In today’s briefing:
- Hyosung Corp (004800 KS): Spin-Off & KOSPI200 Index Implications
- Alumina (AWC AU) Agrees To Alcoa’s Offer
- T G S/P G S: Delayed by Competition Review, Spread
Hyosung Corp (004800 KS): Spin-Off & KOSPI200 Index Implications
- Hyosung Corporation (004800 KS) has announced that it is spinning off part of its business holdings to Hyosung New Holding Corporation in a 0.818:0.182 ratio.
- The stock will remain suspended from late June to late July. We expect Hyosung Corporation (004800 KS) to maintain its index membership while the New Entity will not be added.
- The dynamics between listed ETFs and non-listed passive trackers differ and we take a look at the potential index flows.
Alumina (AWC AU) Agrees To Alcoa’s Offer
- Pittsburgh-Based Alcoa (AA US) is offering 0.02854 of its own shares for each Alumina Ltd (AWC AU) share, a 13% premium to last close. Alumina recommends the Offer to shareholders.
- Alumina owns a 40% stake in Alcoa World Alumina & Chemicals, a JV with Alcoa that operates bauxite mining, alumina refining, and aluminium smelting operations. Alcoa owns the remaining 60%.
- Separately, Alcoa announced it has entered into an agreement with Allan Gray Australia that gives it the right to acquire up to 19.9% of Alumina. CITIC also holds 18.9%.
T G S/P G S: Delayed by Competition Review, Spread
- TGS is seizing an opportunity by acquiring a competitor at a low valuation, in an all-share deal 0.06829 TGS NO x 1 PGS NO, departing from its traditional asset-light approach.
- The Merger is subject to ongoing review by UK and Norwegian competition authorities. I believe the deal will be cleared, but might be delayed until Q4.
- The dividend-adjusted gross spread is 6.7%. Regulatory approval concerns seem overblown. I would set up the spread.
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