In today’s briefing:
- Yashili (1230 HK)’s Pre-Conditional Offer From Mengniu
- Yashili’s HK$1.20 Privatisation Offer from Mengniu
- KOSPI 200 Rebalancing: Trade Short Covering Event for Deletions
Yashili (1230 HK)’s Pre-Conditional Offer From Mengniu
- Yashili International Holdings (1230 HK) has announced a pre-conditional Offer, by way of a Scheme, from China Mengniu Dairy Co (2319 HK).
- The cancellation price of HK$1.20/share, a 31.9% premium to last close, and a 161% premium to the undisturbed price, is in line with the 16 March announcement.
- Conditions involve various business disposals and the exit of Danone SA (BN FP)‘s stake in Yashili; yet apart from timing, which is contingent on regulatory approvals, this looks done.
Yashili’s HK$1.20 Privatisation Offer from Mengniu
- Danone SA (BN FP) will sell to China Mengniu Dairy Co (2319 HK) its 25% Yashili stake for HK$1.20 per share. Post-completion, Mengniu will launch a privatisation offer at HK$1.20.
- The privatisation is subject to several pre-conditions, which carry low risk in our view. The key conditions are the headcount test and rejections by <10% of all disinterested shareholders.
- The offer for Yashili International Holdings (1230 HK) is attractive. At the last close, the gross spread to the offer is 30.4%. Buy up to HK$1.09 (implies an 85% deal probability).
KOSPI 200 Rebalancing: Trade Short Covering Event for Deletions
- Short-Selling is not possible after being deleted from the KOSPI 200. So, active short-covering for deletions is witnessed before and after the rebalancing implementation.
- CJ CGV (079160 KS) stands out the most at this point. Its short interest is 4.10% of SO, and the short interest has increased the most over the past month.
- The short-covering/price movement started to be observed from the end of the prior month. So, I’d consider building positions from the third week of this month.
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