Category

Event-Driven and Index Rebalance

Jan 21
0

Weekly Top Ten Event-Driven and Index Rebalance – Jan 21, 2024

By | Event-Driven and Index Rebalance
This weekly newsletter pulls together summaries of the top ten most-read Insights across Event-Driven and Index Rebalance on Smartkarma.

Receive this weekly newsletter keeping 45k+ investors in the loop

SUBSCRIBE FOR FREE

1. S&P/​​​​​​​​​ASX Index Rebalance Preview: Lots of Changes; A$1bn to Sell in Newmont

By Brian Freitas, Periscope Analytics

  • With over 80% of the review period complete, there could be 26 adds/deletes across the S&P/ASX family of indices in March.
  • The largest flow will be on Newmont (NEM AU) due to the potential S&P/ASX 20 Index deletion and a large decrease in the number of shares held in Australia.
  • There will be 1.2-38 days of ADV to buy in the inclusions while the impact on the deletions will range between 1-21 days of ADV.

2. Benefit One (2412): The Plot Thickens

By Travis Lundy, Quiddity Advisors

  • Today, the day before the previously extended M3 Inc (2413 JP) Partial Tender Offer for Benefit One Inc (2412 JP) was due to expire, M3 extended it another 20 days.
  • Dai Ichi Life Insurance (8750 JP) several days ago extended their expected start date by weeks – from mid-January to early February. 
  • The wording in the new document from M3 is curious. It bears examination. As does the strategy positioning and choice of each of the participants. 

3. KOSPI200 Index Rebalance Preview: Four Potential Changes in June

By Brian Freitas, Periscope Analytics

  • Less than halfway through the review period, we see four changes for the Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) at the June rebalance.
  • The impact on the potential inclusion ranges from 0.14-6 days of ADV while the impact on the potential deletions varies from 3.6-12 days of ADV.
  • There are small shorts on the potential inclusions while short interest on the potential deletions varies from 5-10 days of ADV and 1.7-8.2% of free float.

4. Bud APAC (1876 HK): Nursing a Hangover; Now Comes a Passive Overhang

By Brian Freitas, Periscope Analytics

5. KOSDAQ150 Index Rebalance Preview: Potential Adds Soaring; Short Sell Ban Not Helping

By Brian Freitas, Periscope Analytics

6. Hang Seng Internet & IT Index Rebalance Preview: ZX Inc Could Replace Flowing Cloud

By Brian Freitas, Periscope Analytics

7. Japan – Increasing Shorts on Some Interesting* Stocks; Positioning Appears Light

By Brian Freitas, Periscope Analytics

  • Some stocks have continued to underperform the Nikkei 225 (NKY INDEX) and their peers and could be deleted from global passive portfolios next month.
  • Stocks that were expected to be deleted (but could now be safe) have outperformed the Nikkei 225 (NKY INDEX) over the last couple of weeks.
  • There has been two-way flow in a lot of stocks with market participants increasing and covering short positions as the stock prices have moved around.

8. Merger Arb Mondays (15 Jan) – Shinko Electric, Benefit One, T&K Toka, Taisho, IJTT, IRC, Weiqiao

By Arun George, Global Equity Research Ltd

9. Fuji Soft (9749) – Much Better Governance Process But The Stock Has Run Too Far

By Travis Lundy, Quiddity Advisors

  • After 3D Investment Partners bought a large slug of Fuji Soft Inc (9749 JP) in early 2022, the company started a review of governance and capital allocation. 
  • The company updated investors in August, and bought in 4 listed subs in November-December 2023. The August update suggested a Q1 2024 decision on use/ownership of real estate.
  • The Final Report is due in a month. In the meantime, the stock rallied Friday off a news article suggesting the Board was reviewing take-private proposals. Yes, but…

10. Quiddity Leaderboard STAR 50 Mar 24: Three Changes; ~US$1bn One-Way; Some Trade Ideas

By Janaghan Jeyakumar, CFA, Quiddity Advisors

  • STAR 50 Index is a tech-focused, blue-chip index in Mainland China which tracks the top 50 largest and most liquid names in the STAR market of the Shanghai Stock Exchange.
  • In this insight, we take a look at our expectations for potential ADDs and DELs for the STAR 50 index during the March 2024 index rebal event.
  • I currently expect three changes for the STAR 50 index in March 2024.
Jan 14
0

Weekly Top Ten Event-Driven and Index Rebalance – Jan 14, 2024

By | Event-Driven and Index Rebalance
This weekly newsletter pulls together summaries of the top ten most-read Insights across Event-Driven and Index Rebalance on Smartkarma.

Receive this weekly newsletter keeping 45k+ investors in the loop

SUBSCRIBE FOR FREE

1. LQ45 Index Rebalance Preview (Jan): Reading the Tea Leaves

By Brian Freitas, Periscope Analytics

  • The review period for the LQ45 Index ended on 29 December. The changes should be announced in the last week of January, becoming effective after the close on 31 January.
  • Based on the index methodology, there could be up to 5 changes at the rebalance. Plus there will be capping changes for Bank Rakyat (BBRI) and Bank Central Asia (BBCA).
  • The impact of passive trading will be higher on the deletions than the inclusions since lower liquidity stocks are replaced with higher liquidity stocks.

2. March 2024 Nikkei 225 Rebal:  Socionext, Disco, and a Consumer Goods Stock, Still

By Travis Lundy, Quiddity Advisors

  • No changes in the rankings since last time. Socionext (6526), Disco (6146), and a Consumer Goods stock (Zozo (3092) top-ranked, Ryohin Keikaku (7453) a better choice) are ADDs.
  • The DELETEs are still Takara Holdings (2531), Pacific Metals (5541), Sumitomo Osaka Cement (5232) with a dark horse candidate in Hitachi Zosen (7004) to replace Takara.
  • There is the upweight to Nitori (9843) but now less funkiness with Fast Retailing (9983). But it will continue being an interesting Nikkei 225 influence (for years to come).

3. Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for March

By Brian Freitas, Periscope Analytics

  • At 82 index constituents currently, we expect the index committee to progress towards reaching 100 constituents. We are (highly) unlikely to reach the target this calendar year though.
  • We highlight nine stocks that have a decent chance at being added to the index over the next couple of rebalances. All companies are profitable and meet inclusion requirements.
  • The market consultation on proposed changes to the Hang Seng Industry Classification System (HSICS) could lead to more inclusions from the Information Technology sector from the June rebalance.

4. TOPIX Inclusions: Who Is Ready (Jan 2024)

By Janaghan Jeyakumar, CFA, Quiddity Advisors

  • Quiddity’s “Who is Ready” series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.
  • Furuya Metal (7826 JP) and Visional (4194 JP) are expected to be included in the TOPIX index at the end of January 2024
  • There are couple of other pre-event names that we have been tracking for the past few months.

5. Inabata & Co (8098) – LARGE Equity Secondary Offering by Sumitomo Chemical

By Travis Lundy, Quiddity Advisors

  • On Friday after the close, Inabata & Co (8098 JP) announced Sumitomo Chemical (4005 JP) would sell down a large stake in a ~$200mm secondary equity offering. 
  • Mizuho Bank’s Retirement Benefit Trust account sells down too. Sumitomo Chem will keep 10+% and other crossholders remain. 
  • This is “big” at 80 days of ADV with limited early index demand, but a 10% fall would make this cheap enough to buy vs Peers.

6. Taisho Pharma (4581) – Slouching Activism May Not Get This Bumped

By Travis Lundy, Quiddity Advisors

  • Six+ weeks ago, the founding family which controls a 33% stake in cash-rich Taisho Pharmaceutical Holdin (4581 JP) announced a Tender Offer MBO to buy out minorities.
  • ¥8,620/Share is 0.85x PBR but the takeover is at 0.72x operating assets with net debt at zero That’s low – comps are 2+x book and twice the EV/EBITDA ratio.
  • But the scourge that is cross-holding investors blindly following management means they have 61-63% before this gets started, and only one small firm has voiced an objection.

7. A/H Premium Tracker (To 5 Jan 2024):  STAY Long Hs Vs As: A Premia Still Wide, High Div SOEs Moving

By Travis Lundy, Quiddity Advisors

  • The New and Better (5mos old) A-H Premium Tracker has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning/volatility in pairs over time, etc.
  • SOUTHBOUND flows flat/light and NORTHBOUND flows a significant net buy, respectively, but liquid Hs with H/A pairs OUT-perform As on average by 200+bp.
  • STILL time to go long Hs vs As for the new year. 52wk wide discounts were just last week. Wide A/H premia in renewables space look vulnerable.

8. Event Trading on KOSPI Transfer Listings: Notable Post-Listing Price Patterns

By Sanghyun Park, Clepsydra Capital

  • In the past year, four KOSPI transfer listings showed similar patterns, with pre-listing price increases and substantial corrections in the first five trading days post-listing.
  • ChatGPTAmid a sideways market and a 54.2% YoY growth in the local ETF market last year, the impact of passive flow imbalances may have been more significant than before.
  • A key factor is the short-selling ban. Posco DX’s SSFs showed significant backwardation pre-KOSPI listing, concentrating proactive short positions, requiring caution in adjusting pre-listing short position costs.

9. Offshore China ETFs Rebalance Preview: Two Changes Expected in March

By Brian Freitas, Periscope Analytics

10. T&K TOKA (4636 JP): Expect ANOTHER Blandiloquent But Bletcherous Bump From Bain

By Travis Lundy, Quiddity Advisors

  • In August when Bain announced that it would launch a Tender Offer for T&K Toka Co Ltd (4636 JP) I suggested in my first piece it was the wrong price. 
  • I suggested it needed another ¥1,000 added onto the price. If the ¥1,300 price Dalton initially indicated seemed low to T&K TOKA, another ¥100 doesn’t seem right.
  • It took time. Now it looks like a tender offer launch is imminent. The stock has traded through terms for almost 5 months, but not by a lot.
Jan 07
0

Weekly Top Ten Event-Driven and Index Rebalance – Jan 7, 2024

By | Event-Driven and Index Rebalance
This weekly newsletter pulls together summaries of the top ten most-read Insights across Event-Driven and Index Rebalance on Smartkarma.

Receive this weekly newsletter keeping 45k+ investors in the loop

SUBSCRIBE FOR FREE

1. HSCI Index Rebalance Preview and Stock Connect: Potential Changes in March

By Brian Freitas, Periscope Analytics

  • We see 30 potential adds (including plenty of new listings) and 28 potential deletes (on market cap and liquidity) for the Hang Seng Composite Index in March.
  • We expect 26 stocks to be added to Southbound Stock Connect following the rebalance while 25 stocks could be deleted from the trading link and become Sell-only.
  • There are stocks that have a very high percentage of holdings via Stock Connect and there could be some unwinding prior to the stocks becoming Sell-only.

2. Allkem + Livent = Arcadium : Updated Expected Index Flows

By Travis Lundy, Quiddity Advisors

  • Allkem Ltd (AKE AU) saw its last day of trading on 21 December. There was large volume at the close as one major index provider gave it the boot. 
  • Another delayed their treatment at the last minute, and eliminated a cross-flow.
  • But there is still a lot of net buy flow tomorrow (3 Jan) and the next day in the US. Perhaps more than I expected. 

3. Korea’s Short Selling Ban to Stay, Likely Until EquiLend-Korean Version Launch

By Sanghyun Park, Clepsydra Capital

  • Local market information indicates potential collaboration between KRX, FSS, and KSD to create a Korean EquiLend, aiming to centralize the stock lending channel.
  • Unprecedented globally, President Yoon aims to centralize short selling. The challenge lies in mandating foreign investors to use Korea’s platform, necessitating a complex legal framework.
  • Despite the difficulty, local authorities are compelled to pursue this initiative, raising the likelihood of a Korean EquiLend. Developing strategic plans in response is imperative.

4. KRX New Deal Index Rebalance Preview: Changes with Flow & Impact

By Brian Freitas, Periscope Analytics

5. HSCEI Index Rebalance Preview: Zhongsheng (881 HK) Should Go This Time

By Brian Freitas, Periscope Analytics

  • Zhongsheng Group (881 HK) pops up as a potential deletion yet again and a much lower rank raises the probability of deletion to just short of a near certainty.
  • With BeiGene (6160 HK) failing the Velocity Test for Tradeable Indexes, Zhongsheng Group (881 HK)‘s deletion from the index should result in China Unicom Hong Kong (762 HK)‘s inclusion. 
  • Estimated one-way turnover at the rebalance is 1.47% resulting in a one-way trade of HK$946m. Passives will need to trade over 2.5x ADV on both stocks.

6. New Year New NISA Accounts – It’s BIG, But Not so Big

By Travis Lundy, Quiddity Advisors

  • The Kishida administration put out a Doubling Asset-Based Income Plan in 2022. The goal? To get cash savings (corporate/individual) into growth assets and increase asset-based return contribution to income.
  • The goal included doubling the number of NISA accounts, and the amount invested in the next five years. On 1 January 2024, NEW NISA account contribution totals were trebled.
  • If accounts double, and contribution totals treble, and exemptions are now permanent, investment doubling is a quasi-certainty. The question is how it turns into income-producing assets. That’s MUCH tougher.

7. NIFTY NEXT50 Index Rebalance Preview: Potential Adds Skyrocketing

By Brian Freitas, Periscope Analytics

  • Nearing the end of the review period, we see 6 potential changes for the NSE Nifty Next 50 Index (NIFTYJR INDEX) using the current index methodology.
  • Estimated one-way turnover is 13.9% resulting in a one-way trade of INR 26.9bn. There will be more than 1.5x ADV to sell on nearly all deletes.
  • The potential adds have outperformed the potential deletes by 35% over the last two months and some stocks are looking extremely frothy.

8. Merger Arb Mondays (01 Jan) – Weiqiao Textile, IRC, IJTT, JSR, Shinko Electric, Hollysys, OreCorp

By Arun George, Global Equity Research Ltd

9. NIFTY50 Index Rebalance Preview: One Change, Maybe Two, Low Probability of Three

By Brian Freitas, Periscope Analytics

10. NIFTY Bank Index Rebalance Preview: Canara Bank Could Replace Bandhan Bank

By Brian Freitas, Periscope Analytics

Dec 31
0

Weekly Top Ten Event-Driven and Index Rebalance – Dec 31, 2023

By | Event-Driven and Index Rebalance
This weekly newsletter pulls together summaries of the top ten most-read Insights across Event-Driven and Index Rebalance on Smartkarma.

Receive this weekly newsletter keeping 45k+ investors in the loop

SUBSCRIBE FOR FREE

1. Fujitsu General (6755) – Fujitsu Wants Out, May Force the Issue

By Travis Lundy, Quiddity Advisors

  • In 2019, it became apparent Fujitsu Ltd (6702 JP) wanted to sell down its stakes in non-core businesses (Shinko Electric, Fujitsu General, and FDK), and move on to better things.
  • In early January 2023, a Bloomberg article suggested a sale process. A 20 Jan 2023 article suggested Fujitsu General’s auction was imminent. I wrote a piece. It was not bullish.
  • The stock rose a bit, then fell 40+% through last week. Now another article suggests some urgency at Fujitsu. That changes things.

2. Japan – Increasing Shorts on Some Interesting Stocks

By Brian Freitas, Periscope Analytics

  • There are a bunch of stocks that have underperformed the Nikkei 225 (NKY INDEX) and their peers and could be deleted from global passive portfolios early next year.
  • The deletion from passive portfolios will lead to a liquidity event at the end of February where passive trackers will need to sell multiple days of ADV.
  • Shorts have started to increase on some of the stocks and there will be further positioning as we near the liquidity event.

3. IJTT (7315 JP) – Truly Offensive Takeover Price Gets Bumped, Offensively

By Travis Lundy, Quiddity Advisors

  • IJTT Co., Ltd. (7315 JP) was perhaps one of the lower-priced parent takeovers (Isuzu remains central to the bidder post-buyout) at 0.46x book. Today, the last day, it got bumped.
  • The new price is ¥850/share vs ¥812/share. +4.7% and a whopping 0.48x book now. ¥850 is where the stock traded just before the announcement. It immediately jumped to ¥875/share.
  • It appears Isuzu is not getting any more money out of this, but they should be OK. They are buying back in at 0.48x book. With leverage. 

4. Kum Yang: Announces Its Shares Will Be Listed on the US Stock Market Through ADRs

By Douglas Kim

  • On 27 December, Kum Yang announced that its shares will be listed on the US stock market in the form of DRs, resulting in its shares rising by 11.7%.
  • The listing of Kum Yang ADRs is likely to have a short-term positive impact on its share price as this is likely to reduce free float of local common shares.
  • Nonetheless, over the next 6-12 months, we expect Kum Yang’s share price to trade much lower (30% or more) as its shares are highly overvalued. 

5. SBI To Buy Gumi (3903) Shares To Up Stake to Near 30% (And Try To Avoid Impairment)

By Travis Lundy, Quiddity Advisors

  • Today after the close, SBI Holdings (8473 JP) made an announcement it would buy (up to) 3.0mm shares of Gumi Inc (3903 JP) shares between tomorrow and end-March 2024.
  • SBI already owns 8.8mm shares, and this would bring them close to 30.0%. 
  • SBI did not specifically say they would buy on market, but the next 400,000 shares would require a large shareholder filing amendment. 

6. Meldia DC (1739 JP) – Open House Group Cleans Up Sanei Architecture Sub in TOB.

By Travis Lundy, Quiddity Advisors

  • Open House (3288 JP) took over Sanei Architecture Planning (3228 JP) this past autumn when banks forced the issue over the former CEO/owner’s mafia ties discovered in an investigation.
  • Seedheiwa (1739 JP) now better known as Meldia DC, is ~60% held by Sanei Architecture Planning, and 3% by Mr Koike. It has debt. So it needs cleaning up too.
  • This is too light for minorities, and even lighter for whole co, but it’s a done deal. 

7. StubWorld: Swire Pac Trading “Rich” As Props Announces Big Write-Down

By David Blennerhassett, Quiddity Advisors

  • Swire Pacific (19 HK)‘s NAV discount has narrowed, and implied stub widened, after announcing its latest buyback. Separately, Swire Properties (1972 HK) flagged a HK$4.5bn writedown on its investment property.
  • Preceding my comments on Swire 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%.

8. Investigating the Use of SSF Listing Events as Fresh Flow Trading Opportunities in Korea

By Sanghyun Park, Clepsydra Capital

  • The spot prices of the newly listed SSFs generally exhibited a notable upward trend. This trend was consistently more pronounced in KOSDAQ-listed stocks compared to KOSPI-listed ones.
  • Various factors, including actions by ETF operators, may contribute. Their SSF purchases could deepen contango, leading to temporary spot price increases through arb spread seekers anticipating this development.
  • We should focus on a potentially consistent price pattern persisting before a sufficient learning effect accumulates. The tight schedule after July increases the likelihood of similar opportunities next March.

9. IRC Limited (1029 HK): A Wide Spread as the Conditional Offer Opens

By Arun George, Global Equity Research Ltd

  • The Irc Ltd (1029 HK) IFA opines that a mandatory conditional offer from Nikolai Levitskii (Chairman and 30.61% shareholder) at HK$0.118 per share is fair and reasonable. 
  • The offer is open, with the first closing date of 12 January 2024. The offer is conditional on the offeror and concert parties representing more than 50% of voting rights. 
  • While the offer is light, satisfying the minimum acceptance condition is possible. The risk/reward profile is favourable as the upside (25.5% spread) outweighs the downside (5.3% to the undistributed price). 

10. Merger Arb Mondays (25 Dec) – JSR, Benefit One, IRC, Adbri, Link, A2B, Probiotec, Lithium Power

By Arun George, Global Equity Research Ltd

Dec 24
0

Weekly Top Ten Event-Driven and Index Rebalance – Dec 24, 2023

By | Event-Driven and Index Rebalance

1. Allkem+Livent=Arcadium : Expected Index Flows

By Travis Lundy, Quiddity Advisors

  • Yesterday during the day, Allkem Ltd (AKE AU) shareholders approved the Scheme and Livent (LTHM US) shareholders approved the merger. The deal is done. Allkem last trades 21 Dec.
  • NEWCO starts trading 4 January in the US but the Arcadium Lithium CDIs start trading 22 Dec in Australia. S&P/ASX announced they will replace Allkem in the ASX200.
  • But I have been asked for a breakdown of flows and timing again, so I have put it into a handy table which I hope makes it less confusing.

2. Dai-Ichi Life “Decides” Tender Offer Price and Buyback Price at ¥2,123 and ¥1,491/Share

By Travis Lundy, Quiddity Advisors

  • Today, Dai Ichi Life Insurance (8750 JP) came out with a cover letter and an amended Announcement of Intention to Commence a Tender Offer on Benefit One Inc (2412 JP). 
  • The cover letter says they have obtained information from Pasona Group (2168 JP) and Benefit One allowing them to calculate a Tender Offer of ¥2,123/share for minorities, and buyback at ¥1,491/share. 
  • Now we wait. Again. Dai-Ichi Life “intends” to start a tender in mid-Jan 2024 (19 Jan likely earliest start possible) but it is not clear timing will come that early.

3. Allkem/Livent Merger Vote Tomorrow: Will Vote Get Past?

By Travis Lundy, Quiddity Advisors

  • The vote is tomorrow. It is slightly contested. Shareholder proxies have recommended approving. Some others say Allkem is going too cheap. 
  • It probably should get done because of scale benefits, and if it breaks, it might be good for Allkem, which is “good risk arb risk”
  • But the trade here is some combination of lithium rebound and index event, with index impact details here.

4. A/H Premium Tracker (To 15 Dec 23): Time To Go Long Hs Vs As.

By Travis Lundy, Quiddity Advisors

  • The New and Better (5mos old) A-H Premium Tracker has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning/volatility in pairs over time, etc.
  • SOUTHBOUND and NORTHBOUND flows were both sells, respectively, but liquid Hs with H/A pairs OUT-perform As on average by 100+bp. Liquidation by overseas investors feels finished. 
  • Time to go long Hs vs As for the new year at 52wk wide discounts. 3 Short H/A pairs now switched to long. 3 new pairs long this week. 

5. JSR (4185) – Deal Approval Unexpectedly Delayed, As Expected

By Travis Lundy, Quiddity Advisors

  • Today after the close, JSR Corp (4185 JP) announced that the expected “end-December” commencement of JIC’s Tender Offer to take the company private would be delayed. 
  • This was somewhat expected to widely expected based on initial FUD which then gave way to “specialised reporting” a couple of weeks ago which indicated as much.
  • Here I look at potential implications, spreads, and risks. And it still looks like one has to let it run (and buy a dip).

6. Kurabo (3106) – Bigly Buyback And Share Cancellation for A Valueful Value Trap With Hidden Value

By Travis Lundy, Quiddity Advisors

  • Kurabo announced a bigly buyback on Tuesday. At last price it is equivalent to 8+% of shares out. Most likely to target buybacks from cross-holders. 
  • The company is not cash-rich, but it is financial asset and real estate-rich. And it trades at cheap multiples without even thinking about those assets (themselves worth the market cap).
  • The TSE’s “PBR1 OR BUST” movement combined with starting low valuation, high payout, excess assets, mean this value trap has room to move. 

7. Arb Trading with Stock Rights in Korea: A Basic Guide Featuring LG Display Offering

By Sanghyun Park, Clepsydra Capital

  • Unlike typical Korean stock rights arbitrage, LG Display’s significant equity offering and active stock futures trading anticipate a spread opening, akin to the recent Hanwha Ocean scenario.
  • In contrast to Hanwha Ocean, the absence of major sellers, like KDB, sets this event apart. LG Electronics, the major shareholder with a 37.9% stake, intends to participate.
  • Despite differences from Hanwha Ocean, LG Display’s high retail shareholder presence implies a substantial likelihood of stock rights overhang, even without players like KDB.

8. Yuanta/​P-Shares Taiwan Div+ ETF: Day 1 Flows & Stock Moves

By Brian Freitas, Periscope Analytics

  • The Yuanta/P-shares Dividend Plus ETF (0056 TT) started to rebalance its holdings on Friday and will continue to do so for the next 4 trading days.
  • Stocks with buy flows dropped 0.51% on average on Friday while the stocks with sell flows dropped 0.92%. On a flow weighted basis, the numbers were -0.21% vs -0.75%.
  • Since the start of November, the adds have outperformed the deletes and the TWSE INDEX. There has been significant outperformance in just the last week.

9. Toyo Construction (1890) – Everyone Hits Pause

By Travis Lundy, Quiddity Advisors

  • In September, YFO (Yamauchi Family Office) upped its Tender Offer proposal to ¥1,255/share. YFO presented. The Toyo Special Committee met, interviewed, examined, deliberated, then last week rejected YFO’s proposal. 
  • The rejection was a three-parter. First, they rejected YFO for not bringing management/ownership experience. Second, they said the proposal didn’t add enough value. Third, the price was too low.
  • There were no metrics against which to measure anything. And now Toyo has apparently decided to withdraw its Tender Offer Proposal.

10. Comprehensive List: 359 Companies on KOSPI & KOSDAQ Deferring Yearend Dividend Record Dates

By Sanghyun Park, Clepsydra Capital

  • The data is crucial for year-end dividend arbitrage. We can strategically target Single-stock futures’ spread basis widening due to information timeliness disparities, focusing on companies with high dividend yields.
  • Furthermore, it offers valuable insights into assessing the December-March spread levels, potentially leading to a rollover distortion in KOSPI 200 futures’ calendar spread trading.
  • Postponed yearend dividend record dates to March may clash with first-quarter dividends, offering a new trading opportunity. this unique situation could significantly impact spot and futures prices.

Weekly Top Ten Event-Driven and Index Rebalance

Receive this weekly newsletter keeping 45k+ investors in the loop

JOIN FREE


Dec 17
0

Weekly Top Ten Event-Driven and Index Rebalance – Dec 17, 2023

By | Event-Driven and Index Rebalance

1. JIC Consortium Possibly In Line to Win Shinko At “¥800bn”, Which Makes You Go 🤔…

By Travis Lundy, Quiddity Advisors

  • A Nikkei article today suggested that Fujitsu had granted preferential negotiating rights to buy Shinko Electric Industries (6967 JP) to a JIC-led consortium (including DNP and Mitsui Chem) for ~¥800bn.
  • This happened late in the afternoon session. Shares spiked 5+%, then were halted. A gray market ensued. 
  • A Bloomberg article provided more info, and the same info nuanced slightly differently. The wording in yet other articles was interesting enough that it is worth discussing. 

2. Bain Deal for Outsourcing (2427): Cheeky, Opportunistic, Too Low

By Travis Lundy, Quiddity Advisors

  • On Friday 8 December, Bain announced an MBO with Outsourcing Inc (2427 JP) Chair Haruhiko Doi to take the company private at a 51% premium. Looks good at first glance.
  • It is, however, an offer at ~6.6x Management Forecast derived Dec 2024 EBITDA. This for a top player in a fast-growing market where Street/mgmt both see up-and-to-the-right results from here. 
  • This is a delayed start (late-Jan) for regulatory approvals. It is too cheap. It is blockable. But Doi-san is young at 64yrs old and he could come back years later.

3. MVIS US Listed Semiconductor 25 Index Rebalance: TSMC Is the Big Sell

By Brian Freitas, Periscope Analytics

4. Benefit One (2412): M3 Extends For a Full Month

By Travis Lundy, Quiddity Advisors

  • Today after the close, Benefit One Inc (2412 JP) amended its Tender Offer Target Opinion Statement to note that Dai Ichi Life had made a proposal to acquire 100%.
  • To allow the Board time to evaluate this proposal, the Company requested a Tender extension. Bidder M3 Inc (2413 JP) was obliged to extend 10 days. They extended 20 days.
  • This tells us a bunch of things. It is worth thinking about what happened to get here.

5. NASDAQ 100 Index Rebalance: 6 Regular Changes + 1 Adhoc Change; US$37bn to Trade

By Brian Freitas, Periscope Analytics

  • There were 6 inclusions and 6 exclusions for the Nasdaq-100 Stock Index (NDX INDEX) at the annual December reconstitution. Then another ad hoc change was added on top of that.
  • Impact on the inclusions ranges from 1-8 days of ADV to buy, while the impact on the deletions varies from 0.7-2.6 days of ADV to sell.
  • Apart from the constituent changes, there are expected to be inflows in Tesla Motors and Broadcom and outflows from Apple, Microsoft, Amazon.com and NVIDIA.

6. JIC Deal For Shinko Electric Is LIGHT, and There’s Room To Complain, But Will Trade Wide

By Travis Lundy, Quiddity Advisors

  • 29 minutes after I published a long, musing piece on the possibilities of structure and announcement later this week, JIC and Shinko Electric announced 5 minutes before midnight.
  • A warning for the future: The Nikkei and every other media outlet got the number wrong. It is NOT a total acquisition cost of “around ¥800bn”. It is under ¥700bn. 
  • It IS a split deal. And if JIC won with that price, it tells you something about the state of the market and future deals in the space.

7. Shinko Electric (6967 JP): JIC’s Pre-Conditional Tender Offer at JPY5,920

By Arun George, Global Equity Research Ltd

  • After months of speculation, Shinko Electric Industries (6967 JP) has recommended the JIC alliance’s preconditional tender offer of JPY5,920 per share, an 18.9% premium to the undisturbed price (31 May). 
  • The pre-condition relates to regulatory approvals in Japan, China, Korea, and possibly Vietnam. The offeror may waive the pre-condition. The offer is long-dated and expected to start in August 2024.
  • The minimum acceptance condition requires a 33.3% minority acceptance rate. Despite the low 7.1% premium to the last close, the offer resulted from a competing bidding process. 

8. Denso Corp Placement – Quick Update – In Better Shape Now, Size Concern Remains

By Sumeet Singh, Aequitas Research

  • On 28th Nov 2023, Toyota Motor (7203 JP) announced that it would sell around 9.4% of Denso Corp (6902 JP) in order to reduce its cross-shareholding.
  • The shares hadn’t corrected much till our last note on 7th Dec 2023, they have since corrected by 6% .
  • We have covered the deal background and deal dynamics in our earlier notes. In this note, we talk about the recent share price movement, as compared to prior deals.

9. HSTECH Index Rebalance Preview: Tongcheng Travel (780 HK) Could Replace GDS (9698 HK)

By Brian Freitas, Periscope Analytics

10. A Review of Tender Offers of Korean Companies in 2023

By Douglas Kim

  • We review the major tender offers of Korean companies in 2023. Some of the major M&A tender offers that have closed this year include Osstem Implant and SM Entertainment.
  • Among the 15 companies targeted for tender offers, there are 5 companies including Osstem Implant, SM Entertainment, Lutronic Corp where the purpose of the tender offers is for M&A. 
  • There were a total of 18 companies that submitted tender offer results announcements in 2023 (as of 11 December), up 157% YoY.

Weekly Top Ten Event-Driven and Index Rebalance

Receive this weekly newsletter keeping 45k+ investors in the loop

JOIN FREE


Dec 10
0

Weekly Top Ten Event-Driven and Index Rebalance – Dec 10, 2023

By | Event-Driven and Index Rebalance

1. Dai-Ichi Life (8750) Proposes a Full Takeover of Benefit One (2412), Overbidding M3

By Travis Lundy, Quiddity Advisors

2. New Benefit One Deal Recalculated, More Benefit for All, Less for One

By Travis Lundy, Quiddity Advisors

  • The deal from Dai-Ichi Life for Benefit One Inc (2412 JP) appears language I did not get the first time around. The JPY 1800/share price is a proposed combined value.
  • The deal would then lower the TOB price to Pasona, and share the benefits from that lower price to Benefit One minorities. 
  • That suggests more upside to Benefit One than I originally thought, and less upside (but still a chunk) to Pasona.

3. Benefit One (2412) – Pro-Ration Expectations Update

By Travis Lundy, Quiddity Advisors

  • Since the announcement of the Benefit One Inc (2412 JP) partial offer, the stock has traded 16+mm shares in the market, which is about 40% of Real World Float.
  • Some of that has been traded multiple times. Looking only at that data would suggest a higher pro-ration, but I expect there is other data one must take into account.
  • Benefit One shares are currently trading at a level suggesting either lower participation OR higher back-end despite the earnings guidance downgrade at announcement.

4. Nikkei 225 Index Rebalance Preview (Mar 2024): Update on Ranking, Capping, Funding & Other Changes

By Brian Freitas, Periscope Analytics

  • The review period for the Nikkei 225 (NKY INDEX) March rebalance ends end January. There could be three changes at the rebalance with sector balance in focus.
  • Depending on the changes, passives trackers will need to buy 2.4-22.5x ADV (10-24% of real float) on the inclusions and sell between 3.5-42.5x ADV on the deletions.
  • Fast Retailing (9983 JP) capping, Nitori Holdings (9843 JP) increase in PAF, a big funding trade, and potentially new stocks being added in two-steps. 

5. March 2024 Nikkei 225 Rebal – Socionext, Disco, and a Consumer Goods Stock to ADD and ¥1trn To Trade

By Travis Lundy, Quiddity Advisors

  • Minimal changes in the rankings since last time. Socionext (6526), Disco (6146), and a Consumer Goods stock (Zozo (3092) top-ranked, Ryohin Keikaku (7453) a better choice) are ADDs.
  • The DELETEs are still Takara Holdings (2531), Pacific Metals (5541), Sumitomo Osaka Cement (5232) with a dark horse candidate in Hitachi Zosen (7004) to replace Takara.
  • There is the upweight to Nitori (9843) AND funkiness with Fast Retailing (9983) to consider. We are right on the threshold. The question is whether it gets “help” in January.

6. S&P/​​​​ASX 200 Index Rebalance (Dec 2023): There Is Positioning but Probably Not Enough

By Brian Freitas, Periscope Analytics

  • There are 3 changes for the S&P/ASX 200 (AS51 INDEX) that will be implemented at the close on 15 December. One name is a relative surprise.
  • There will be 8-15 days of ADV to buy on the inclusions and there will be 12-18 days of ADV to sell on the deletions.
  • Cumulative excess volume and changes in short interest indicate there will be positioning in most stocks. But it may not yet be enough to cover the passive trade.

7. NIFTY200 Momentum30 Index Rebalance Preview: 58% Turnover & Strong Momentum

By Brian Freitas, Periscope Analytics

  • There could be 18 changes for the Nifty200 Momentum 30 Index that will be implemented at the close on 28 December.
  • If all changes are on expected lines, one-way turnover is estimated at 58.2% and that will result in a one-way trade of INR 20bn (US$240m).
  • Since July, the potential adds to the index have outperformed the index and the potential deletes by a big margin. Momentum could keep the outperformance going till implementation date.

8. New Deal for Benefit One (2168) Could Mean Lots More Money for Pasona (2168)

By Travis Lundy, Quiddity Advisors

  • Today, Dai Ichi Life Insurance (8750 JP)  announced a proposed counter/over-bid for Benefit One Inc (2412 JP). ¥1800/share for minorities and a better (undefined) outcome for Pasona Group (2168 JP). 
  • This throws the cat amongst the pigeons as it is unsolicited, for 100% not just to get Pasona’s stake, and it will require Benefit One recommend or not.
  • For Pasona, this deal structure would likely increase the net result from the stake sale, possibly substantially so. It’s in the details. 

9. MVIS Australia Equal Weight Index Rebalance Preview: Stocks Close to Deletion Zone

By Brian Freitas, Periscope Analytics

  • AMP Ltd (AMP AU) and A2 Milk Co Ltd (A2M AU) could be deleted as the lowest ranked current index constituents.
  • There are three other stocks that are close to the deletion threshold and a change in the free float could result in the stocks being deleted.
  • With the exception of A2 Milk Co Ltd (A2M AU), shorts have been increasing on nearly all the potential and close deletions.

10. Swire (19 HK / 87 HK) Announces NEW, Bigger, Better Buyback

By Travis Lundy, Quiddity Advisors

  • Yesterday afternoon, Swire Pacific (A) (19 HK) | Swire Pacific (B) (87 HK) announced a new buyback program. The last one was announced August 2022 and ran until the AGM.
  • That was HK$4bn. In the meantime the company paid an HK$8.12 special div on the Swire As (14%) in September (on top of the HK$1.20 regular div). 
  • Now they have announced a new HK$6bn buyback buying both A Shares and B shares. Details, index impact, historical B/A trading patterns, etc, below.

Weekly Top Ten Event-Driven and Index Rebalance

Receive this weekly newsletter keeping 45k+ investors in the loop

JOIN FREE


Dec 03
0

Weekly Top Ten Event-Driven and Index Rebalance – Dec 3, 2023

By | Event-Driven and Index Rebalance

1. KWEB Index Rebalance: Fenbi (2469 HK) & YSB (9885 HK) Added

By Brian Freitas, Periscope Analytics

2. Denso Corp (6902 JP): Potential US$4.6bn Placement & Limited Passive Buying

By Brian Freitas, Periscope Analytics

3. Denso Corp Placement – Possible Placement by Toyota to Raise US$4.7bn

By Sumeet Singh, Aequitas Research

  • As per Reuters, Toyota Motor (7203 JP) could look to sell up to 10% of Denso Corp (6902 JP) to raise around US$4.7bn before the end of the year.
  • Toyota is the company’s largest shareholder and its largest customer.
  • In this note, we will talk about the deal dynamics.

4. CSI Medical Service Index Rebalance: Chunky Flows for Some Stocks

By Brian Freitas, Periscope Analytics

  • There are 4 changes for the CSI Medical Service Index that will be implemented at the close on 8 December.
  • The constituent changes plus capping result in one-way turnover of 5.9% and in a one-way trade of CNY 1.86bn (US$261m).
  • Some stocks will have passive flows from global trackers at the end of November while there will be flows from other local passive trackers at the close on 8 December.

5. Breaking Down Korean Regulators’ Official Details on New Short Selling System

By Sanghyun Park, Clepsydra Capital

  • Concerning the newly imposed 90-day mandatory repayment period for institutional investors, the elimination of the recall risk during this period is not included in this improvement plan.
  • The right to re-establish the same short-selling position after the 90-day repayment period is unlimited. We should pay attention to the potential of this creating new trading events.
  • Institutions borrowing stocks from overseas are not subject to the 105% collateral ratio. However, everyone is subject to the 90-day repayment period, even for investors who borrow stocks from overseas.

6. Asahi Group Placement – Follow Up – Shaping up for a Christmas Cheer

By Clarence Chu, Aequitas Research

7. Itoen Pref (25935 JP) – Big Discount, Big Buyback, No Big Governance Change

By Travis Lundy, Quiddity Advisors

  • This is always a tough subject, but every now and then I throw myself on the mercy of the ho-humming crowd and write about the Ito En Prefs (25935 JP).
  • No strong catalyst. Limited capacity for strongly better governance. Even less apparent corporate interest in good governance. 
  • But we have a mini-catalyst, and it has been a while, and I think there IS a good way to think about this stock, so here’s another crack at it.

8. CNI Semiconductor Chips Index Rebalance: Yet Another Index Inclusion for Hygon

By Brian Freitas, Periscope Analytics

  • There are 3 changes for the CNI Semiconductor Chips Index that will be implemented at the close on 8 December.
  • This is yet another index inclusion for Hygon Information Technology C (688041 CH) – the stock continues to move higher on expected passive buying over the next two weeks.
  • Over the last 6 months, the adds have underperformed the deletes but there has been a significant improvement in performance over the last 2 months.

9. ChiNext/​​ChiNext 50 Index Rebalance: Adds Outperforming Deletes Now

By Brian Freitas, Periscope Analytics

  • There will be 6 changes for the ChiNext Index (SZ399006 INDEX) and 5 changes for the ChiNext 50 Index. Implementation is at the close on 8 December.
  • There is a lot of overlap between the adds and deletes across both indices with the one-way trade across both indices estimated to be CNY 2.4bn.
  • The adds and deletes have drifted lower over the last few months. However, the adds have outperformed the deletes significantly in the last month.

10. Merger Arb Mondays (27 Nov) – Origin, OreCorp, Healius, Taisho, JSR, Eoflow, Hollysys, Haitong Intl

By Arun George, Global Equity Research Ltd

Weekly Top Ten Event-Driven and Index Rebalance

Receive this weekly newsletter keeping 45k+ investors in the loop

JOIN FREE


Nov 26
0

Weekly Top Ten Event-Driven and Index Rebalance – Nov 26, 2023

By | Event-Driven and Index Rebalance

1. JSR (4185) – Time To Fight The FUD

By Travis Lundy, Quiddity Advisors

  • Many months ago I suggested the JIC Tender Offer JSR Corp (4185 JP) was not overwhelmingly high-priced, but that it would be “heavy” for months to come. 
  • FUD and Flows would widen the spread. And they did.
  • Now the time decay to expected approvals and tender offer start are getting steep. Time to Fight The FUD.

2. Yuanta/​P-Shares Taiwan Div+ ETF Rebalance Preview: 18% One-Way Turnover & US$2.74bn Trade

By Brian Freitas, Periscope Analytics

  • Using data from the close on 20 November, there could be 6 adds and 5 deletes to the Yuanta/​P-Shares Taiwan Dividend Plus ETF in December.
  • There will also be capping and funding flows that will lead to a one-way turnover of 17.8% and a one-way trade of US$1.37bn.
  • There are 16 stocks with at least 3 days ADV to trade from passive trackers and another 10 stocks that have at least 1-day ADV to trade.

3. Understanding Extreme SSF Spreads in Korea & Trading Approaches

By Sanghyun Park, Clepsydra Capital

  • Futures backwardation resulting from the short selling ban will persist. Also, the contraction of market making will lead to more widespread and frequent occurrences of extreme spreads.
  • The straightforward sell arbitrage (reverse cash and carry) is no longer viable. We must pay attention to the emergence of new price and trading patterns driven by these market conditions.
  • One potential pattern is the possibility of spot buying centered around those that exhibited extreme spreads at expiration. This has already been observed to some extent in this month’s expiration.

4. EOFlow (Further) Tests Investor Patience

By David Blennerhassett, Quiddity Advisors

  • Back on the 25 May, when Medtronic Plc (MDT US) enter into a SPA with EOFlow (294090 KS)‘s CEO, with a follow-on Tender Offer, the whole construct looked pretty clean.
  • Then in August Insulet Corp (PODD US) launched its lawsuit, which in hindsight, should have been expected. Then earlier this month, news surfaced concerning a stock-backed loan to the CEO.
  • Now the CEO is selling, presumably to repay his collateralized loan. Shares are down 38% since the resumption of trading, and are now at a whopping 122% spread to terms. 

5. What Should We Do About the Futures Basis Spread Caused by Hanwha Ocean’s Rights Offering?

By Sanghyun Park, Clepsydra Capital

  • The day the basis spread disappears is this Friday, the 24th of November. This mirrors a comparable pattern observed during Korean Air’s rights offering in 2020.
  • If the spot price does not fall below the futures price of our entry until this Friday, we could potentially be in a profitable range.
  • There has been a notable pattern where the spread continues to exist until just before the moment when new share selling becomes feasible.

6. HSCI Index Rebalance: Keep (3650 HK) & TUHU Car (9690 HK) Added

By Brian Freitas, Periscope Analytics

  • Keep Inc (3650 HK) and Tuhu Car (9690 HK) will be added to the Hang Seng Composite Index (HSCI) after the close of trading on 1 December.
  • Keep (3650 HK) will be added to Southbound Stock Connect from the open on 4 December while Tuhu Car (9690 HK) will only be added to Stock Connect in April.
  • There are lock-up expiries on both stocks, prior to or after inclusion in Stock Connect, and trading strategies will need to take that into account.

7. Origin Energy (ORG AU): State of Play

By Arun George, Global Equity Research Ltd

  • The Origin Energy (ORG AU) scheme vote is on 23 November. Brookfield/EIG’s best and final offer is A$6.59 and US$1.86 per share, currently worth A$9.45.
  • With AusSuper reportedly increasing its stake past 17% on Friday, the scheme vote remains too close to call. Brookfield/EIG will need a large YES vote turnout for a successful vote.
  • If the scheme is voted down, there are mainly three Plan Bs – Brookfield/EIG’s alternate transaction structure, Board-initiated strategic review or maintaining the status quo.

8. Tata Technologies IPO: Offering Details & Index Inclusion

By Brian Freitas, Periscope Analytics

  • Existing Tata Technologies (TATATECH IN) shareholders are looking to sell 60.85m shares and raise between INR 28.9-30.4bn (US$347-365m) giving the company a market cap of between US$2.31-2.44bn.
  • Tata Technologies (TATATECH IN) will have a float of around 10% at the time of listing and that will increase close to 30% after the pre-IPO lock-up ends.
  • Tata Technologies (TATATECH IN) could be added to global indices in May and June, but inclusion in local indices with meaningful tracking assets will take longer.

9. Daito Trust (1878) Doing a ToSTNeT Buyback Which Is NOT a ToSTNeT Buyback…  Unless It Is.

By Travis Lundy, Quiddity Advisors

10. S&P/​​​​​​​​​ASX Index Rebalance Preview: Big Impact; A Week From Announcement

By Brian Freitas, Periscope Analytics

  • There could be 3 changes for the S&P/ASX 200 (AS51 INDEX) in December. There are unlikely to be any changes for indices higher up the hierarchy.
  • Passive trackers will need to buy between 7-11 days of ADV in the inclusions while the impact on the deletions will be larger at between 11-23 days of ADV.
  • Short interest has decreased on the potential inclusions and increased on the potential deletions. There is significant pre-positioning on some of the stocks.

Weekly Top Ten Event-Driven and Index Rebalance

Receive this weekly newsletter keeping 45k+ investors in the loop

JOIN FREE


Nov 19
0

Weekly Top Ten Event-Driven and Index Rebalance – Nov 19, 2023

By | Event-Driven and Index Rebalance

1. Big M3 (2413) Partial TOB As Pasona Sells Control of Benefit One (2412): Really Interesting Dynamics

By Travis Lundy, Quiddity Advisors

  • Today after the close with Benefit One Inc (2412 JP) reporting earnings, M3 Inc (2413 JP) announced a Partial Tender Offer to buy 81.21-83.31mm shares of Benefit One at ¥1600/share.
  • That cleans out Pasona, which owns 81.21mm shares. Or does it… Shareholder structure dynamics and the problems they cause later bear some detailed examination. 
  • This one is going to be a fun special sit.

2. FRTIB Switches Benchmarks: +EM/-DM; US$56bn Trade as Asia EM Benefits & HK Loses Out

By Brian Freitas, Periscope Analytics

  • The FRTIB has decided to switch its benchmark for the International Stock Index Investment Fund from the EAFE Index to the ACWI IMI ex-USA ex-China ex-Hong Kong Index.
  • With around US$68bn invested in the I Fund, this will set off churn among the constituent stocks in 2024. One-way trade is around US$28bn with DM outflows and EM inflows.
  • The benchmark shift could be done over a 4 month period with higher trading during periods where liquidity opportunities arise.

3. I Like Big Bank Buybacks And I Cannot Lie

By Travis Lundy, Quiddity Advisors

4. Pasona: The Wrong Price

By Travis Lundy, Quiddity Advisors

  • As discussed here in a piece about the Partial Tender Offer, Pasona Group (2168) has agreed to sell its controlling stake in Benefit One (2412) to M3 (2413).
  • That will leave Pasona Group with a fair chunk of cash and possibly a residual stake in Benefit One, depending on the results.
  • Though we don’t know what the future holds, Pasona now is the wrong price for its future. 

5. Japan – Increase in Shorts on Some Interesting*** Stocks

By Brian Freitas, Periscope Analytics

6. CSI300 Index Rebalance Preview: 13 Potential Changes in December

By Brian Freitas, Periscope Analytics

  • With the review period for the December rebalance of the Shanghai Shenzhen CSI 300 Inde (SHSZ300 INDEX) complete, there could be 13 changes for the index.
  • We estimate one-way turnover of 1.94% at the December rebalance leading to a one-way trade of CNY 6.98bn. There are a lot of stocks with over 1x ADV to trade.
  • Over the last 6 months, the potential adds and potential deletes have tracked each other and underperformed the index. Positioning has led to outperformance in the last week.

7. STAR50 Index Rebalance Preview: Big Impact Expected on the Changes

By Brian Freitas, Periscope Analytics

  • With the review period complete, we expect one change for the STAR50 INDEX in December if the index committee continues to use a 6-month minimum listing history.
  • With net inflows to mainland China ETFs over the last few months, passive trackers will need to trade between 9-25 days of ADV on the potential add and delete.
  • SMIC (688981 CH) will be capped and there will be reverse funding flows on the index constituents. One-way turnover is estimated at 1.8% resulting in a one-way trade of CNY2,580m.

8. Zhejiang Expressway (576 HK) Rights Offering – The Dynamics May Be Interesting

By Travis Lundy, Quiddity Advisors

  • Last week, Zhejiang Expressway Co H (576 HK) announced its rights offering on both its H-Shares and its A-Shares, previously mooted on 23 May, and the Circular on 26 June.
  • The company applied, got CSRC approval on 5 Nov, announced the issuance on 6 Nov, and shares went ex- on 10 November. It’s probably unneeded, but it’s there. 
  • The stock is cheap. The company will boost its payout ratio. And it isn’t that “heavy” a deal. The Rights Trading Dynamics may be interesting.

9. Benefit One (2412 JP): M3’s Partial Tender Offer

By Arun George, Global Equity Research Ltd

  • Benefit One Inc (2412 JP) announced a partial tender offer from M3 Inc (2413 JP) at JPY1,600 per share, a 40.0% premium to the undisturbed price. 
  • The transaction facilitates Pasona Group (2168 JP)‘s exit. The offer is for a minimum of 81.2 million shares (51.16% ownership ratio) and a maximum of 87.3 million shares (55.00%). 
  • Irrevocables from Pasona represent a 51.16% ownership ratio, satisfying the minimum acceptance condition. The offer is light vs. historical multiples and share prices. 

10. Key Points We Should Know Regarding the Current Status of EOFlow

By Sanghyun Park, Clepsydra Capital

  • It can be considered that the suspension of EOFlow’s trading and, furthermore, the risk of delisting have been completely eliminated at this point.
  • EOFlow emphasizes the possibility of circumventing sales of EOPatch by supplying EOPump to a JV in China. The key factors that initially sparked Medtronic’s interest in EOFlow are still valid.
  • If CEO Kim fails to repay a stock collateral loan of ₩20B or secure additional loans, approximately 4% of the total issued shares could be sold in the market.

Weekly Top Ten Event-Driven and Index Rebalance

Receive this weekly newsletter keeping 45k+ investors in the loop

JOIN FREE