In today’s briefing:
- Korea Zinc: Breaking Down the Cancel Risk with Specific Legal Provisions for Both Camps
- CPMC Holdings (906.HK) Privatization Update – Will ORG Withdraw Midway?
- Merger Arb Mondays (07 Oct) – GA Pack, Henlius, Canvest, Samson, T-Gaia, Descente, Platinum
- Copper Tracker Oct 7th, 2024: Copper Set to Pass 10,000 USD/Ton
- Helix Energy Solutions Up for Sale? 4 Reasons It’s A Prime Acquisition Target!
- Iron Ore Tracker (7-Oct-2024): Sentiment Swing With China Stimulus
Korea Zinc: Breaking Down the Cancel Risk with Specific Legal Provisions for Both Camps
- MBK is unlikely to lower the tender price or cancel the offer due to legal constraints and potential regulatory hurdles, along with compensating investors.
- Just keep in mind that if you want to participate in MBK’s Korea Zinc offer, you’ll need to submit your bid to secure that compensation safety net.
- We can’t rule out the second injunction request being accepted on the 21st, leaving Choi’s camp in a tough position with tender offer cancellation risks compared to MBK.
CPMC Holdings (906.HK) Privatization Update – Will ORG Withdraw Midway?
- Acquiring CPMC at low price is in line with Baosteel’s strategic goals and the new assessment indicators of Baowu Group. This explains why Baosteel didn’t choose to raise its Offer
- ORG intends to acquire 100% equity of CPMC. This means state-owned capital needs to withdraw completely from CPMC. So, would China Foods/COFCO (both SOEs) agree to be acquired by ORG?
- If ORG is “forced to” acquire CPMC due to Baosteel’s low Offer Price, will ORG change mind and choose to withdraw midway?Such “potential unwillingness” from ORG makes the deal “tricky”.
Merger Arb Mondays (07 Oct) – GA Pack, Henlius, Canvest, Samson, T-Gaia, Descente, Platinum
- We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
- Highest spreads: Shanghai Henlius Biotech (2696 HK), Greatview Aseptic Packaging (468 HK), Canvest Environmental Protection Group (1381 HK), Shinko Electric Industries (6967 JP), Capitol Health (CAJ AU).
- Lowest spreads: Dyna Mac Holdings (DMHL SP), Platinum Asset Management (PTM AU), Xingda International (1899 HK), Trancom Co Ltd (9058 JP), Fuji Soft Inc (9749 JP).
Copper Tracker Oct 7th, 2024: Copper Set to Pass 10,000 USD/Ton
- With China’s slew of stimulus measures released last month, we are confident that copper prices will break 10,000 USD/ton soon.
- The COMEX spread with LME has now started to build up to over 300 USD/ton, signaling that macro funds are getting bullish on copper.
- We continue to like the equity route to play copper with pure plays like Southern Copper (SCCO US) , Ivanhoe Mines (IVN CN), and Teck Resources (TECK US).
Helix Energy Solutions Up for Sale? 4 Reasons It’s A Prime Acquisition Target!
- Helix Energy Solutions has emerged as a prime candidate for strategic acquirers and financial sponsors exploring opportunities in the offshore oil and gas industry.
- The company, which provides specialized services such as well intervention, robotics, and production facilities, is exploring its strategic options, including a potential sale.
- Helix’s latest quarterly earnings call revealed a significant improvement in revenue and profitability, alongside strong operational performance across its key segments.
Iron Ore Tracker (7-Oct-2024): Sentiment Swing With China Stimulus
- A slew of policies announced by the Chinese government led to a short squeeze in the iron ore market, with prices moving up 20% from the lows to 108 USD/ton.
- Mill margins inflected into positive territory, and iron ore, after gapping below its band of 95-130 USD/ton for the last 3.5 years, is now back in its normalized range.
- While the current move was unexpected, we expect the euphoria to last a while as more clarity on the stimulus emerges and ore prices tick up short-term.
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