In today’s briefing:
- KOSDAQ150 Ad Hoc Index Rebalance: Hydro Lithium (101670) Could Replace Nice Information (030190)
- Index Rebalance & ETF Flow Recap: LQ45/IDX30, FXI, New Deal, KOSPI, KQ150, LG Energy, IN Float, TTMT
- Concordia/Rothschild: Start of Offer Period
- (Mostly) Asia-Pac Weekly Risk Arb Wrap: Talon Energy, Pacific Current, Toshiba, Eoflow, 111 Inc
- Last Week in Event SPACE: NTT, Delta Electronics, Fortescue Metals, Nomura Real Estate
- Dali Foods (3799 HK): Scheme Vote on 23 August
- OCI Holdings Announces a Tender Offer to Buy 45% Stake in OCI Co
KOSDAQ150 Ad Hoc Index Rebalance: Hydro Lithium (101670) Could Replace Nice Information (030190)
- The KRX has approved Nice Information Service Co (030190 KS)‘s transfer from the KOSDAQ Board to the KOSPI Board. The transfer could take place in the next two weeks.
- Hydro Lithium (101670 KS) was the highest ranked non-constituent from the Industrials sector at the June rebalance and could replace Nice Information Service (030190 KS) in the KOSDAQ 150 Index.
- Nice Information Service Co (030190 KS) has no chance of inclusion in the Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) and will not be short sell eligible post section transfer.
Index Rebalance & ETF Flow Recap: LQ45/IDX30, FXI, New Deal, KOSPI, KQ150, LG Energy, IN Float, TTMT
- The changes to the LQ45/IDX30 were announced last week and will be implemented Monday. The PSE also announced that there would be no changes for the PCOMP INDEX in August.
- There are a bunch of review cutoffs on Monday, most notably for the Nikkei 225 (NKY INDEX), STAR50 INDEX, the NIFTY family of indices and the KRX New Deal indices.
- There were inflows to China focused ETFs and outflows from Taiwan and Korea focused ETFs during the week.
Concordia/Rothschild: Start of Offer Period
- The simplified tender offer for Rothschild & Co (ROTH FP) opened on 24 July and will last until 8 September (inclusive). The ex-dividend offer price is €38.60.
- The offer represents 7.22x NTM Fwd P/E (ex-dividend), rather low for the top European M&A player and a high quality business. Merchant Banking division could have a lot of upside.
- The enlarged family concert has bought shares in the market and has now c.66%. I anticipate the offer to go according to plan. Gross spread is nil.
(Mostly) Asia-Pac Weekly Risk Arb Wrap: Talon Energy, Pacific Current, Toshiba, Eoflow, 111 Inc
- I tally 42 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
- Two new deals this week: Talon Energy (TPD AU)‘s non-binding Offer from Strike Energy (STX AU); and Pacific Current (PAC AU)‘s cash/scrip NBIO from Regal Partners (RPL AU).
- Key updates took place for Toshiba Corp (6502 JP), Eoflow (294090 KS), and 111 Inc (YI US).
Last Week in Event SPACE: NTT, Delta Electronics, Fortescue Metals, Nomura Real Estate
- NTT (9432 JP) will likely buy back more shares than previously expected as the government sells shares down. Buy dips vs peers KDDI and Softbank Corp. This is a long-term tilt.
- There are some doubts over the fate of Delta Electronics Thai (DELTA TB)‘s SET50 membership, at present, but it should escape deletion in December 2023.
- Don’t punt Fortescue Metals (FMG AU) on the off-chance of a change of control in the wake pf the Forrest split. If anything, there might be a leakage of shares.
Dali Foods (3799 HK): Scheme Vote on 23 August
- Dali Foods Group (3799 HK)‘s scheme document is out with the court meeting scheduled for 23 August. The IFA considers the HK$3.75 per share offer to be fair and reasonable.
- Key condition is approval by at least 75% of disinterested shareholders (<10% of all disinterested shareholders rejection). No independent shareholder holds a blocking stake.
- Sector sentiment has modestly weakened. This looks done. At the last close and for the 8 September payment, the gross and annualised spread is 3.6% and 34.8%, respectively.
OCI Holdings Announces a Tender Offer to Buy 45% Stake in OCI Co
- On 28 July, OCI Holdings (010060 KS) announced that it plans to conduct a tender offer to purchase up to 45% stake in OCI Co (456040 KS).
- The tender offer price of OCI Co is 139,000 won. The method of this tender offer is to issue new common shares of OCI Holdings.
- In the short term (one month), we expect OCI Co’s shares to outperform OCI Holdings shares. This deal is structured to mainly benefit the OCI Group’s insiders.
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