Event-Driven

• SBI Holdings (8473 JP)‘s unit SBI Regional Bank Holdings KK (SBI 地銀ホールディングス株式会社) today announced it had received FSA authorisation to turn the company into a Bank Holding Company.  
• There are some technicalities involved. SBI announced it would buy 2.5mm shares of Shinsei on-market to get to 50.05% by end-March 2023. This will disappoint some, but…
• I expect investors should continue to look at the big picture. Technicalities are technicalities. Strategy is strategy. The big picture is unchanged and there isn’t that much room to manoeuvre. 

• Golden Energy & Resources (GER SP), an Indonesian/Australian energy/met coal play, may be subject to an acquisition from its controlling shoulder, the Widjaja Family.
• GEAR reported 1H22 (to June) earnings of US$279mn, an 859% gain yoy, as contributions from the newly acquired stake in an Australian coal mine from BHP (BHP AU) kicked in.
• The family is potentially betting on one to two more years of outsized cashflow as the world’s coal habit remains healthy.

• The KRX gives three heads-up types: WARNING (illegal trading), ADMINISTRATIVE (insolvency), & ATTENTION (inappropriate accounting). Those losing eligibility are ADMINISTRATIVE (KOSPI 200) and ADMINISTRATIVE + ATTENTION (KOSDAQ 150).
• Those designated as WARNING keep the eligibility for KOSPI 200/KOSDAQ 150 unless delisting is decided. We can find these heads-up designations on the KRX website, which is available in English.
• Osstem is currently an ATTENTION issue, so ineligible at this point. Knotus was designated as a WARNING issue in June and underwent a trade suspension. Nevertheless, it maintains eligibility.

• Back on the 26 April, church donor management tech play Pushpay Holdings (PPH NZ) announced “unsolicited, non-binding and conditional expressions of interest or approaches from third parties“. No price was mentioned. 
• Roughly a month later, BGH Capital and Sixth Street, both existing shareholders, entered into a cooperation agreement with respect to a potential transaction for Pushpay. Again, no price was provided. 
• Pushpay has now announced it has received a non-binding proposal. Word on the street this involves BGH. Still, no price was made public. A 30% premium to undisturbed is ~NZ$1.34/share.

• With a week to the start of the review period, we forecast one inclusion and a lot more deletions for the MSCI Korea Index at the November SAIR.
• The impact from passive fund trading is pretty large on the potential and close deletes while the impact is a lot more muted on the sole potential add.
• There will be pre-positioning on most of the names already and part of that shows up in sharply higher short interest on a few stocks.

• We discuss the potential inclusions and exclusions in the next MSCI Korea Index rebalance announcement (10 November) that are being highlighted by the locals.
• The potential inclusion candidates in the MSCI Korea Index emphasized by the locals in November 2022 include Hyundai Mipo Dockyard (010620 KS) and Hanwha Aerospace (012450 KS).
• Potential exclusion candidates include Seegene Inc (096530 KS), Meritz Financial Group (138040 KS), and Green Cross (006280 KS). 

• Overnight, a few news outlets are running with the story that Toshiba Corp (6502 JP) has granted “preferred bidder” status to the Japan Industrial Partners (JIP)-led consortium bid.
• JIP had originally signed up with public-private fund JIC, forming one of the four bids (the other three being CVC, Bain, and Brookfield) but JIP and JIC split last month.
• “Preferred Bidder status” is just that. It’s not exclusive, but one can read between the lines. But the articles have interesting details, including the first trial ballon price leak.

• PTB Group Ltd (PTB AU)‘s scheme meeting is on 16 November. The IE considers the offer of A$1.595 + dividend up to A$0.03 per share (total of A$1.625) fair.  
• The key condition is approval from shareholders – headcount test and approval by at least 75% of the votes cast on the resolution. The two largest shareholders will vote YES.
• We continue to think that offer is attractive. At the last close price and for the 9 December payment, the gross and annualised spread is 2.2% and 13.8%, respectively.

• After the market close today, Lock&Lock announced that it will pay out dividends per share of 1,653 won worth 83 billion won, representing 25% of the company’s market cap.
• The shareholders date of record that could receive the dividends is as of 30 September 2022.
• Although the high dividend payment should benefit the existing shareholders, we are not sure on the company’s ability to continue to maintain high dividend payout ratio.

• In the past 24 hours, there have been many news flow about numerous US airports that have been cyber attacked by suspects from Russia. 
• The increasing media attention on cyberattack threat could result in greater concerns about cybersecurity inducing higher global spending on software and other services that help to protect against cyber attacks. 
• Global cybersecurity stocks that could benefit from greater media attention on cyberattacks include Palo Alto Networks (PANW US)  Crowdstrike Holdings Inc (CRWD US)  CloudFlare (NET US).  

• In April, a Bloomberg story said Renault SA (RNO FP) might sell shares in Nissan Motor (7201 JP) to support its investment in EVs. They might sell to Nissan, others.
• Renault shares popped hard, this two months after CEO Luca de Meo had said Renault might split, investing in and listing its EV business separately.  But since then? Crickets.
• Over the weekend, we have news talks are coming to a head. My feeling? The results won’t be pretty – a messy agreement which inspires nobody, but probably still works.

• Bilibili Inc (BILI US) listed in the US in April 2018. It eventually listed in Hong Kong under the ticker Bilibili (9626 HK) in March 2021 as a Secondary Listing. 
• Bilibili (9626 HK)  announced 16 March 2022 it intended to pursue a HK Primary Listing.  Application was announced on 2 May 2022, Circular a month later. Results announced 29 September.
• As of 3 October, it is a Dual Primary Listing, making it eventually eligible for Southbound Trading. But there as confusion as to when. Hint:  It’s March 2023.

• Nearing the end of the review period for the December rebalance of the CSI500 Index, we forecast 50 changes (the maximum permitted) at the close on 9 December.
• There is a big sector skew in the potential changes. We estimate a one-way turnover of 13.67% at the December rebalance leading to a one-way trade of CNY 7.53bn.
• The potential adds have outperformed over the last 6 months but have given up some of the gains recently as market turned volatile. Expect outperformance as the review period ends.

Our latest Webinar looks at news updates on Shinsei, Toa Oil, and Toyo Construction. To help us explore the implications for investors, we welcome Insight Provider Travis Lundy of Quiddity Advisors. 

The webinar will be hosted on Wednesday, 12 October 2022, 17:00 SGT/HKT.

Travis Lundy has 20+ years of experience in Asia doing alternative strategies (i.e. non-delta1 non long-only) in fixed income, equity derivatives, and activist/catalyst/event-driven and long-short equity strategies, with most of that time spent managing money.

• Pushpay Holdings (PPH NZ) confirmed that it had received a “revised” indicative non-binding proposal from a shareholder consortium, believed to be Sixth Street/BGH, which has a 20.3% stake.
• The proposal is “to acquire the Company at a premium to Friday’s closing share price.” Due to the sell-off, Sixth Street/BGH will likely offer a lower premium than initially intended.
• Our best guess is that Sixth Street/BGH’s offer is around A$1.30 per share. While not a knockout offer, it is a good starting point in the current grim market conditions.

• 90% of the way through the review period of the Kospi 200 Index December rebalance, we see two potential changes to the index. There is another potential inclusion failing liquidity.
• This rebalance is expected to have the lowest turnover as compared to any of the Kospi 200 Index rebalances over the last few years. Partly lower markets, partly no IPOs.
• That said, passive trackers are estimated to need to trade over 10 days of ADV on one of the potential adds and both potential deletes.

• Nearing the end of the review period, we expect there will be 18 changes to the SSE180 Index in December. The first-order impact on the stocks is not large.
• Stocks that are not currently in Buy/Sell Stock Connect will be added to the list. That makes them eligible for inclusion in the MSCI and FTSE indices in February/March.
• We see 6 of the potential/close adds being added to the MSCI China Index in February and 8 of the potential/close adds being added to the FTSE All-World/All-Cap in March.

• Davidson Kempner and others may seek an improved offer of up to 3,500p/share, 29.7x EV/Fwd EBIT, in line with Ideagen’s acquisition multiples. Gross spread is +2.38%.
• Assuming AVEVA can reach 2018a 34.7% EBITDA margins and increase revenues, the offer price would seem cheap. An increase to 3,300p seems feasible, £4,073 million, similar to the Bridge Facility.
• Current net debt/EBITDA is 1.3x and EBIT/interest is 33.6x, so it could comfortably take on that additional debt. At 3,300p, proforma net debt/EBITDA would be 1.9x, before adding any synergies.

• PureTech Health (PRTC LN) has confirmed its possible merger with Nektar Therapeutics (NKTR US). Uncertainty regarding the actual offer has caused volatility to PureTech shares.
• Nektar will be required, by not later than November 3, 2022, to announce a firm intention to make an offer for the company.
• Nektar faced a big setback in its lead pipeline assets and is going through tight financial condition. We are not expecting a lucrative takeover offer for PureTech.

• K Car completed its IPO in South Korea in Oct 21. It raised around US$300m after having downsized the offering and cut the asking price to below the IPO range. 
• K Car is a used car marketplace and dealership operating in South Korea.
• In this note, we will talk about the recent updates and the upcoming lockup expiry.

• As a follow-on to TOPIX October 2022 Rebal – BIG Names with BIG Flows which discussed ¥2.1trln a side flows overall, this insight analyses and proposes intra-sector baskets.
• In general, the sector-neutral BUYs vs SELLs baskets of all names where Index Shares change by 10% or more have seen BUYs sharply outperform SELLs in the past three weeks.
• Look for pre-positioning unwinds so trading BUY vs SELL baskets which have bucked the trend, banks and chemicals – might be worthwhile. Otherwise, pick your spots. Use the flow.

• We see 9 potential adds and 2 potential deletes for the MSCI India Index at the November SAIR. There are a few stocks close to the cutoffs.
• Inclusion in the index will require passive trackers to buy 7-14 days of ADV on the stocks. That increases to 18-55 days of delivery volume.
• There appears to be significant pre-positioning on a lot of the potential adds and the shareholding pattern as of end September should provide a better picture.

• A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
• ECM developments – CALB (3931 HK)‘s weak debut. Betagro (BTG TB) will open its books for its THB17.4 billion (US$462 million) from 10 to 25 October.
• Event-Driven developments – Link Administration (LNK AU), MACA Ltd (MLD AU), Tyro Payments (TYR AU), Eagle Cement Corp (EAGLE PM), O2Micro International (OIIM US), Singapore Medical (SMG SP). 

• AIPL has commenced a market consultation on amending the index universe to only include stocks that are a part of the Futures & Options (F&O) segment of the market.
• This is likely driven by a bunch of Adani-group companies that are at the cusp of index inclusion and are not a part of the F&O market.
• Post implementation of the change, Tata Motors Ltd (TTMT IN) is a likely inclusion to the index in December, though that depends on Dr. Reddy’s Laboratories (DRRD IN) being deleted.

• 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

• We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
• Highest spreads – 21Vianet Group (VNET US), Shandong Fengxiang (9977 HK), Alliance Aviation Services (AQZ AU), 111 Inc (YI US), Genex Power Ltd (GNX AU), O2Micro International (OIIM US).
• Lowest spreads – Tyro Payments (TYR AU), OZ Minerals Ltd (OZL AU), Nitro Software Ltd (NTO AU), MACA Ltd (MLD AU), Singapore Medical (SMG SP), Jinke Smart Services (9666 HK).

• At the October rebalance, there are 970 stocks that will have a lower FFW while 114 stocks will have a higher FFW. 493 stocks will undergo a Phased Weight Reduction.
• Estimated one-way turnover is 2.54% resulting in a one-way trade of ¥1.815tn. 500 stocks have over 4 days ADV to trade, 100 stocks have over 9 days ADV to trade.
• Setting the threshold at +/-US$50m to trade, the stocks with inflows have outperformed the stocks with outflows by 6.5% over the last four months.

• On 7 October, SKC Co Ltd (011790 KS) announced that it will conduct a share buyback of 1.89 million shares, representing 5% of outstanding shares.
• We continue to maintain a Negative view of SKC Co.
• We remain concerned about lack of clear measures to protect existing minority shareholders if its major subsidiaries (such as Nexilis) complete IPOs in the next several years.

• The TSE announced its first large FFW rebalance under new rules and Market Segmentation. ~1,000 names see FFW drop 5% or more. 100+ rise 5+%. Reverse funding trades are significant.
• Top BUY flow: Toyota, Olympus, Daiichi Sankyo, Tokio Marine, JP Holdings with an average of 4.0 days’ ADV to buy. Softbank/9984, MitCorp, Hitachi, Suzuki, Marubeni average 4.8 days to SELL.
• 493 names start their phased weight reduction out of TOPIX because they do not meet the hurdle for minimum trading value. And… Shinsei is the most impressive SELL name.

• Chairman Kim of the FSC mentioned potential rule changes in disclosing the names of short sellers at the state audit last Thursday.
• The first is to reveal the identity of short sellers who traded through a swap contract with a broker, which is currently exempt from the short-selling disclosure obligation.
• The second is to disclose the identity of investors caught in illegal short-selling activities, mostly naked short-selling and wall-crossing.

• SBI Holdings (8473 JP)‘s subsidiary has reportedly filed its application to become a Bank Holding Company, the definition being a company holding a 50% or greater stake in a bank.
• Jardine Cycle & Carriage (JCNC SP) is expensive here – relative to historical values –  and from an implied stub perspective, has only briefly been exceeded twice in the last decade.
• Expect Keppel (KEP SP) to re-rate after the spinoff. The Sembcorp Marine (SMM SP) distribution supported by both better profitability and much larger order books can be managed reasonably cleanly. 

• The data in this insight is collated from the “shareholding disclosure” link on the HKEx website.
• Often there is a corresponding HKEx announcement on the increase – or decrease – in the shareholding by directors. However, such disclosures are by no means an absolute. 
• These insights may also flag those companies where shares have been pledged. Stocks mentioned include Luk Fook Holdings Intl (590 HK), Zhongsheng Group (881 HK), and Kowloon Development (34 HK).

• There are 48 – 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 discussed this week: San Miguel (SMC PM)‘s MTO for Eagle Cement (EAGLE PM), Idemitsu (5019 JP)‘s Offer for Toa Oil (5008 JP), and O2Micro (OIIM US)‘s MBO. 
• Key updates took place for Tassal (TGR AU), Hitachi Transport System (9086 JP), Shidax Corp (4837 JP), Toyo Construction (1890 JP), and Singapore Medical (SMG SP).

• We expect a few adds to the HSCI in December followed by a lot more change in March. We could finally reach 80 HSI INDEX constituents in December.
• There will be a handful of adds to the FTSE All-World/All-Cap indices in December. But there will be many changes to the FTSE TWSE Taiwan Dividend+ Index in December.
• There were large inflows to the Yuanta/PShares Taiwan Dividend Plus ETF (0056 TT), Hang Seng H Share Index ETF (2828 HK) and Tracker Fund of Hong Kong Ltd (2800 HK). 

• Myovant Sciences (MYOV US) rejected $2.5 billion takeover offer from its largest shareholder, Sumitomo Dainippon Pharma Co (4506 JP), as the bid significantly undervalues the company.
• Amid its tight cash situation, upcoming patent cliff, and ongoing late-stage clinical trials, Sumitomo is not expected to revise its offer upward.
• New acquisition offer from marketing partner Pfizer is the most likely scenario. Even if the company does not receive any takeover offer, Myovant is capable of running its operating activities.

• Inside is a recap of movements in the last week relating to the Hong Kong Stock Exchange -Shanghai and Shenzhen Northbound Connect facilities, broken down by company and industry.
• Overall, net outflow over the past week was ~US$0.15bn, split between Shanghai (+US$0.05bn) and Shenzhen (-US$0.20bn).
• The largest inflows were into Kweichow Moutai (600519 CH) and Zhejiang Huayou Cobalt (603799 CH). The largest outflows were in LONGi Green Energy Technology (601012 CH) and CATL (300750 CH).

• Sumitomo has offered $22.75/share in cash, 27% premium, for the 48% stake it doesn’t hold in Myovant, whose Board has rejected the offer and is open to negotiate.
• The sell-side forecasts peak sales of over $2 billion for Orgovyx and Myfembree. Myovant also has a co-marketing deal with Pfizer could be worth $3.8 billion in milestones.
• My TP is $22.84 (in line with consensus and the offer price). The market certainly believes that Sumitomo could be preparing a sweetened offer. Will Orgovyx become a blockbuster?

• Inside is a recap of movements in the last week relating to the Shanghai and Shenzhen-Hong Kong Stock Connect facilities, broken down by company and industry.
• Overall, the net inflow over the past week was ~US$0.75bn, split (+US$0.35bn) for Shanghai and (+US$0.40bn) for Shenzhen.
• The largest inflows were into Hang Seng H Share Index (2828 HK) and Wuxi Biologics (2269 HK). The largest outflows were in Geely (175 HK) and AIA Group (1299 HK).

• SBI Holdings (8473 JP)‘s subsidiary has reportedly filed its application to become a Bank Holding Company, the definition being a company holding a 50% or greater stake in a bank.
• The day after I last wrote, Shinsei announced it had received approval to change its name to SBI Shinsei Bank as of 4 January 2023.
• My expectation is the move above 50% happens sooner rather than later. And in that case, investors should think about their approach. Get your cowbells ready.

• Dye & Durham/DND is a persistent bidder and returned with a A$1.27 billion bid for Link Administration (LNK AU)’s CM and BCM businesses. The Board will update next week. 
• The latest offer is attractive but curiously, contradicts DND’s previous comments that the FCA would make it challenging to distribute any part sale proceeds.
• Despite the overhang from the FCA fine, DND’s ongoing persistence and the Board’s potential in-specie distribution of the PEXA Group (PXA AU) stake highlight the underlying value.

• In a Musk/Twitter-like on/off/on-again situation, Link Administration (LNK AU) announced it received an improved offer for its corporate markets and Banking & Credit Management (BCM) businesses from Dye & Durham.
• Separately, Link is working with the Australian Tax Office on the in-specie distribution of a minimum of 80% of Link’s holding into PEXA Group (PXA AU).
• Preceding my comments on Link are the current setup/unwind tables for Asia-Pacific Holdcos. These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

• KOSDAQ 150’s December rebalancing will feature seven regular changes and two special entries.
• Among the additions, we should focus on Dear U and ISC, which have a balanced level of liquidity and flow, rather than those theme stocks with high volatility.
• As for Nature Holdings, Eoflow, and Nextin, I suggest a more aggressive entry point due to low trading volume. Then, I’d basket-trade the deletions on equal weight.

• On 4 October, it was reported that Samsung Electronics (005930 KS) has set up a task force to raise shareholder value of the company.
• This task force was formed at the order of Samsung’s Vice Chairman Lee Jae-Yong.
• All in all, a major share buyback and cancellations coupled with higher dividends could result in a share price turnaround for Samsung Electronics. 

• PICC Property & Casualty H (2328 HK) is a potential replacement for XPeng (9868 HK) at the December rebalance of the FTSE China 50 Index.
• There are a couple of index constituents that are close to the deletion threshold rank and that could drive two more changes. The review cutoff date is 21 November.
• Tianqi Lithium (9696 HK) will be eligible for index inclusion if it is added to the FTSE All-World Index in December – we have that as a high probability event.

• 1P/Ord LONG/SHORT betting on a 1P-skewed buyback does not look very desirable. The Lee family’s financial needs are short-term, so there is no need for a 1P-skewed buyback.
• Given that the 1P discount rate has stabilized again, a strategy betting on the mean reversion does not seem very timely either.
• We should look at the possibility that false expectations for a special year-end dividend will further deepen futures backwardation. This situation can lead to quite a juicy spot/futures spread opening.

• On 8 September, I went over the Oisix ra daichi (3182 JP) bid for the stake in Shidax Corp (4837 JP) held by Unison Capital. 
• The founding Shida family had a deal whereby when the company raised capital years ago, the family had ROFR to buy or nominate a buyer of the Unison stake.
• The problem? Shidax’ independent board said this was unfair to minorities. The back and forth has continued but there may now be hope for a better deal. 

• The Additional Acceptance Period ended on 29 September. On 3 October, FEMSA announced the satisfaction of all conditions. On 5 October, FEMSA announced that its participation amounts to 96.87%.
• Settlement will occur on 7 October. FEMSA intends to initiate a squeeze-out procedure and delist the Valora shares from trading on SIX Swiss Exchange.
• The tender was good news for shareholders. My TP is CHF 252.2/share, therefore I believe the offer is fair and there was no counterbid. 

• On Friday, Toshiba investors got two bits of news which have been taken as non-bullish.
• Affiliate and former subsidiary Kioxia (6600 JP) announced it would cut wafer input volume by 30% starting in October, and Toshiba’s announcement on the Privatisation process status implied some delay.
• Today the shares are getting hit vs Peers. It’s still a problem of lots of moving parts. 

• We see 4 potential inclusions to the FTSE All-World and All-Cap indices that will be implemented at the close of trading on 16 December.
• There are a couple of other recent listings that are close to the investable market cap threshold and could be added to the All-Cap index.
• Given the lack of IPO in the April to August period, the rebalance will be quieter than usual though lock-up expiries will keep things interesting.

• Saudi Arabia’s Savvy Games Group has a grand ambition to invest in the global gaming industry. It recently announced that it will invest US$37.8 billion in the global gaming industry.
• There has been a sharp appreciation of the USD and Riyal versus JPY which could help to accelerate more M&As of Japanese game companies by SGG.
• Saudi Arabia’s aggressive push to expand into the global gaming industry could aid this sector in the coming months as it could result in further major M&As in this sector.

• Stock has fallen 17% since Sep 15th, and implied vols have picked up
• The fundamentals remain strong and tech momentum may be shifting
• We suggest two directional trades using options to play earnings

• O2Micro International (OIIM US), an integrated circuits play, has announced a definitive privatisation transaction.
• The acquirer, led by the CEO and CFO of O2Micro, are offering US$5.00/ADS, a 68.9% premium to the undisturbed price. 
• The Offer requires shareholders representing at least two-thirds of O2Micro vote FOR. Roughly 30% of shares out appear to be supportive. This Offer is expected to close in the 1Q23.

• O2Micro International (OIIM US) entered into a definitive agreement for going private with FNOF Precious Honour Limited at US$5.00 per ADS, a 54.8% to the undisturbed price (17 March).
• Shareholders representing two-thirds of shares present and voting need to approve the deal. The rollover shareholders represent 16.90% of voting rights.
• The offer is attractive in the context of O2Micro’s weakening performance and grim market conditions. At the last close, the gross spread is 18.2%. Expect a 1Q23 deal close.

• In early Jun 2022, Alipay raised around US$386m via selling 3.3% of outstanding shares of Kakao Pay (377300 KS). That was the first selldown by Alipay  (Alibaba (ADR) (BABA US)).  
• Despite pricing the shares at an enticing 11.8% discount to last close, the stock failed to hold the deal price and hasn’t looked back since.
• In this note, we will talk about the previous deal and the upcoming lockup expiry.

• K Car’s major shareholder is Hahn & Company, which has already fully recovered the initial investment. So, there is an actual probability that it will make an aggressive exit.
• SingEel’s 3-month IPO institutional and VCs will be released, 6.18% of SO. All of them are in a profit zone, there is a possibility that an aggressive overhang will occur.
• Kakao’s 47% holdings in Kakao Pay will be released. The possibility of lowering the stake seems quite low. Nevertheless, we must consider the risk that this will affect market sentiment.

• EVOC Intelligent Technology Company Limited H (2308 HK)‘s H Shareholders’ class meeting is scheduled for 19 October. The IFA considers the offer to be fair and reasonable.
• The key conditions are approval by at least 75% of independent H Shareholders (<10% of all independent H Shareholders’ rejection). There is no minimum acceptance condition.
• The offer is attractive and should gain approval. At last close and for a 7 November payment, the gross and annualised spread to the offer is 2.9% and 26.0%, respectively. 

• Tassal (TGR AU)‘s scheme meeting is scheduled for 3 November. The IE considers the A$5.23 per share offer fair and reasonable.
• The key condition is approval from shareholders – headcount test and approval by at least 75% of the votes cast on the scheme resolution. Cooke has received FIRB approval.
• We continue to think that offer is attractive. At the last close price and for the 21 November implementation date, the gross and annualised spread is 1.2% and 8.8%, respectively.

• Friday post-close, Idemitsu Kosan (5019 JP) announced a deal to buy out subsidiary Toa Oil Co Ltd (5008 JP). Cornwall has agreed to tender, so it’s a done deal. 
• This is at ¥3,150/share, which is nearly 30% higher than the bid 21 months ago, where Cornwall bought enough to block, but it is a disappointing outcome for governance.
• A clearly problematic tolling agreement with the parent, and what could be ¥100bn of excess land value are ignored. Minority investors get hosed. One of the problems of minority investments.

• Historically, when Swire (B) (87 HK) / Swire (A) (19 HK) gets more than 6% from 3mo Avg VWAP Ratio, there is statistically significant reversion. We are now at 6.8%. 
• The SATS (SATS SP)  / WFS transaction appears all stitched up with major shareholder Temasek backing the deal. The acquisition is expected to close in 1Q23, subject to regulatory clearance.   
• We had the heads up days (or a week plus) ago, and now it is official. Bain has now launched its Tender Offer for Hitachi Metals (5486 JP) at ¥2,181/share.

• On Friday, post-close, there was a flurry of excitement as YFO put out a press release amending the start date of the planned Tender Offer to early November.
• Not long after, there was another release by Toyo Construction (1890 JP) itself. 
• You have to read both for what they are. And as they say…. Get your programs here!

• The data in this insight is collated from the “shareholding disclosure” link on the HKEx website.
• Often there is a corresponding HKEx announcement on the increase – or decrease – in the shareholding by directors. However, such disclosures are by no means an absolute. 
• These insights may also flag those companies where shares have been pledged. Stocks mentioned include Swire Pacific (B) (87 HK), Joinn Laboratories (H) (6127 HK), and Techtronic Industries (669 HK).

• Last week we had the implementation of the first two tranches of the Nikkei 225 (NKY INDEX) rebalance with the third tranche to be implemented at the close on Monday.
• Thursday saw the NIFTY indices implementation while Friday marked the end of the review period for the December rebalance of the Hang Seng family of indices.
• There were large inflows to China, Taiwan, Korea and Hong Kong ETFs during the week while there were some outflows from Japan.

• There are 49 – 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 were discussed this week: Boyu’s Offer for Jinke Smart Services (9666 HK);  Chinachems’s Offer for Pine Care (1989 HK), & Accenture Japan bid for ALBERT (3906 JP).
• Key updates took place for Hitachi Metals (5486 JP) and MACA Ltd (MLD AU) .

• For the month of September, 11 new deals (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$3bn.
• The average premium for the new deals announced (or first discussed) in September was ~40%, and a year-to-date average of 39%.
• This compares to the average premium for all deals in 2021 (165 deals), 2020 (158 deals), and 2019 (145 deals) of 33%, 31%, and 31.5% respectively.

• Edizione/Blacktone have obtained clearances from Bank of Italy and Bank of Spain regarding their voluntary takeover offer for Atlantia. Once the Consob approves the prospectus the offer can be launched.
• The offer period should start in October and should be completed after 40 working days, with settlement by the end of November, and delisting by the end of the year.
• Gross spread is 1.13%, 7.06% annualised return assuming settlement by 30 November. Long ATL IM.

• SATS (SATS SP) has announced that it is buying Worldwide Flight Services (WFS) from an affiliate of Cerberus Capital Management at an Enterprise Value of €2.25bn (S$3.107bn).
• The cash consideration is €1.187bn (S$1.639bn) and will likely be financed by an equity fund raising. This could be a rights issue and could be combined with a private placement.
• Expect the stock to drop once it resumes trading. A significant drop from current levels could provide a buying opportunity as the rights issue could be backstopped.

• Earlier today, Bilibili (9626 HK) announced the voluntary conversion of its Secondary Listing on the HKEX (388 HK) to a Dual Primary Listing effective 3 October.
• Though the timing is tricky, this could result in the stock not being deleted from the Hang Seng China Enterprises Index (HSCEI INDEX) at the December rebalance.
• This could also lead to inflows at the December rebalance from Hang Seng China Enterprises Index (HSCEI INDEX) and Hang Seng Tech Index (HSTECH INDEX) trackers.

• SATS (SATS SP) agreed to acquire Worldwide Flight Services (WFS), the world’s largest air cargo handling firm, from Cerberus Capital for a cash consideration of S$1,639 million. 
• The base funding plan is based on a S$1.7 billion equity raise. The uncertain structure and timing of the equity raise will be a short-term overhang. 
• The acquisition is conditional on shareholder and regulatory approvals. Assuming no synergies, our pro-forma price per share is S$4.97, a 28.5% upside to the last close.

• Jasmine International (JAS TB)  is in the home straight to sell its 99.8% interest in Triple T Broadband (TTTBB), and 19% stake in  Jasmine Broadband Internet Infrastructure Fund (JASIF TB).
• With Bt 32.4bn in proceeds coming through the door, JAS would have net cash of ~Bt 24.8bn against a current market cap of ~Bt 24bn.
• This sounds like a situation worth a second look. So I look.

• There was a substantial increase in the AUM even in the current market condition. More funds must have sought blue chip stocks as relatively safe assets in this volatile market.
• Celltrion and LG Energy Solution will likely replace KB Financial and Shinhan Financial. On the other hand, POSCO is out of the race even with a +5%p float rate change.
• LG Energy also has an up-weight event of the KOSPI 200. Since these passive flow events have an interval of only one day, we expect a fairly concentrated passive impact.

• In this insight, we take a look at the names leading the race to become ADDs/DELETEs for the DAX, MDAX, and SDAX Indices.
• Based on current share prices, there are no changes for the DAX index. However, there could be multiple changes for the MDAX and SDAX indices.
• I have also discussed the index implications for the Porsche AG (P911 GR) IPO.

• ECP lowers its initial offer to 410p/share in cash plus the final dividend of 4.69p/share (28% premium, implied equity value is €1,269 million, implied EV is €1,847 million).
• The offer represents 1.2x EV/Fwd revenue, 8.3x EV/Fwd EBITDA and 32.1x Fwd P/E. Suez was taken at similar multiples: 1.5x, 8.1x and 27.4x respectively. My updated fair value estimate (DCF-based) is 410.6p.
• The equity value prior to approach was undemanding. The offer price seems fair. Gross spread (including final dividend) is 2.1%. Reiterate Long BIFF LN.

• GBP depreciation and UK mini budget have triggered a spike in volatility to decade highs
• Currency vol is trading at extreme levels vs Equity vol offering trade opportunities
• FTSE100 is trading cheap and we suggest a smart way to play upside