In today’s briefing:
- MBK’s Dual Tenders for Korea Zinc and Youngpoong Precision: The Largest Deal Ever in Korea
- Shinko Electric (6967 JP) Takeover – Time To Buy Dips, and Ibiden (4062 JP)
- MBK Partners and Jang Family Partner to Control Korea Zinc + Tender Offer of 14.6% of Korea Zinc
- Tender Offer of 43.4% Stake in Young Poong Precision by MBK
- When Dissenting REALLY Pays Off
- Raymond Lifestyle: A Value Play in Ethnic Wear with Special Situation Potential
- KRX Releases November SSFs and SSOs Reshuffle: Here’s the Breakdown
- Midea Group (300 HK): Priced at Top End; Offer Size Adj Option Exercise Would Ease Index Fast Entry
- Fuji Soft (9749) – Fuji Softer
MBK’s Dual Tenders for Korea Zinc and Youngpoong Precision: The Largest Deal Ever in Korea
- MBK launches a tender offer to acquire 14.6% of Korea Zinc at ₩660,000 per share, a ₩2T deal with an 18.7% premium. Offer runs from September 13 to October 4.
- On top of that, MBK’s also rolling out a tender offer for Young Poong Precision at ₩20,000 per share—a hefty 113% premium over yesterday’s close.
- Spread action is possible if the Choi family counters, driving volatility. The market’s watching for a higher bid, which could create trading opportunities amid rising spread volatility.
Shinko Electric (6967 JP) Takeover – Time To Buy Dips, and Ibiden (4062 JP)
- Late last month, Shinko Electric Industries (6967 JP) announced that the JIC consortium Tender Offer due to be launched by end-August would be delayed. Next update? January 2025.
- Everyone was expecting a delay, but that caused the stock to fall. Then tech/AI fell out of bed, Ibiden crashed, then China export restrictions noise/pushback caused further delay.
- I saw a 9% gross spread yesterday and thought “Geez”, that’s a buy.” A day later, it’s 6%. Still wide, still interesting. And that has set a boundary.
MBK Partners and Jang Family Partner to Control Korea Zinc + Tender Offer of 14.6% of Korea Zinc
- After the market close on 12 September, Maekyung Business Daily reported that MBK Partners will become the largest shareholder of Korea Zinc (010130 KS) along with Young Poong (000670 KS).
- MBK Partners, along with Youngpoong and advisor Jang Hyung-jin, also plans to conduct a tender offer of 14.6% stake in Korea Zinc.
- The tender offer price for Korea Zinc is 660,000 won per share, which is 18.7% higher than the closing price on 12 September.
Tender Offer of 43.4% Stake in Young Poong Precision by MBK
- After the market close on 12 September, Hankyung Business Daily reported that MBK Partners plans to conduct a tender offer of 43.43% stake in Young Poong Precision.
- The tender offer price is 20,000 won per share (113% higher than the closing price on 12 September).
- Choi family currently controls Young Poong Precision. MBK plans to secure a controlling stake and obtain voting rights for the 1.85% stake in Korea Zinc held by Young Poong Precision.
When Dissenting REALLY Pays Off
- Back in August 2017, Xingxuan Technology, a privately held Cayman Islands company operating in the online food delivery space in China, was transferred by way of a statutory merger.
- The buyer was Alibaba Group (9988 HK)-backed Rajax, the key seller, Baidu (9888 HK). The dissenter, having paid US$125mn for its shares, was offered cash/scrip worth an estimated US$42mn.
- The dissenter considered terms low-balled. The judge agreed. The uplift? 659%.
Raymond Lifestyle: A Value Play in Ethnic Wear with Special Situation Potential
- Raymond Lifestyle (RAYMONDL IN) recently demerged from Raymond Limited. Since Raymond Limited was part of various indexes, Raymond Lifestyle was not. Index Fund selling led to a correction.
- The correction made Raymond Lifestyle a special situation value bet.
- The cherry on the cake is strong management guidance and a foray into the untapped non branded and unorganized apparel segment
KRX Releases November SSFs and SSOs Reshuffle: Here’s the Breakdown
- With the November reshuffle, single stock futures rise from 222 to 258 (+36) and single stock options increase from 52 to 58 (+6) across KOSPI 200 and KOSDAQ Global.
- The main takeaway from this reshuffle is the price impact from a short-term volume spike as market makers jump into newly listed single-stock futures.
- The volume surge in spot markets for newly listed assets consistently drives positive price impact, most notably right after listing, rather than waiting until contract expiry.
Midea Group (300 HK): Priced at Top End; Offer Size Adj Option Exercise Would Ease Index Fast Entry
- Media reports indicate that Midea Group (000333 CH) has priced its H-shares IPO at HK$54.8/share, the top of the range. That is a 19.85% discount to the A-shares.
- Reports also indicate that the IPO was oversubscribed multiple times with Hillhouse and GIC putting in large orders. That could result in the Offer Size Adjustment Option being exercised.
- The exercise of the Offer Size Adjustment Option will take the IPO raise to HK$31bn (US$3.98bn) and index inclusion in some of the larger indices will become a lot easier.
Fuji Soft (9749) – Fuji Softer
- When Bain came out saying they would bid more, with preparation to launch in November, KKR launched early to see if they could get the jump, discussed here.
- The stock popped when the Bain’s bid was obviously serious, and supported by the Founding Family, but it went to Bain’s “5% higher” plus another 5%. I was bearish.
- But I signalled willingness to change my mind if the stock price dropped. It has dropped.
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