Event-Driven

Post market close yesterday it was announced that GQG Partners (GQG AU) had invested INR 154.46bn (US$1.87bn) in four Adani Group companies via block deals.
The blocks were at a discount of 4.3% for Adani Ports & Special Economic Zone (ADSEZ IN) to 12.2% for Adani Enterprises (ADE IN).
There will be an increase in the free float for some Adani Group companies as a result of the blocks and there are implications for the stocks in indexes.

MBK & Unison Capital Trying to Take Osstem Implant Private: “Two Yards to Endzone”

MBK Partners and Unison Capital are trying to take Osstem Implant (048260 KS) private. Currently, it is estimated that the MBK/Unison consortium has secured 88.7% stake in Osstem Implant.
In the case of companies listed in KOSDAQ, if you have a stake of 90% or more, the company can generally proceed with discussions on delisting with the exchange.
There is a high probability of delisting sometime in March/April under two different scenarios. The second scenario offers the remaining minority shareholders and arb traders potential for further alpha creation.

SHL Japan (4327 JP) Takeover – Illiquid, Easy, Non-Transparent, but a Done Deal

The parent company of SHL Japan Ltd (4327 JP)‘s largest shareholder is buying out its main customer in Japan.
This is an LBO/MBO situation, and friends and family get it to 63% or so. A tiny sliver from others gets it over the hump.
Should get done easily, but the corporate governance here is not encouraging. Yes, a premium, but no explanation, and it’s a bit low.

SIAS Agrees The Widjaja Family’s Offer For Golden Energy Is Low-Balled

The Widjaja family’s Offer for Golden Energy (GER SP) back in November has been derided in the press, one outspoken minority shareholder, and (a loosely veiled statement) by Singapore RegCo.
Now the Securities Investors Association (Singapore) (SIAS) has thrown its hat into the ring and has called on GEAR to improve the Offer for shareholders.
The long stop date was surprisingly pushed back five months to satisfy the Exit offer conditions. This delay should avail the family of ample time to bump terms.

IMM PE Lanches A Tender Offer on Hanssem

IMM private equity fund launched a tender offer on Hanssem Co Ltd (009240 KS) and its share price surged by 19.7% to reach 53,700 won today.
IMM is currently the largest shareholder in Hanssem with a 27.7% stake in the company. IMM’s stake in Hanssem will rise to about 36% if this tender offer is successful.
Hanssem’s share price still 2.4% below the tender offer price of 55,000 won. In the coming days, we believe the share price will reach closer to the tender offer price.

Nitro Software Backs Potentia’s Offer

As expected, Nitro Software Ltd (NTO AU)‘s board has unanimously backed Potentia’s three-tiered revised Offer.
On the 23rd of February, Potentia bumped with a $2.17/share unconditional Offer, increasing to $2.20 if they get to 75% interest, and $2.25 if ≥25% tendering opt for scrip.
Where does this leave Alludo? Nitro reckons Alludo can’t raise their offer because of ASIC’s Truth In Takeovers policy. But Alludo do pocket the A$5mn break fee for their troubles.

SE600 Mar 23 Rebal: Final Changes and Historical Performance Analysis

The March 2023 regular rebalance index changes for the SE600 index and the EUROSTX index were announced yesterday.
There are 8 ADDs/DELs for the SE600 index and 5 ADDs and 2 DELs for the EUROSTX index.
In this insight, we take a closer look at the index flow expectations and the historical performance of SE600 and EUROSTX Rebalance events.

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Mar 02

Daily Brief Event-Driven: China Vanke (2202 HK): Placement & Index Flows and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

China Vanke (2202 HK): Placement & Index Flows
HKBN Ltd (1310 HK) Mulls I Square’s HGC Offer
SET50 Index Rebalance: SAWAD Added; Buying at the Close Today
SHL-Japan (4327 JP): JPY3,550 Tender Offer from SHL Group
Sweden’s EQT to Acquire a 68% Stake in SK Shieldus – Positive Impact on SK Square
Downer EDI: In Need Of A “Culture Reset”
Quiddity Final Predictions for UK F100/250 March 2023 Regular Review & Other Intra-Review Changes
Appreciate Group/Paypoint: Completion
Selected European Holdcos and DLC: February‘23 Report

China Vanke (2202 HK): Placement & Index Flows

News reports indicate that China Vanke (H) (2202 HK) is looking to place 300m shares at a price range of HK$12.93-13.20/share to raise around US$500m.
The 300m shares is nearly 33 days of ADV, but around 11-12% of the new shares will be bought by passive trackers early next week and provide near-term support.
China Vanke (H) (2202 HK) trades cheaper than its peers on EV/Sales, EV/EBITDA and forward PE. Shorts have ticked higher in the last couple of weeks.

HKBN Ltd (1310 HK) Mulls I Square’s HGC Offer

Reportedly (Bloomberg) Hong Kong broadband play HKBN Ltd (1310 HK) has received a takeover offer from I Square’s HGC Global Communications.
HKBN’s shares were halted in the late afternoon trading session yesterday after gaining 11.6%. The reason stated for the suspension was “possible inside information“, not pursuant to the Takeovers Code.
Last May, Bloomberg reported that KKR, PAG, and Stonepeak – amongst others – were considering bids for HKBN. The market cap at the time was US$1.6bn versus US$934mn now.

SET50 Index Rebalance: SAWAD Added; Buying at the Close Today

Srisawad Power 1979 (SAWAD TB) has been added to the SET50 INDEX following the Total Access Communication (DTAC TB) / True Corp Pcl (TRUE TB) merger.
Passive SET50 INDEX trackers will need to buy 9.7m shares (THB 534m; 1x ADV) of Srisawad Power 1979 (SAWAD TB) at the close of trading today.
There could be two more changes in June with relatively new listings, Thai Life Insurance (TLI TB) and Betagro (BTG TB), being added to the SET50 INDEX.

SHL-Japan (4327 JP): JPY3,550 Tender Offer from SHL Group

SHL Japan Ltd (4327 JP) has recommended SHL Group’s tender offer of JPY3,550 per share, a 32.2% premium to the undisturbed price (1 March).
The transaction is a two-step acquisition through a cash tender offer and subsequent squeeze-out. The lower limit of the tender offer is set at a 36.62% ownership ratio.
Achieving the minimum 36.62% ownership ratio requires a 32% acceptance rate from minorities excluding irrevocables. This is not onerous as the tender price represents an all-time share price.

Sweden’s EQT to Acquire a 68% Stake in SK Shieldus – Positive Impact on SK Square

On 1 March, it was announced that Sweden’s EQT will be acquiring a 68% controlling stake in SK Shieldus (393820 KS).
EQT Partners is controlled by Sweden’s powerful Wallenberg family. EQT will invest a total amount of 2 trillion won (US$1.5 billion) in SK Shieldus.
Our NAV analysis of SK Square suggests NAV of 7.9 trillion won or NAV per share of 55,507, representing a 45% upside from current levels.

Downer EDI: In Need Of A “Culture Reset”

As per Downer (DOW AU)‘s website: “Our purpose is to create and sustain the modern environment by building trusted relationships with our customers“. They should extend that trust to shareholders.
Having already announced accounting irregularities back in December, Downer further cut profit forecasts – and interim dividend – this week. After shares cratered 24%, Downer’s CFO promptly tendered his resignation.
Allan Grey, which holds 6% in Downer, reckons the company has been inept and that a “culture reset” was in order.

Quiddity Final Predictions for UK F100/250 March 2023 Regular Review & Other Intra-Review Changes

In this insight, we take a look at Quiddity’s final predictions for index changes for UK’s F100 and F250 indices for the March 2023 Rebalance.
The index changes are likely to be confirmed after market close today and there could be more intra-review changes later this month.
In this insight, we take a look at the recent price performance of names that can potentially be involved in index changes and our flow expectations for each name.

Appreciate Group/Paypoint: Completion

On 1 March the shares of Appreciate were cancelled from AIM and the new shares of Paypoint were admitted to trading on the LSE.
In my previous insight, I mentioned that although the offer price did not seem generous and liquidity limited, the risk/reward was favourable.
In the end, shareholders saw a good opportunity to cash in after a sluggish performance since the pandemic outbreak.

Selected European Holdcos and DLC: February‘23 Report

Discounts to NAV of covered holdcos have generally tightened during February. Discounts to NAV: C.F.Alba, 53.2%; GBL, 34.9%; Heineken Holding, 16.1%; Industrivärden C, 10.6%;
Investor B, 11.2%; Porsche Automobile Holding, 50.5%. The spread of Rio Tinto DLC tightened to 12.6%. Spreads tend to tighten in favourable market conditions.
Recommended trades are: GBL, Heineken Holding, Porsche Automobile Holding, and possibly CF Alba (long).

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Mar 01

Daily Brief Event-Driven: TOPIX Index Upweights: Final Predictions for The “The Big April Basket” 2023 and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

TOPIX Index Upweights: Final Predictions for The “The Big April Basket” 2023
HKBN (1310 HK): Trading Halt, HGC’s Rumoured Takeover Offer
Long Short Setup on Douzone Bizon & KMW with K-New Deal Rebalancing on March 9
End of Mandatory Lock-Up Periods for 35 Companies in Korea in March 2023
G. K. Goh Holdings (GKG SP): Conditional VGO at S$1.26
KRX New Deal Index Rebalance Preview: Potential Flows as Announcement Looms
FEMSA/Heineken Holding Chain: Stake Sales and Share Price Spread
(Mostly) Asia M&A, Feb 2023: Newcrest Mining, S.M Entertainment, Kanematsu, Nissin Electric
Dr. Reddy’s Laboratories (DRRD IN): New Acquisition to Bolster US Generic Product Portfolio
MVIS Global Rare Earth/Strategic Metals Index Rebalance Preview: One Add, One Delete Possible

TOPIX Index Upweights: Final Predictions for The “The Big April Basket” 2023

Some low liquidity stocks in the TOPIX Index carry a liquidity factor of 0.75x resulting in their actual index weights being smaller than their default weights.
These names are reviewed every April and if the liquidity factor of a stock gets removed, the stock will enjoy buying flows from passive trackers of TOPIX.
In this insight, we take a look at Quiddity’s final predictions for the names that are likely to see their Liquidity Factors removed in April 2023.

HKBN (1310 HK): Trading Halt, HGC’s Rumoured Takeover Offer

Bloomberg reported HKBN Ltd (1310 HK) has received a takeover offer from HGC Global Communications at a valuation of more than US$1 billion (implies around HK$6 per share).
The shares rose 11.6% to HK$5.59 before entering a trading halt. The rumoured price is underwhelming compared to historical multiples and share prices.
HKBN has a relatively concentrated shareholder register which suggests that the rumoured takeover premium of around 20% is not going to cut it.

Long Short Setup on Douzone Bizon & KMW with K-New Deal Rebalancing on March 9

Another valuable long-short opportunity has arisen this time with K-New Deal rebalancing. The pair consists of Douzone Bizon and KMW, which have switched places in the Internet Index’s top three.
Due to their relatively low trading volume, the passive flow size (x ADTV) that this pair will face at the closing price on March 9th is expected to be significant.
This creates sufficient opportunities for a Long-Short setup in terms of day or swing trading. As KMW is a constituent of the KOSDAQ 150, it is possible to short KMW.

End of Mandatory Lock-Up Periods for 35 Companies in Korea in March 2023

We discuss end of the mandatory lock-up periods for 35 stocks in Korea in March 2023, among which 8 are in KOSPI and 27 are in KOSDAQ.
These 35 stocks on average could be subject to further selling pressures in March and could underperform relative to the market.
Among these 35 stocks, the top 5 market cap stocks include Nh Investment & Securities, WCP, Bionote, Jeio, and Dreamtech.

G. K. Goh Holdings (GKG SP): Conditional VGO at S$1.26

GK Goh Holdings (GKG SP) has disclosed a voluntary conditional offer from management at S$1.26 per share, a 38.5% premium to the undisturbed price (24 February).
The offer price is final barring a competitive situation. The VGO has a 90%+ minimum acceptance condition which can be waived or lowered. Irrevocables represent 62.89% of outstanding shares.
The offer price is attractive in comparison to historical trading ranges. The offer will remain open for at least 28 days which points to the earliest of 11 April close.

KRX New Deal Index Rebalance Preview: Potential Flows as Announcement Looms

The review period for the March rebalance ended on 31 January, changes will be announced in the next few days and implemented at the close of trading on 9 March.
We forecast one add/delete for the Secondary Battery Index and Game Index, and a couple of adds/deletes for the BBIG Index. There will be a lot of capping changes.
The largest inflows are expected on Posco Chemical (003670 KS) and Douzone Bizon (012510 KS); the largest outflows are expected on SK Innovation (096770 KS) and KMW (032500 KS).

FEMSA/Heineken Holding Chain: Stake Sales and Share Price Spread

Following an accelerated bookbuild, Femsa’s interest in Heineken decreased to 5.1% and in Heineken Holding to 6.3%. Overall the economic participation in Heineken Group decreased from 14.76% to 8.13%.
At current market prices, Heineken could afford buying half of the remaining holdings of FEMSA (both Heineken and Heineken Holding), and still be within 2.5x leverage target (2023e consensus estimates).
The discount has been tightening since Q3 2022, so far to 16.3%, still above the 10.4% average of the last ten years, and rather large considering such a simple structure.

(Mostly) Asia M&A, Feb 2023: Newcrest Mining, S.M Entertainment, Kanematsu, Nissin Electric

For the month of February, 14 new deals (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$23bn.
The average premium for the new deals announced (or first discussed) in February was 34%.
This compares to the average premium for all deals in 2022 (106 deals), 2021 (165 deals), 2020 (158 deals), and 2019 (145 deals) of 41%, 33%, 31%, and 31% respectively.

Dr. Reddy’s Laboratories (DRRD IN): New Acquisition to Bolster US Generic Product Portfolio

By Tina Banerjee

Dr. Reddy’s Laboratories (DRRD IN) entered into a definitive agreement to acquire the U.S. retail generic prescription product portfolio of Mayne Pharma (MYX AU) for $105M.
The deal will add approximately 85 approved generic products and four pipeline products. For the fiscal year ending June 30, 2022, this portfolio generated revenue of $111M.
Considering the revenue potential, the acquisition price seems to be reasonable. Being a high margin and limited competition portfolio, the acquisition will be earnings accretive for Dr. Reddy’s.

MVIS Global Rare Earth/Strategic Metals Index Rebalance Preview: One Add, One Delete Possible

The review period for the March rebalance ended yesterday. Announcement of the changes will be made on 10 March and will be implemented at the close on 17 March.
Mineral Resources (MIN AU) is a potential index inclusion if it is added to the index universe with lithium revenues nearing the 50% threshold.
ioneer Ltd (INR AU) is very close to the 98% deletion threshold and could be removed from the index at the March rebalance.

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Feb 28

Daily Brief Event-Driven: Japan Post Bank (7182 JP): BIG Offering Supported by Buybacks & Passive Flow and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Japan Post Bank (7182 JP): BIG Offering Supported by Buybacks & Passive Flow
PCCW And HKT’s 2022 Results
Shorting Entry Point on Ecopro BM with KODEX Battery ETF Rebalancing on March 10
Slater & Gordon (SGH AU): Allegro’s Opening Salvo
Quiddity Leaderboard JPX-Nikkei 400: End-Feb 2023
EQD | SPX Vs SX5E: Trade a Relative Value Vol Spread
G.K.Goh’s Voluntary MBO

Japan Post Bank (7182 JP): BIG Offering Supported by Buybacks & Passive Flow

Japan Post Holdings (6178 JP) is looking to reduce its stake in Japan Post Bank (7182 JP) from 89% to 60%. That is over US$9bn at the last close.
The placement is supported by buybacks (ToSTNeT-3 and on-market) that will absorb some of the offering. Then there is the passive buying that will absorb a third of the offering.
One of the key short-term supports will be the exercise of the over-allotment of the Japan offering. But that will require persuading retail investors to buy into the offering.

PCCW And HKT’s 2022 Results

PCCW Ltd (8 HK)‘s FY22 revenue, EBITDA, and profit increased by 2%, 6%, and 11% to HK$36.1bn, HK$12.4bn, and HK$834mn.
HKT Ltd (6823 HK)‘s revenue, EBITDA, and profit increased by 0.5%, 3%, and 0.4% to HK$34.1bn, HK$13.1bn, and HK$4.7mn.
The dividend pass-through is 100%. PCCW’s current discount to NAV is in line with its 52-week average.

Shorting Entry Point on Ecopro BM with KODEX Battery ETF Rebalancing on March 10

Ecopro BM’s weight has expanded to 22%. Since the probability of receiving a 15% cap is virtually 100%, it will inevitably undergo a weight change of up to nearly 7%p.
If the ongoing rally subsides before March 10th and returns to the January DTV level, the price impact could surge up to 0.3-0.4x daily for three trading days.
This seems to be a sufficient level for a shorting entry point. It may be worth considering an outright short position on Ecopro BM or Long Short with SK Innovation.

Slater & Gordon (SGH AU): Allegro’s Opening Salvo

Beleaguered law firm Slater & Gordon (SGH AU) has announced an A$0.55/share cash off-market Offer from Aussie PE outfit Allegro.
The key condition is Allegro acquiring a a 50.1% interest. This condition may be waived.
The Offer was more than welcome by S&G’s board. “We don’t belong on the stock exchange,” said CEO John Somerville.

Quiddity Leaderboard JPX-Nikkei 400: End-Feb 2023

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 2023 based on trading data as of end-February 2023.

EQD | SPX Vs SX5E: Trade a Relative Value Vol Spread

By Simon Harris

European markets have begun to outperform their US peers over last few months
The differences in market sentiment have driven both the implied and realised vol spread wider
Trade a relative vol spread that should hold up in multiple market scenarios

G.K.Goh’s Voluntary MBO

Verveine Pte. Ltd., a vehicle controlled by Goh Geok Khim (executive chairman) and Goh Yew Lin (MD), has made a voluntary offer for GK Goh Holdings (GKG SP).
The Offer price of $1.26/share, which is final, is a 38.5% premium to last close. It is conditional on the Gohs holding 90%, which may be reduced to 50%.
GKG Investment, with 62.89%, has given an irrevocable to tender.

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Feb 27

Daily Brief Event-Driven: STAR50 Index Rebalance: Five Changes as Adds Bigly Outperform Deletes and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

STAR50 Index Rebalance: Five Changes as Adds Bigly Outperform Deletes
Fujitec (6406) EGM – It WAS a Close-Run Thing, Glass Lewis Was the Big Winner, and SCANDAL?
HSTECH Mar23 Index Review/Flows – Weibo IN, Ming Yuan Cloud OUT, BIGLY Flows on Li Auto & Xpeng
Halcyon Agri (HACL SP): Offer Document Out, Offer Closes 24 March
HSCEI Mar23 Index Review/Flows – Xpeng Added, China Feihe Deleted, Li Auto Sees A Bump Up
HSI Mar23 Index Review/Flows – No Changes But Flows; 100 Names a Loooong Way Off
Merger Arb Mondays (27 Feb) – Jiangnan, Origin Energy, Pushpay, Nitro, Norwest, Halcyon, Boustead
Weekly Deals Digest (26 Feb) – Sembcorp Marine, Jiangnan, Origin Energy, Nitro, Boustead, Fujitec
Halcyon Agri: Offer Doc Out. No New News Otherwise

STAR50 Index Rebalance: Five Changes as Adds Bigly Outperform Deletes

The index committee has continued to use a 6-month minimum listing history leading to five changes to the SSE STAR50 (STAR50 INDEX) in March.
One way turnover is estimated at 4.95% and will result in a one-way trade of CNY 4,413m. The estimated impact on the deletes is higher than that on the adds.
The inclusions have outperformed the deletions over multiple time periods. There will be pre-positions on the stocks and those could be unwound over the next week or two.

Fujitec (6406) EGM – It WAS a Close-Run Thing, Glass Lewis Was the Big Winner, and SCANDAL?

The Fujitec Co Ltd (6406 JP) EGM where activist Oasis Management wanted to spill the independent board members took place Friday.
Results were mixed, but generally a success for Oasis, with 9 of the 13 votes won. Preliminary analysis of “uncertain voter” split interesting, and “Glass Lewis Effect” stronger than expected.
The real shocker, however, was a footnote at the end of the announcement. This could (and should) have further repercussions.

HSTECH Mar23 Index Review/Flows – Weibo IN, Ming Yuan Cloud OUT, BIGLY Flows on Li Auto & Xpeng

On Friday 24 February 2023, the Hang Seng Index Committee announced changes for the HSTECH Index – Weibo Corp (9898 HK) IN, Ming Yuan Cloud Group (909 HK) OUT.
Notably, the changes in FAF due to the new treatment for Dual Primary Companies means decent boosts in weight for XPeng (9868 HK) and Li Auto (2015 HK).
Of the three “major” indices, this one produces the most fun – US$900mm+ and 8.7% flow one-way. And the big flows are additive to the other indices.

Halcyon Agri (HACL SP): Offer Document Out, Offer Closes 24 March

China Hainan Rubber Industry (601118 CH) has despatched the offer document relating to its Halcyon Agri (HACL SP) MGO at US$0.315 or S$0.413 per share. The offer closes on 24 March.
The MGO has a 50%+ minimum acceptance condition which requires around 40% of minorities’ acceptance rate (47% excluding the Gondobintoro Family).
We think that this is achievable as the offer is attractive. At the last close and for an early-April payment, the gross and annualised spread is 0.7% and 7.3%, respectively.

HSCEI Mar23 Index Review/Flows – Xpeng Added, China Feihe Deleted, Li Auto Sees A Bump Up

HSCEI keeps its constituent count at 80 names, adds XPeng (9868 HK) and deletes China Feihe (6186 HK).
There are decent flows in this rebal, with Tencent (700 HK) and Alibaba Group (9988 HK) seeing selling, Meituan (3690 HK) seeing buying. Li Auto (2015 HK) sees FAF upweight.
Janaghan Jeyakumar, CFA had called the deletion of China Feihe, but had another name higher on the ADD list. 3.2% and HK$2.6bn one-way flow.

HSI Mar23 Index Review/Flows – No Changes But Flows; 100 Names a Loooong Way Off

There are no index changes, in what comes as a surprise given the index is now 9 months late getting to 80 names, with a target to get to 100.
There are, however, several capping changes, leading to nearly 3 days to sell on HSBC Holdings (5 HK) and 2.6% one-way turnover.
The lack of name changes is disappointing. They don’t need to find names to delete, just names to add to improve tracking and coverage. This portends further slowness to change.

Merger Arb Mondays (27 Feb) – Jiangnan, Origin Energy, Pushpay, Nitro, Norwest, Halcyon, Boustead

We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
Highest spreads – 21Vianet Group (VNET US), Alliance Aviation Services (AQZ AU), 111 Inc (YI US), Golden Energy & Resources (GER SP), Origin Energy (ORG AU), Toyo Construction (1890 JP).
Lowest spreads – Ihara Science (5999 JP), Tyro Payments (TYR AU), Nitro Software Ltd (NTO AU), Boustead Projects (BOCJ SP), Nissin Electric (6641 JP), Techno Associe (8249 JP).

Weekly Deals Digest (26 Feb) – Sembcorp Marine, Jiangnan, Origin Energy, Nitro, Boustead, Fujitec

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 – Pertamina Geothermal Energy (PGEO IJ) has a flat debut and Star Entertainment Group (SGR AU) aims to raise A$800 million to fix its balance sheet.
Event-Driven developments – Sembcorp Marine (SMM SP), Halcyon Agri (HACL SP), Fujitec Co Ltd (6406 JP), Jiangnan (1366 HK), Techtronic Industries (669 HK), Origin Energy (ORG AU), Nitro, Pushpay.

Halcyon Agri: Offer Doc Out. No New News Otherwise

The Offer Document for China Hainan Rubber Industry (601118 CH)‘s mandatory Offer for Halcyon Agri (HACL SP) has been dispatched.
Hainan Rubber holds 36% and needs 14% out of 34.8% available – or ~40% to tender. The first close is the 24 March.
There is no IFA opinion in the Offer Doc. This will be present in the Circular which is expected to be sent out by the 10th March, at the latest.

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Feb 26

Daily Brief Event-Driven: HSI Index Rebalance: No Changes & Further Delays to Reaching the 80 Member Target and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

HSI Index Rebalance: No Changes & Further Delays to Reaching the 80 Member Target
Toshiba (6502) – Funding Unsecured! (This Is Getting To Be a Habit)
HSCI Index Rebalance: 35 Adds, 28 Deletes & Changes to Southbound Stock Connect
HSCEI Index Rebalance: Xpeng (9868) Replaces China Feihe (6186); Li Auto (2015) Biggest Gainer
Index Rebalance & ETF Flow Recap: KOSPI200, SET50, SMM SP, HSI, HSCI
Last Week in Event SPACE: Japan Post, Origin Energy, SATS, China Renaissance, Sembcorp Marine
Fujitec (6406 JP): Oasis Scores a Victory in a Tight EGM Vote
Dividend Record Date Changes Already in Progress in Korea: Trading Ramifications
EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades
(Mostly) Asia-Pac Weekly Risk Arb Wrap: New Century Resource; AAG Energy; Jiangnan, Nitro, Pushpay

HSI Index Rebalance: No Changes & Further Delays to Reaching the 80 Member Target

In a surprise, the Hang Seng index committee has decided not to make any changes to the Hong Kong Hang Seng Index (HSI INDEX) at the March rebalance.
This further delays the timeline for the index to reach 80 constituents. The earliest we will reach the target now is June 2023 (a year later than targeted).
Despite no changes to the index constituents, capping and float changes will lead to a one-way turnover of 2.61% resulting in a one-way trade of HK$5.1bn.

Toshiba (6502) – Funding Unsecured! (This Is Getting To Be a Habit)

A Bloomberg article out Friday evening suggests the JIP Consortium funding plan submitted as the final package to Toshiba Corp (6502 JP) is no longer secure.
Apparently Orix Corp (8591 JP), which with ROHM Co Ltd (6963 JP) was planning to invest equity and pref for total ¥300bn, wants to lower its investment to ¥200bn.
Other equity tranche participants apparently want to reduce exposure as well.

HSCI Index Rebalance: 35 Adds, 28 Deletes & Changes to Southbound Stock Connect

There are 35 adds and 28 deletes for the Hang Seng Composite Index (HSCI) at the March rebalance to take the number of index constituents up to 527.
We expect 29 of the 35 inclusions to the HSCI will be added to Stock Connect, while 20 of the 28 HSCI deletions will be removed from Southbound Stock Connect.
19 stocks could be deleted from Stock Connect only since their average market cap has dropped below HK$5bn- unless the new threshold of HK$4bn is approved in the next week.

HSCEI Index Rebalance: Xpeng (9868) Replaces China Feihe (6186); Li Auto (2015) Biggest Gainer

As expected, XPeng (9868 HK) replaces China Feihe (6186 HK) in the Hang Seng China Enterprises Index (HSCEI INDEX) at the close on 10 March.
Using prices from the close on 24 February, estimated one-way turnover is 3.28% and will result in a one-way trade of HK$2,162m at the close on 10 March.
Short interest on XPeng (9868 HK), Li Auto (2015 HK), China Feihe (6186 HK) is quite high in terms of days of ADV to cover and in terms of float.

Index Rebalance & ETF Flow Recap: KOSPI200, SET50, SMM SP, HSI, HSCI

The changes to the Hang Seng family of indices and the SSE STAR50 (STAR50 INDEX) were announced post market close on Friday.
Busy start to the coming week with the MSCI implementation at the close on 28 February and a few announcements to other indices later in the week.
There were outflows from Tracker Fund of Hong Kong Ltd (2800 HK) during the week taking the YTD outflows to over US$1bn.

Last Week in Event SPACE: Japan Post, Origin Energy, SATS, China Renaissance, Sembcorp Marine

There is no good reason to buy Japan Post Bank (7182 JP)‘s dip until the offering. It’s unlikely to earn the ROE to deserve the PBR it has versus peers.
Brookfield and EIG/MidOcean’s revised NBIO will garner Origin Energy (ORG AU) board support; however, the terms are weird and unfair to investors holding fewer than 100k shares.
SATS (SATS SP) rights offer is not actually a surprise. Not at all. Passive funds will exercise.

Fujitec (6406 JP): Oasis Scores a Victory in a Tight EGM Vote

At the Fujitec Co Ltd (6406 JP) EGM, Oasis successfully secured approval for four out of six candidates for outside directors. The tight vote shows that shareholders desire change.
Oasis fell short of its nominations constituting up to two-thirds of the Board. However, Oasis-aligned directors will represent 67% of outside directors which still can drive meaningful change.
The EGM results will spur optimism that Fujitec can close the performance gap with peers, resulting in a rerating. Fujitec remains attractive on a cash-adjusted P/E basis.

Dividend Record Date Changes Already in Progress in Korea: Trading Ramifications

Notable names that have proposed amendments to their articles of association for changing the dividend record date at this year’s AGM include Hyundai Motor Group, POSCO Holdings, and Kakao Corp.
There were skeptical views on how much response local big-name companies would show to Korea FSC’s plan. However, the response from large companies has been unexpectedly positive and aggressive.
We should consider the possibility that the preferred stock premium of companies whose dividend visibility has improved through this may continue to improve compared to those that have not.

EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades

By Simon Harris

Weekly summary of vol changes and moves across Global Markets
Analysing ATM volatility and skew changes over the last 5 days
We suggest a few trades to take advantage of the implied vol surfaces

(Mostly) Asia-Pac Weekly Risk Arb Wrap: New Century Resource; AAG Energy; Jiangnan, Nitro, Pushpay

There are 42 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
Three new deals was discussed on Smartkarma this past week: New Century Resources (NCZ AU)off-market Offer;AAG Energy Holdings’ (2686 HK) ‘s Scheme; and Jiangnan (1366 HK)‘s MBO.
Key updates took place for: Nitro Software Ltd (NTO AU), Origin Energy (ORG AU), Pushpay Holdings (PPH NZ), Sembcorp Marine (SMM SP), and Boustead Projects (BOCJ SP).

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Feb 25

Daily Brief Event-Driven: Sino Oil (702): Possible Jiangxi Jovo Offer and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Sino Oil (702): Possible Jiangxi Jovo Offer
AMT/Cellnex: Lower Chances of a Bid
A Good Old Fashioned Bidding War
IAG Acquires Air Europa

Sino Oil (702): Possible Jiangxi Jovo Offer

Troubled coalbed methane play Sino Oil And Gas Holdings (702 HK) is currently suspended pursuant to the Hong Kong Code on Takeovers and Mergers.
Sino Oil is burdened with a large convertible note and a winding-up petition. Its auditor has disclaimed accounts since 2017 over its ability to continue as a going concern.
Jiangxi Jovo Energy (605090 CH) is interested in taking more than 50% of Sino Oil (via new shares), but less than 75%. Sino Oil is up >100% in the past month.

AMT/Cellnex: Lower Chances of a Bid

American Tower stated during FY 2022 results presentation that debt reduction is its main priority. The probability of a takeover bid for Cellnex by American Tower and Brookfield is reduced.
Cellnex on 14.7x EV/NTM EBITDAe is trading cheaply vs. AMT on 19.5x and below private equity deals at 25-30x. I believe that Cellnex’s fundamentals are solid, and would be long.
Cellnex is the undisputed European leader in telecommunications towers with both high cash flow visibility (growth forecasted at 18% for the period 2021-2025e) and trading at 7.3% 22e FCF yield.

A Good Old Fashioned Bidding War

Triton has raised its offer price to €8.95 in cash, 5.3% above the Alternative Consideration of the Bain’s consortium improved offer (vs. my €9.01/share fair value estimate, comps-based).
Gross spread is +0.78%. It seems that now it is the turn of the Bain’s consortium to make a move, at least match and probably bid over Triton’s offer.
Bain has the main shareholders on board. As of 24 February, I estimate the paper profits of Triton to be around €31 million (minus the costs of preparing the offer).

IAG Acquires Air Europa

IAG Presents better than expected Q4 2022 results and announces that it will acquire the remaining 80% of Air Europa for €400 million in a cash and shares deal.
The purchase price implies valuing 100% of Air Europa at €500 million, which is in line with expectations and is half of the €1,000 million agreed in November 2019.
Air Europa and IAG finally reach an agreement and clear an uncertainty. It makes strategic sense to create a larger intercontinental hub between Europe and Latin America in Madrid,

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Feb 24

Daily Brief Event-Driven: Techtronic Industries (669 HK): JR Puts Down That Tool and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Techtronic Industries (669 HK): JR Puts Down That Tool
Star Entertainment (SGR AU): A$800m Equity Raise to Buy Some Time
Oasis Management Invests in KT&G
Star Entertainment’s A$800mn Buffer
Never-Seen Price Pattern Detected in a Split-Off Event Granting Appraisal Rights in Korea
Boustead Projects: Boustead Singapore Bumps. Still Underwhelming
Trophy Asset
Quiddity Leaderboard for SET Jun 23: DTAC-TRUE Intra-Review Changes
Nitro (NTO AU): Potentia Comes Good with a Three-Part Offer
Ihara Science (5999 JP) – Here Comes The Bumpitrage

Techtronic Industries (669 HK): JR Puts Down That Tool

Jehoshaphat Research (JR) argues the case that Techtronic Industries (669 HK) has been engaged in “snowballing” to maintain margin growth.
JR flags TTI is the only public company in the world (with over $1bn in revenues) exhibiting positive sequential gross margin change in every semi-annual period over ten years.
Short interest had been picking up ahead of the short sell report. Shares fell 19% before being suspended in the afternoon session.

Star Entertainment (SGR AU): A$800m Equity Raise to Buy Some Time

Star Entertainment Group (SGR AU) is looking to raise A$685m via an ANREO of 3 shares in The Star for every 5 shares at a fixed price of A$1.2/share.
The A$1.2/share price is a 21.1% discount to the last close and a 14.3% discount to the Theoretical Ex-Rights Price (TERP) of A$1.4/share.
Short interest is near the highs and there is an index deletion pending. We’d look to buy the stock on a move lower, especially closer to index deletion.

Oasis Management Invests in KT&G

It was reported on 22 February in numerous local Korean media that Oasis Management has invested about 1.5% stake in KT&G Corporation (033780 KS).
This investment in KT&G is reportedly Oasis Mgmt’s first investment in Korea. For now, Oasis Mgmt has not made any public announcement about its investment in KT&G.
With Oasis Mgmt investing 1.5% stake in KT&G, we believe it is increasingly likely that it could start its activist campaign on KT&G sometime in 2023.

Star Entertainment’s A$800mn Buffer

Star Entertainment Group (SGR AU)‘s announced it intends to raise $800mn after reporting a statutory $1.26bn 1H23 loss.
This equity raising will be broken down into a A$685mn non-renounceable entitlement Offer and a A$115mn institutional placement. The equity raising is fully underwritten.
Star also announced it has secured covenant relief through to June 2025. Star’s immediate focus is to get its house in order and prove its suitability to hold casino licences.

Never-Seen Price Pattern Detected in a Split-Off Event Granting Appraisal Rights in Korea

A rather unusual price movement came out on February 20 for HLB. On the first trading day after the board of directors’ decision, the price reached the upper daily limit.
The short covering got to a temporarily excessive level in the process of securing appraisal rights should be the reason that led to the upper limit.
We should design a trading setup targeting excessive short covering-triggered price overheating in split-off events. At this point, the most likely candidate to pursue a split-off is DB Hitek.

Boustead Projects: Boustead Singapore Bumps. Still Underwhelming

On the 6 Feb, Boustead Projects (BOCJ SP), a high-spec facilities designer and builder, announced an unconditional Offer from Boustead Singapore Limited (BOCS SP) at S$0.90/share.
The Offer price was low-balled. Taking into account net cash of S$154mn, this was being done cheaply. It needed to be bumped and shares traded up to S$0.99 in expectation.
BOCS has now bumped to S$0.95/share and declared terms final. Not a great outcome for minorities.

Trophy Asset

At 6.2x EV/Sales, ManU’s shares are trading well above any other listed European football club, which may increase if the Glazers manage to cash in at a trophy asset valuation.
Suitors are queuing and prospective bids as high as about £5 billion ($6 billion, 8.4x EV/Sales) been made to restore the club to its former glory.
Unlimited wealth and investments in players don’t guarantee winning a European Champions League, but Manchester United is still a unique asset, with more chances than not of changing hands.

Quiddity Leaderboard for SET Jun 23: DTAC-TRUE Intra-Review Changes

The completion of the Total Access Communication (DTAC TB) – True Corp Pcl (TRUE TB) merger could cause an intra-review change next week.
There could be two more index changes in the regular review in June 2023.
In this insight, we take a look at the current rankings of potential ADDs and potential DELs and their recent price and volume performance.

Nitro (NTO AU): Potentia Comes Good with a Three-Part Offer

Potentia has returned with an improved three-part offer for Nitro Software Ltd (NTO AU). The base offer of A$2.17 is 0.9% higher than Alludo’s A$2.15 offer.
The offer could rise to A$2.20 or A$2.25 per share based on hitting additional conditions. There is a clear path for the final offer to reach A$2.20 per share.
A A$2.25 per share offer is unlikely due to the onerous 25% scrip acceptance condition. At the last close, the gross spread to the likely final A$2.20 offer is 0.5%.

Ihara Science (5999 JP) – Here Comes The Bumpitrage

In my first piece, Ihara Science (5999 JP) Sees the Chairman Launch an MBO. I Might Expect Excitement I noted that the price was too low. I expected activist efforts.
The price did not trade below the Tender Offer Price after it opened for trading. That was a sign this wasn’t going to go easy.
This morning I am made aware of a letter from one of the “active if not activist” shareholders saying the price is too low. Hint: It is.

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Feb 23

Daily Brief Event-Driven: SATS SP: S$800m Rights Issue to Fund WFS Acquisition and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

SATS SP: S$800m Rights Issue to Fund WFS Acquisition
Japan Post Holdings To Effectively “Re-IPO” Japan Post Bank (7182 JP)
SATS – The Future Is Cargo so Shareholders Pay the Freight – S$800mm Rights Offer
Boustead Projects (BOCJ SP): Boustead Singapore’s Final S$0.95 Offer to Call Minorities’ Bluff
Japan Post Bank Possible Placement – Here We Go Again with the US$9bn Overhang
Origin Energy (All But) Supports Brookfield/EIG’s Revised Terms
EQD | Alibaba (BABA US): Playing the Earnings Via Derivatives
SM Entertainment: Provides a Detailed Analysis of a Strategic Partnership with Kakao
Nitro Software: Potentia’s Tiered-Bump. Expect Alludo To Cash In

SATS SP: S$800m Rights Issue to Fund WFS Acquisition

SATS (SATS SP) has announced a 323:1000 underwritten rights issue at S$2.2/share that will raise S$798.8m to fund the WFS acquisition.
The rights issue price is a 20% discount to the last close and a 15.9% discount to the Theoretical Ex-Rights Price (TERP).
There has been a lot of short selling on the stock since the start of the year, peaking last week where 43% of total volume traded was from short selling.

Japan Post Holdings To Effectively “Re-IPO” Japan Post Bank (7182 JP)

Overnight a Reuters article suggested Japan Post Holdings (6178 JP) had started talks to sell a near 30%) stake in Japan Post Bank (7182 JP), the first sale since IPO.
A sale is designed with two aims: 1) the TSE requires a 35% tradable share ratio, and 2) JPH is supposed to lower holdings in JPB to <50% by 2025.
This event may include a buyback, and has moving parts, and flows on the back end, but fundamentally a sale would effectively constitute a “re-IPO” of the shares.

SATS – The Future Is Cargo so Shareholders Pay the Freight – S$800mm Rights Offer

Last September, rumours then an announcement SATS (SATS SP) – a leading inflight catering and gateway service provider – would buy WFS – the world’s largest cargo handler hit shares.
They expected to pay €1.187bn or S$1.639bn (9.7x EV/EBITDA), primarily through S$1.7bn of new equity, to close in March 2023. In January, it was S$800mm of rights and a loan.
Shareholder approval came 18 January. Regulatory approvals were received Monday. Closing comes no later than 3 April. Today the company announced a large rights offering.

Boustead Projects (BOCJ SP): Boustead Singapore’s Final S$0.95 Offer to Call Minorities’ Bluff

Boustead Projects (BOCJ SP)/BPL has disclosed an improved final unconditional offer from Boustead Singapore Limited (BOCS SP) at $0.95 per share, a 5.6% premium to the previous S$0.90 offer.
In response to SIAS’ call to table a fairer offer closer to 1x P/NAV, Boustead Singapore has marginally increased its offer from 0.71x to 0.75x P/NAV.
Boustead Singapore’s approach is to call minorities bluff by tabling a “take it or leave it” proposal instead of a fair offer. The shares are currently trading 4.2% above terms.

Japan Post Bank Possible Placement – Here We Go Again with the US$9bn Overhang

By Sumeet Singh

Japan Post Holdings (6178 JP) is looking to trim its stake in Japan Post Bank (7182 JP) by a third, as per Reuters.
The deal would be worth around US$9bn and could come as soon as next month.
In this note, we talk about the news and take an early look at the possible selldown.

Origin Energy (All But) Supports Brookfield/EIG’s Revised Terms

The Brookfield/EIG consortium has reduced its Offer for Origin (ORG AU) to ~A$8.90/share, down from A$9.00/share, after conducting due diligence in the wake of the Aussie government’s gas price intervention.
Oddly, this revised proposal remains non-binding, suggesting a number of political kinks still need to be ironed out.
For its part, Origin’s board reckons the revised proposal has the potential to deliver significant value to shareholders, all but guaranteeing board support, assuming a firm Offer unfolds.

EQD | Alibaba (BABA US): Playing the Earnings Via Derivatives

By Simon Harris

Alibaba (BABA US) is set to report earnings tomorrow on the 23rd
Stock has pulled back from the highs but earnings could be the next catalyst to determine direction
We use the derivatives market to extract market expectations and suggest some suitable trades

SM Entertainment: Provides a Detailed Analysis of a Strategic Partnership with Kakao

Today (22 February), S.M.Entertainment Co (041510 KS) provided a detailed analysis of the strategic partnership with Kakao from shareholders and fans perspectives.
The timing of this detailed strategic partnership announcement is a bit unusual since it comes BEFORE the actual tender offer announcement and potential capital injection into SM Entertainment by Kakao.
Our call on this M&A remains consistent. In the last week of February/early March, Kakao could make a tender offer at prices of at least 140,000/150,000 won, in our view.

Nitro Software: Potentia’s Tiered-Bump. Expect Alludo To Cash In

After Alludo stated its $2.15/share Offer price was ‘best and final’, even if a superior proposal emerges, the ball was in Potentia’s court to just sneak in above those terms.
And so they have, with a $2.17/share unconditional Offer for Nitro (NTO AU), increasing to $2.20 if they get to 75% interest, and $2.25 if ≥25% tendering opt for scrip.
Expect Nitro’s board to announce its unanimous support for Potentia’s revised Offer. Expect Alludo to cash in as tendering nears 75%.

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Feb 22

Daily Brief Event-Driven: Foreign Room Race for MSCI Re-Inclusion: SK Telecom Is Unexpectedly Rising and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Foreign Room Race for MSCI Re-Inclusion: SK Telecom Is Unexpectedly Rising
Jiangnan Group (1366 HK): Chairman/CEO’s Privatisation Offer at HK$0.40
Pushpay Holdings: ACC & Nikko Say No To Scheme
KOSPI200 Index Rebalance Preview: Changes in April & June
Nitro Software: KKR’s Offer Unconditional. This Is Potentia’s For The Taking
Pushpay (PPH NZ): Proxy Advisors Say Yes but Several Shareholders Say No
Quiddity TWSE Div+ Capping Flows March 2023: Final Minute Changes to Expectations
Origin Energy (ORG AU): Recut Deal Is a Win-Win
Sibanye-Stillwater Raids New Century Resources (NCZ AU)
Quiddity TWSE 50 & 100 Mar 23 Final Expectations: There Could Be a Surprise Index Change!

Foreign Room Race for MSCI Re-Inclusion: SK Telecom Is Unexpectedly Rising

Looking at the recent pattern, SKT’s fast-rising is quite noticeable. Its foreign room rose to 12.08%. On the other hand, KT’s foreign room growth seems to be slowing somewhat.
SKT’s pace is fast. If the current pace continues, there will be even the possibility of inclusion with a full adjustment factor of 1.0, exceeding 25%, by the August review.
We should design a momentum trading setup targeting the point when SKT’s foreign room decline trend will be reflected into an MSCI re-inclusion momentum.

Jiangnan Group (1366 HK): Chairman/CEO’s Privatisation Offer at HK$0.40

Jiangnan (1366 HK) disclosed a scheme privatisation offer from Mr Chu Hui (Chairman and CEO) at HK$0.40 per share, a 107.3% premium to the undisturbed price (HK$0.193 on 13 February).
The key condition is approval by at least 75% of disinterested shareholders (<10% of all disinterested shareholders rejection). The shareholder with a blocking stake will be supportive.
The price is final and attractive in the context of historical prices and multiples. The scheme meeting is likely in mid-May. At last close, the gross spread is 12.7%.

Pushpay Holdings: ACC & Nikko Say No To Scheme

The Scheme Meeting for BGH/Sixth Street’s NZ$1.34/share Offer for church donor management play Pushpay Holdings (PPH NZ) will take place on the 3 March.
Accident Compensation Corporation (ACC), holding 6.2% of shares out, said it will vote against the Scheme. Nikko Asset Management (1.4%) also said they will reject the Offer.
Shares have wobbled and are now 5.5% adrift of terms. BGH/Sixth Street still has the flexibility to bump.

KOSPI200 Index Rebalance Preview: Changes in April & June

Samyang Foods (003230 KS) will replace Hyundai Greenfood (005440 KS) in the Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX) at the close on 12 April.
We expect DGB Financial Group (139130 KS) will replace Meritz Securities (008560 KS) in early April.
Then we expect another 3 changes at the regular rebalance in June. The potential adds have moved sharply higher recently and there are flows from other index trackers too.

Nitro Software: KKR’s Offer Unconditional. This Is Potentia’s For The Taking

Alludo has declared its Offer of A$2.15 cash per Nitro Software Ltd (NTO AU) share free from all remaining conditions.
Separately, Potentia’s due diligence is expected to conclude tomorrow, the 22 February, with the expectation it bumps its current offer of A$2.00/share.
Currently trading at A$2.20 per share suggesting limited upside from here.

Pushpay (PPH NZ): Proxy Advisors Say Yes but Several Shareholders Say No

Shareholders representing around 12.6% of outstanding shares have stated that they will vote against Pushpay Holdings (PPH NZ)’s NZ$1.34 offer from Sixth Street/BGH (scheme vote on 3 March).
The NO votes will need a less than 63% turnout to block the scheme. A 5% bump (NZ$1.41) would be in line with the IE’s valuation mid-point at current FX.
Sixth Street/BGH have taken issue with the IE’s valuation (unsuitable FX rates and optimistic forecasts) and have got proxy advisors’ support. Therefore, a bump is not a sure thing.

Quiddity TWSE Div+ Capping Flows March 2023: Final Minute Changes to Expectations

The index constituent weights of the TWSE Div+ Index will be capped during the upcoming March 2023 Index quarterly index review.
Previously, it looked like there were going to be no flows. However, now my expectations have changed, as of Monday’s close (they weren’t going to change as of Friday).
In this insight, we take a look at Quiddity’s expectations for index flows resulting from these events.

Origin Energy (ORG AU): Recut Deal Is a Win-Win

Origin Energy (ORG AU) has disclosed a revised non-binding proposal from Brookfield/EIG. The headline price has been lowered by -1.1% from A$9.00 to A$8.90 per share.
Under the revised proposal, shareholders’ first 100,000 shares get A$8.90. Beyond that ownership, the offer is A$4.334 plus US$3.194 per share (currently worth A$8.99 per share).
While the recut introduces FX rate risk, the average implied value is A$9.01 since 10 November. Both the offeror and the Board seem keen to get a binding offer.

Sibanye-Stillwater Raids New Century Resources (NCZ AU)

Sibanye-Stillwater (SGL SJ), the holder of 19.9% of shares, has made an off-market takeover for Queensland zinc miner New Century Resources (NCZ AU) at $1.10/share, a 42.9% premium to last close.
Sibanye-Stillwater said it was concerned about the change in the strategic direction of NCZ under the current management.
Concurrently, Sibanye-Stillwater has made an on-market buy order for 10.92% (14.4mn shares) of shares out to take its stake to ~30%. Shares closed at $1.095. ~32mn shares changed hands.

Quiddity TWSE 50 & 100 Mar 23 Final Expectations: There Could Be a Surprise Index Change!