ~27% held by minorities to tender and force delisting.
Super clean deal. E Mart will acquire all shares tendered. The Offer kicks off today, and closes on the 29th October. There is no minimum tendering % condition.

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Sep 30

Daily Brief Event-Driven: Emart’s Tender Offer for Shinsegae Construction: Arb Trading Angles and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Emart’s Tender Offer for Shinsegae Construction: Arb Trading Angles
FujiSoft (9749) – Somewhat Inexplicable Renewed Opinion of Fairness on KKR Tender
Shin Kong (2888 TT) Deal – Activism, Proxy Advice, Proxy Fight, Voting Risk, and Discounts
Merger Arb Mondays (30 Sep) – Canvest, Henlius, CPMC, Xingda, Fuji Soft, Capitol, Dyna-Mac
Tokyo Metro (9023 JP) IPO: TPX Inclusion in November; Global Indices: One in October, One in Feb
FnGuide Semiconductor Top10 Index Rebalance Preview: Wonik IPS to Replace ISC
China Healthcare Weekly (Sep29)- Henlius Privatization Update, NHSA Fee Control, Hansoh Is Exception
EQD / NSE Vol Update / Vols Bogged Down by Holiday Shortened Week in Spite of Upcoming Event Risks
Tender Offer and Taking Private of Shinsegae E&C by E Mart
Nippon Steel/US Steel: Appealing Expected Value

Emart’s Tender Offer for Shinsegae Construction: Arb Trading Angles

E Mart Inc is launching a tender offer for 27.33% of Shinsegae Eng & Construction, offering ₩18,300 per share, a 14% premium, from September 30 to October 29.
This tender’s got zero cancellation or proration risk since they’re all in to buy every share tendered. That makes it a prime event for close spread tracking and trading opportunities.
Emart needs 95% of Shinsegae Construction’s shares to delist, requiring 22% of the remaining 27%. If they can’t get it, a stock swap with Emart shares is likely.

FujiSoft (9749) – Somewhat Inexplicable Renewed Opinion of Fairness on KKR Tender

On the 19th of September, KKR amended the terms and Scheme/Structure of its Tender Offer for Fuji Soft Inc (9749 JP). I thought the new terms coercive.
On the 26th, FujiSoft decided there had been no change detrimental to general shareholders. On the 27th, KKR amended the Tender Offer Registration Statement to reflect FSI’s revised Opinion.
That means Bain needs to change FSI’s mind or come out with a big number before the end of the First Tender, leaving lots of stock for Round Two.

Shin Kong (2888 TT) Deal – Activism, Proxy Advice, Proxy Fight, Voting Risk, and Discounts

Taishin Financial Holding (2887 TT) has raised its bid for Shin Kong Financial Holding (2888 TT) and CTBC Financial Holding (2891 TT) has dropped its bid after FSC rejection.
Shin Kong’s Board approved the revised (25% higher) Taishin bid. Shares in Shin Kong fell sharply on the FSC rejection of the CTBC bid.
Taishin’s bid clearly has governance/related party issues and a significant portion of the “non-Taishin” reps on the Shin Kong Board had issues. October 9th passage is not a done deal.

Merger Arb Mondays (30 Sep) – Canvest, Henlius, CPMC, Xingda, Fuji Soft, Capitol, Dyna-Mac

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: Canvest Environmental Protection Group (1381 HK), Greatview Aseptic Packaging (468 HK), Shanghai Henlius Biotech (2696 HK), Shinko Electric Industries (6967 JP), China Traditional Chinese Medicine (570 HK).
Lowest spreads: Dyna Mac Holdings (DMHL SP), Seven & I Holdings (3382 JP), Trancom Co Ltd (9058 JP), Fuji Soft Inc (9749 JP), Descente Ltd (8114 JP).

Tokyo Metro (9023 JP) IPO: TPX Inclusion in November; Global Indices: One in October, One in Feb

Tokyo Metro (9023 JP)‘s listing has been approved by the JPX and the stock is expected to start trading on the Prime Market from 23 October.
At the reported indicative IPO price of JPY 1100/share, Tokyo Metro (9023 JP) will be valued at JPY 639.1bn (US$4.49bn).
The stock should be added to one global index on 29 October, to the TOPIX INDEX on 28 November, while another global index inclusion will need to wait till February.

FnGuide Semiconductor Top10 Index Rebalance Preview: Wonik IPS to Replace ISC

Today is the last trading day in the review period for the October rebalance of the FnGuide Semiconductor Top10 Index.
Wonik Ips (240810 KS) is a high probability add and ISC Co Ltd (095340 KS) is a high probability delete. This will reverse the changes from the April rebalance.
Passive trackers will need to buy over 3.5x ADV in Wonik Ips (240810 KS) and sell nearly 2x ADV in ISC Co Ltd (095340 KS).

China Healthcare Weekly (Sep29)- Henlius Privatization Update, NHSA Fee Control, Hansoh Is Exception

By Xinyao (Criss) Wang

The medical insurance statistics reflected that medical insurance funds are facing increasing pressure. If income/expenditure maintain average growth rates in recent years, there would be a deficit state in 2024.
Due to increasing pressure on medical insurance fund, the entire process of innovative drug evaluation/NRDL negotiation this year will be more strictly enforced, but Hansoh (3692 HK) is an exception.
For Henlius’ privatization, completing Pre-Conditions in 24Q4 looks tight. Considering Chinese New Year holiday, the privatization may not be completed until at least mid-to-late February 2025.The deal will get up.

EQD / NSE Vol Update / Vols Bogged Down by Holiday Shortened Week in Spite of Upcoming Event Risks

By Sankalp Singh

Nifty50 IVs have finally cracked below 11.0% levels – in spite of upcoming event-risks. Moves lower have been exacerbated by the holiday shortened week.
Vol-Regime Model has switched to “Low & Down” vol-state in Nifty50. Tactical implications: Short Vega exposure less favourable going forward.
Risk premia selloff has driven Vol Term-Structure deeper into Contango. Smile & Skew characteristics have compressed in congruence with lower IVs.

Tender Offer and Taking Private of Shinsegae E&C by E Mart

E Mart Inc (139480 KS) is conducting a tender offer of 27.33% of Shinsegae Eng & Construction (034300 KS) (2,126,611 shares) and trying to take the company private afterwards.
The tender offer price is 18,300 won, which is 14% higher than the closing price on Friday (27 September).
Tender offer is likely to result in higher price of Shinsegae E&C in the near term but it could be difficult for E Mart to take it private this year.

Nippon Steel/US Steel: Appealing Expected Value

On September 26, Nippon Steel’s president affirmed the company’s commitment to completing the United States Steel (X US) acquisition by year-end, despite the CFIUS review being extended until December.
U.S. Steel, with an expected value of $45.19/share offers 27% upside potential. This discount, driven by acquisition/fundamental value, supports a buy recommendation thus, I would be long U.S. Steel.
If the deal were to succeed, the likelihood of it closing before the end of 2024 is low, primarily due to the complexities surrounding the American presidential elections.

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Sep 29

Daily Brief Event-Driven: (Mostly) Asia-Pac M&A: Dyna Mac and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

(Mostly) Asia-Pac M&A: Dyna Mac, Platinum Asset, Fuji Soft, JTower, Arvida, Korea Zinc, Sun Art
Sun Art Retail (6808 HK): Alibaba’s Stake Draws PE Interest
Last Week in Event SPACE: DFI/JD.com/Yonghui, Alibaba/Sun Art, New World Development, Austal
Kum Yang: Rights Offering Capital Raise of 450 Billion Won
Quiddity Leaderboard TDIV Dec 24: 5 ADDs/4 DELs Likely; US$1.38bn One-Way
Quiddity Leaderboard T50/100 Dec 24: An Alternate Possibility for Formosa Sumco TDIV Deletion

(Mostly) Asia-Pac M&A: Dyna Mac, Platinum Asset, Fuji Soft, JTower, Arvida, Korea Zinc, Sun Art

I tally 39 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
Two new deals discussed on Smartkarma this week: Xingda International (1899 HK) and NSL Ltd (NSL SP). Sun Art Retail (6808 HK) also susppended due to the Takeovers Code.
Key updates took place on: Dyna Mac Holdings (DMHL SP), Platinum Asset Management (PTM AU), Fuji Soft (9749 JP), JTower (4485 JP), Arvida (ARV NZ), and Korea Zinc (010130 KS).

Sun Art Retail (6808 HK): Alibaba’s Stake Draws PE Interest

Sun Art Retail (6808 HK) entered a trading halt under the Code on Takeovers and Mergers. Bloomberg suggests Alibaba Group Holding (BABA US)’s stake is attracting preliminary interest from PE.
Alibaba built its 78.70% stake through two purchases in 2017 (HK$6.50) and 2021 (HK$8.10). An exit would align with the strategy to focus on the core business segments.
The recent Miniso-Yonghui transaction could have prompted PE to act. An offer at book value would imply HK$2.50, a 40% premium to the last close price.

Last Week in Event SPACE: DFI/JD.com/Yonghui, Alibaba/Sun Art, New World Development, Austal

Hypermarket reshuffles as JD.com (9618 HK) and DFI Retail (DFI SP) exit Yonghui Superstores (601933 CH); and Alibaba Group (9988 HK) potentially exits Sun Art Retail (6808 HK).
Evidently the influence of a younger hip third-generation tycoon-scion wasn’t the panacea for New World Development (17 HK) and its ongoing issues in the HK/China property space.
MBK bumps the Tender Offer prices for Korea Zinc (010130 KS) by 13.6% to ₩750,000 and Young Poong Precision (036560 KS) by 25% to ₩25,000. What with the Choi’s do?

Kum Yang: Rights Offering Capital Raise of 450 Billion Won

Kum Yang announced a rights offering capital raise of 450 billion won which will be used for facility investments and debt repayment.
The estimated rights offering price is 38,950 won, which is 31% lower than current price (56,500 won).
We remain negative on Kum Yang. Despite the sharply lower rights offering price relative to current price, we would avoid the rights offering.

Quiddity Leaderboard TDIV Dec 24: 5 ADDs/4 DELs Likely; US$1.38bn One-Way

In this insight, we take look at Quiddity’s expectations for index changes and capping flows for the TDIV Index for the December 2024 index rebal event.
I currently see 5 ADDs and 4 DELs but there are several names close to the border and expectations could change before the base date as prices move around.
The current estimate for one-way flow in December 2024 is US$1.38bn.

Quiddity Leaderboard T50/100 Dec 24: An Alternate Possibility for Formosa Sumco TDIV Deletion

The T50 index represents the top 50 largest stocks by market capitalization in the Taiwan Stock Exchange (TWSE). The T100 index represents the next 100 largest names (51-150 ranks).
In this insight, we take a look at the potential ADDs and DELs for the December 2024 index rebal event.
Currently, we see one change for T50 and one change for T100 but there are two more months to the base date and our expectations can change until then.

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Sep 28

Daily Brief Event-Driven: Sun Art Retail (6808 HK): COFCO Offer? and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Sun Art Retail (6808 HK): COFCO Offer?
Latest Forecast for Korea Zinc’s Tendering Rate
Commerzbank Enters Talks with Unicredit
Hana Financial (086790 KS); Error of Omission from the Value-Up Index?
EQD | The Nikkei At The Top

Sun Art Retail (6808 HK): COFCO Offer?

Alibaba Group Holding (9988 HK)-backed hypermarket play Sun Art Retail (6808) is currently suspended pursuant to the Takeovers Code.
Reportedly, SASAC-backed COFCO Group may acquire Alibaba’s 78.7% stake. Sun Art’s shares are up 45% since the middle of the month.
Alibaba exiting – if true – follows JD.com (9618 HK) (and DFI Retail Group Holdings (DFI SP)) selling their respective stakes in Yonghui Superstores Co., (601933 CH) earlier this week.

Latest Forecast for Korea Zinc’s Tendering Rate

Overseas institutions might tender around 4%, locals about 6%, giving a realistic max of 10%. MBK may struggle to even reach that minimum of 7%.
Mirae Asset and Samsung Life, holding the largest portion of the targetable stakes, hinted they’ll participate in the tender but won’t tender all their shares.
Allocation risk for the tender is minimal, but cancellation risk remains. MBK may barely exceed the 7% minimum, making predictions tough and reducing chances of a post-tender stock price drop.

Commerzbank Enters Talks with Unicredit

Commerzbank’s incoming CEO Bettina Orlopp announced talks with UniCredit on September 27 regarding a potential merger. Despite opposition from management and Chancellor Scholz, some investors support the discussions.
Since UniCredit’s entry into Commerzbank on September 10, Commerzbank’s stock has surged 30%, outperforming UniCredit’s 9.2% rise and the European banking sector’s 6.3% gain.
Buying Commerzbank is strategically and financially logical. In conclusion, I maintain my recommendation to buy Commerzbank speculatively.

Hana Financial (086790 KS); Error of Omission from the Value-Up Index?

By Victor Galliano

Hana Financial, along with KB Financial did not make the cut for the Korea Value-up index announced on the 24th September; Hana apparently fell short of the PBV ratio threshold
Despite being excluded from the Value-up Index, Hana remains our core South Korean bank pick for its attractive valuations, low PEG, solid core capital ratio and strong credit quality credentials
We believe Hana stands out positively on fundamentals and return trends versus its peers, and there is also potential for its inclusion in a planned rebalancing scheduled in December

EQD | The Nikkei At The Top

By Nico Rosti

The last 2 weeks’ upswing in the Nikkei 225 INDEX does not change our view: it is WEEKLY overbought and October is a coin flip according to our seasonal models.
The index could rise further at this point, herd behavior may force investors to pile up into the rally, but our models say rising well past 40k will be hard.
A pullback is not necessarily a great occasion to buy, as already explained in our previous insight, the N225’s trend does not look good, at the moment.

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Sep 27

Daily Brief Event-Driven: Fuji Soft (9749) – Possible Issues with New KKR Amended Terms and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Fuji Soft (9749) – Possible Issues with New KKR Amended Terms
Lowdown from KRX’s Emergency Presser on the Value-Up Index Today
A Special Rebalancing Of Korea Value-Up Index Is Likely in December 2024
Fuji Soft (9749 JP): KKR on the Home Stretch as Bain Dithers
Nasdaq-100 December 2024 Forecasts: Monolithic Power & AppLovin It; Dollar Tree Needs Watering
Quiddity Leaderboard SET50 Dec 24: 3 Changes Likely; Some Changes to Expectations
Quiddity Leaderboard S&P 500 Dec 24: Two ADDs (One Biggie), Two DELs, Possible Big Intrareview Moves
K Bank IPO (279570 KS): Index Inclusion Timeline
Quiddity Leaderboard ASX Dec 24: Three Changes Possible; New Long-Short Ideas
Prosus X Naspers: Discounts Catch Bid on China Stimulus, Trip.com Stake Fully Exited

Fuji Soft (9749) – Possible Issues with New KKR Amended Terms

On 8 August, KKR and Fuji Soft Inc (9749 JP) announced a Tender Offer for the company. It was, at the time, an intention to do so. KKR needed approvals.
Fuji Soft had KKR terms, and timing, and approved them. KKR then changed the terms and timing. Now on the 19th, they changed the terms again.
This puts Fuji Soft in a kind of quandary. It’s important to think about why and what that leads to.

Lowdown from KRX’s Emergency Presser on the Value-Up Index Today

KRX faces challenges balancing the Value-Up Index as a benchmark while ensuring real disclosures, but passive inflows remain steady with local pension funds still interested.
KRX’s potential December mini rebalancing increases uncertainty but may just lead to minor tweaks, adding KB and Hana while removing a few stocks from Communication Services.
The Value-Up Index resembles the KOSPI 200, using 30-40% GICS stocks and KOSDAQ 150, which may spark trading strategies focused on performance gaps within sectors.

A Special Rebalancing Of Korea Value-Up Index Is Likely in December 2024

On 26 September, the Korea Exchange announced that it is considering a “special rebalancing” of the Korea Value-Up Index in December 2024.
In our view, the probability of this special rebalancing occurring by the end of this year is high at about 85%+.
If there is a special rebalancing, KB Financial, Hana Financial, Samsung Life Insurance, SK Telecom, and KT could be considered the top candidates for inclusion.

Fuji Soft (9749 JP): KKR on the Home Stretch as Bain Dithers

The Fuji Soft Inc (9749 JP) Board has recommended KKR’s first tender offer (JPY8,800). The Board will announce its view on the second tender offer on launch.
The Board sounded out Bain’s progress on a binding proposal and 3D and Farallon’s on their irrevocable. The absence of a Bain binding proposal immensely helped the Board’s decision.
Bain has likely left it too late. With a higher offer, Bain could force a recommendation change and hope KKR is shamed into cancelling 3D and Farallon’s irrevocable.

Nasdaq-100 December 2024 Forecasts: Monolithic Power & AppLovin It; Dollar Tree Needs Watering

By Dimitris Ioannidis

Monolithic Power Systems (MPWR US) is a direct addition followed by AppLovin (APP US) which is a conditional addition but close to be direct. Demand is ~$1.8bn and ~3.5 ADV.
Dollar Tree Inc (DLTR US) is a direct deletion with the highest exclusion probability as it is ranked above the exit rank of 125.
Super Micro Computer (SMCI US) , ARM Holdings (ARM US) and Moderna (MRNA US) are amongst the prioritized constituents preventing eligible candidates from entering the index.

Quiddity Leaderboard SET50 Dec 24: 3 Changes Likely; Some Changes to Expectations

The SET50 index tracks the performance of the top 50 largest and most liquid names listed on the Stock Exchange of Thailand (SET).
In this insight, we take a look at the potential ADDs/DELs for SET 50 during the index rebal event in December 2024.
Currently, we see 3 expected ADDs/DELs and given that the 3-month reference period used for average market cap rankings have now started the rankings may be more stable.

Quiddity Leaderboard S&P 500 Dec 24: Two ADDs (One Biggie), Two DELs, Possible Big Intrareview Moves

The S&P 500 index tracks the 500 largest names listed in the US and it is one of the most highly-tracked indices in the world.
In this insight, we take a look at the upcoming constituent changes in the run up to the December 2024 index rebal event.
We expect two regular changes in December 2024. There are also several live spin-off and M&A events which could trigger intra-review index changes in the late-2024/early-2025.

K Bank IPO (279570 KS): Index Inclusion Timeline

K Bank (279570 KS) is looking to raise up to KRW 984bn (US$738m), valuing the company at KRW 5tn (US$3.75bn) at the top end of the IPO price range.
Close peer KakaoBank (323410 KS) and regional peer SBI Sumishin Net Bank (7163 JP) have been trading lower recently and the IPO could price lower than the top end.
The change in KOSPI2 INDEX Fast Entry rules will leave the stock out of the index till June 2025. Inclusion in global indices will have to wait a while too.

Quiddity Leaderboard ASX Dec 24: Three Changes Possible; New Long-Short Ideas

In this insight, we take a look at the potential index changes for ASX200, 100, 50, and 20 in the run-up to the December 2024 index rebal event.
We currently do not see any index changes for ASX 20 and ASX 100.
We see one change for ASX 100 and two changes for ASX 200 but the final result could depend on relative share price movements for the next two months.

Prosus X Naspers: Discounts Catch Bid on China Stimulus, Trip.com Stake Fully Exited

By Charlotte van Tiddens, CFA

On Tuesday, China announced fresh stimulus measures targeting the stock market and property sector.
The PBoC reduced the main policy rate and cut the RRR, signaling that further cuts were on the cards for later this year.
Further stimulus measures were announced today ahead of the Golden Week holiday. The discounts of Naspers and Prosus have rallied on the news, we see room for further upside.

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Sep 26

Daily Brief Event-Driven: Crunching Passive Impact Numbers for KRX Value-Up Index Names and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Crunching Passive Impact Numbers for KRX Value-Up Index Names, Based on KRX’s Free-Float Rate Data
MBK Raises Tender Prices: ₩750,000 for Korea Zinc & ₩25,000 for Young Poong Precision
MBK Raises Tender Offer Price on Korea Zinc by 13.6% to 750,000 Won
Tohokushinsha (2329 JP) To 3D – “Not Today”; 3D May Go To The Mattresses
DFI Exits Yonghui, MINISO Enters: Who Got The Short End Of The Stick?
Capitol Health (CAJ AU)/Integral Diagnostics (IDX AU): 31st Oct Merger Vote
NIFTY Indices: Flows (Post Capping) At the Close Tomorrow; Round-Trip US$3.3bn
Unicredit Is Moving Fast
MBK Bumps Offers For Both Korea Zinc and Young Poong Precision

Crunching Passive Impact Numbers for KRX Value-Up Index Names, Based on KRX’s Free-Float Rate Data

KRX 300 hit 1 trillion won AUM fast, but with local pensions more aggressive, the value-up’s early AUM could top 1 trillion, hitting up to 3 trillion in six months.
Hanjin KAL, S1 Corp, Hyundai Elevator, Nice Info, and Huchems are set for strong price action. The financial sector also stands out, seeing the biggest impact compared to other sectors.
Small caps under 1 trillion won see little passive impact, but solid plays exist under 3 trillion, so splitting large and small caps won’t limit target options much.

MBK Raises Tender Prices: ₩750,000 for Korea Zinc & ₩25,000 for Young Poong Precision

Hankyung reports MBK will raise Korea Zinc’s tender offer to ₩750,000 (14%) and Young Poong Precision’s to ₩25,000 (25%) before today’s market opens.
Hankyung and Maeil are top sources for market scoops, so it’s almost certain MBK leaked the tender price hike ahead of today’s trading.
MBK leaves Choi just five trading days to respond. Korea Zinc plans to raise ₩400 billion, but it’s still not enough for a counter-bid.

MBK Raises Tender Offer Price on Korea Zinc by 13.6% to 750,000 Won

MBK announced that it will raise the tender offer prices on Korea Zinc by 13.6% to 750,000 won and Young Poong Precision by 25% to 25,000 won.
If 100% of the 3,024,881 shares of Korea Zinc tender offer is completed, at the revised tender offer price of 750,000 won, this would be 2.27 trillion won in amount.
In term of probabilities, we would put a 80-85% probability that MBK/Jang family successfully completes the tender offers and takes over the controlling stakes of these two companies.

Tohokushinsha (2329 JP) To 3D – “Not Today”; 3D May Go To The Mattresses

3D Investment Partners bought 5% of Tohokushinsha Film (2329 JP) by Mar-2023. A year later they had 17+%. 3D proposed changes. In July, 3D proposed a takeover, asking for DD.
Tohokushinsha responded to the proposals, then offered due diligence to 3D based on terms set by a Special Committee. 3D did not want those strict DD terms.
Yesterday, Tohokushinsha said “Fine.” The stock today fell 10% today. This is not a stalemate, but it means 3D may start to play harder.

DFI Exits Yonghui, MINISO Enters: Who Got The Short End Of The Stick?

Low-Cost retailer MINISO (9896 HK) has entered into SPAs to acquire a 29.4% stake in supermarket chain Yonghui (601933 CH) from DFI (DFI SP) and two units of JD.com (9618 HK).
Upon the completion of this US$890mn transaction, which is subject to regulatory and shareholder approvals, MINISO would become Yonghui’s largest shareholder. And DFI would exit its entire stake.
Ye Guofu, MINISO’s founder/chairman, views the transaction “With a brave heart, start a new world!”. Yonghui has been spilling red ink since FY21. Perhaps “brave soul” is more apt.

Capitol Health (CAJ AU)/Integral Diagnostics (IDX AU): 31st Oct Merger Vote

On the 18th July, diagnostic imaging provider Capitol Health (CAJ AU) entered a Scheme with Integral Diagnostics (IDX AU). IDX will issue 0.12849 new IDX shares for each Capitol share
Upon completing the transaction, Integral would hold ~63% in the MergeCo. They key risk is the ACCC signing off. A decision is expected on (or around) the 28th November.
The Scheme Booklet is now out, with a Scheme Meeting to be held on the 31st October. Expected implementation on the 14th November. The IE says fair & reasonable.

NIFTY Indices: Flows (Post Capping) At the Close Tomorrow; Round-Trip US$3.3bn

The NIFTY Index, Nifty Next 50 Index, NSE Nifty Bank Index, CNXIT Index, Nifty Midcap 150 Index, Nifty100 Low Volatility30 Index and the CPSE ETF rebalance at the close tomorrow.
The round-trip trade across the indices is US$3.3bn and there are 13 stocks with over 1 day of ADV to trade from passive trackers.
Stocks with the largest inflows are Trent, Bharat Electronics, Canara Bank, Bharat Heavy Electricals, Oil & Natural Gas Corp, Coal India, Hindustan Aeronautics and InterGlobe Aviation.

Unicredit Is Moving Fast

UniCredit SpA (UCG IM) has raised its Commerzbank AG (CBK GR) stake to 21%; Chancellor Scholz called it “hostile takeover”. UniCredit also filed to increase its stake up to 29.9%.
Commerzbank’s valuation multiples remain attractive, as despite a 21.3% rise in its stock, it still trades at a price-to-book ratio (P/B) of just 0.57x, compared to UniCredit’s 0.98x.
The conditions remain favorable for a potential premium acquisition by UniCredit, as acquiring Commerzbank makes both strategic and financial sense. Thus I recommend to buy Commerzbank speculatively.

MBK Bumps Offers For Both Korea Zinc and Young Poong Precision

MBK Partners has increased the Tender Offer prices for Korea Zinc (010130 KS) by 13.6% to ₩750,000 and Young Poong Precision (036560 KS) by 25% to ₩25,000.
All other terms remain the same. IF MBK secures the maximum 14.61% in KZ, this will be Korea’s largest-ever Tender Offer.
MBK made a public offering correction announcement today. The Choi family now has 5 business days in which to respond with a counteroffer.

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Sep 25

Daily Brief Event-Driven: All the Scoop on the Korea Value-Up Index and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

All the Scoop on the Korea Value-Up Index
Korea Exchange Announces The Korea Value Up Index
China’s [Maybe] Biggish [Quasi?] Bazooka
Tech: Japan’s Biggest IPO in 6 Years, Kioxia, Is Off. Here Is the Likely Reason
Xingda (1899 HK): No Premium Voluntary Conditional Offer to Ward off a Hostile Holder
Silverlake Axis (SILV SP): Circular Now Out. IFA Says Fair
Capitol Health (CAJ AU): ACCC Overhang as Scheme Meeting Set for 31 October
Xingda (1899 HK)’s HK$1.30/Share Offer – Say What?
MINISO Bets Big on Yonghui. Should Investors Be Concerned About the Acquisition?
EQD | A Very Weak KOSPI 200 Is Ready to Pull Back Again

All the Scoop on the Korea Value-Up Index

The index focuses on qualitative factors like capital efficiency and shareholder returns, but efforts to impose sector balance may have overextended its market benchmark role.
Some companies not fitting the ‘value-up’ narrative got included, while market favorites were sidelined by sector rankings, which is puzzling given the index’s original goal.
Still, with rebalancing cut down to once a year, we should expect the flow impact on the index names to hit harder than initially thought compared to their sector peers.

Korea Exchange Announces The Korea Value Up Index

Korea Exchange announced the long awaited Korea Value Up Index (“K Value Up Index”) (composed of 100 stocks) today.
Korea Exchange used a 5-step screening process to select the 100 companies in this index including market cap, profitability, shareholder returns, market evaluation, and capital efficiency.
This Value Up index is part of the bigger “Corporate Value Up ” program in Korea. These efforts to improve Korea’s corporate governance policies is a marathon, not a sprint.

China’s [Maybe] Biggish [Quasi?] Bazooka

Today, in a press conference held jointly by the Governor of the PBOC, the Director of the Financial Regulatory Bureau, and Chairman of the CSRC, China announced market stimulus measures.
The PBOC will cut RRR 50bp, the 7-day repo rate 20bp, guide effective mortgage rate cuts, and lower minimum down payments on second homes. There are other commercial RE measures.
Three major stock market measures were announced. A RMB500bn collateral swap programme, PBOC backing RMB300bn bank loans for corps to buy stocks, and a Plan to increase Central Huijin investments.

Tech: Japan’s Biggest IPO in 6 Years, Kioxia, Is Off. Here Is the Likely Reason

By Neil Campling

Significant peer price performance declines leaves IPO valuation stretched, the desired discount multiple to attract interest has suddenly become a premium
Investor interest in memory semiconductors, AI derivative stocks has cooled
Peer price sell-offs are extreme but could quickly change, reflecting the highly cyclical nature of the sector

Xingda (1899 HK): No Premium Voluntary Conditional Offer to Ward off a Hostile Holder

Xingda International (1899 HK) has disclosed a voluntary conditional offer from Mr Liu Jinlan (Chairman) at HK$1.30 per share, which aligns with the last close price.
The offer is conditional on the offeror and concert parties representing more than 50% of voting rights. The offeror and concert parties represent 37.03% of voting rights.
The offer is a reaction to Mr Zhao Yue’s “hostile” emergence as a substantial shareholder. It is unattractive and will require a bump to satisfy the minimum acceptance condition.

Silverlake Axis (SILV SP): Circular Now Out. IFA Says Fair

On the 26 August, Goh Peng Ooi, founder and executive chair, made a voluntary unconditional general Offer for the 25.9% in Silverlake Axis (SILV SP) not held.
The Offer Doc for this S$0.36/share cash Offer was dispatched on the 26th August. The Circular is also now out, which incorporates the IFA opinion.
Trading through terms. The first close is the 7th October. I don’t expect a bump, and the share price gradually retraces back to cash terms.

Capitol Health (CAJ AU): ACCC Overhang as Scheme Meeting Set for 31 October

The Capitol Health (CAJ AU) IE considers Integral Diagnostics (IDX AU)’s merger proposal (0.12849 Integral shares per Capitol share) fair and reasonable.
While ACCC informal clearance is an overhang, the evidence suggests that clearance should be secured. The shareholder vote risk is low.
The offer terms are attractive. At the last close and for the 14 November payment, the gross/annualised spread is 4.7%/37.3%.

Xingda (1899 HK)’s HK$1.30/Share Offer – Say What?