In today’s briefing:
- Norwest Energy (NWE)’s Opportunistic Bid from Mineral Resources (MIN AU)
- Celltrion Siblings Announced Dividends: Trading Based on Past Patterns
- Last Week in Event SPACE: NTT Data, Origin Energy, Toyo Construction, Haidilao, Toshiba
- Index Rebalance & ETF Flow Recap: S&P/ASX, HSCEI, HSTECH, Haidilao/Super Hi, CSI REIT
- Kanzhun (BZ US/ 2076 HK): Dual Primary Listing & Potential HSTECH Inclusion
- EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades
- Elmo Software (ELO AU)’s Scheme Meeting on 30 January
- O2Micro (OIIM US) Privatisation Vote on 31 January
- (Mostly) Asia-Pac Weekly Risk Arb Wrap: St Barbara/Genesis, Tyro, Yashili, Acotec, Okk Corp/Nidec
- SK Inc: Chairman Chey’s Divorce Settlement Finalized + SoTP Valuation Analysis
Norwest Energy (NWE)’s Opportunistic Bid from Mineral Resources (MIN AU)
- Mineral Resources (MIN AU) has launched an all-scrip off-market takeover offer at 1 MIN share for every 1,367 Norwest Energy Nl (NWE AU) shares, a 33.3% premium to undisturbed price.
- There is no minimum acceptance condition, and the offer is only subject to prescribed occurrences. The timing is opportunistic and motivated by recent Perth Basin consolidation activity.
- While the offer implies a premium to historical prices, the gross exchange ratio is unattractive. MIN’s key aim is privatisation, and a bump is likely required to achieve that goal.
Celltrion Siblings Announced Dividends: Trading Based on Past Patterns
- The three Celltrion companies are showing the same pattern of boosting share prices towards the yearend T-1 ex-date. This isn’t unique to Celltrion, but the intensity is high for them.
- Celltrion’s yearend dividend effect has an inverse correlation with the market’s overall performance. Fortunately, this year’s market-wide performance was the worst in the past five years.
- For this year, the dividend yield isn’t bad either, swing on Dec 17 to T-1 ex-date or day trade on T-1 ex-date should provide juicy returns based on past patterns.
Last Week in Event SPACE: NTT Data, Origin Energy, Toyo Construction, Haidilao, Toshiba
- Stay long NTT Data Corp (9613 JP) through mid-January. Then sell.
- Origin Energy (ORG AU) may drift lower as the street crunches numbers, in tandem with a vacuum of news as Brookfield undertakes its due diligence.
- Toyo Construction (1890 JP) is now upset that YFO has decided to release the reason why Toyo management didn’t.
Index Rebalance & ETF Flow Recap: S&P/ASX, HSCEI, HSTECH, Haidilao/Super Hi, CSI REIT
- It was a busy Friday with the implementation of the December rebalance for multiple indices. The Yuanta/P-shares Taiwan Dividend Plus ETF will continue to rebalance over the next 4 days.
- The coming week should be relatively quiet with the announcement of the Stock Exchange of Thailand SET 50 Index (SET50 INDEX) changes expected.
- There were large inflows to ETFs focused on China, Korea, Japan, Taiwan. There were inflows to Hang Seng H Share Index ETF and outflows from Tracker Fund of Hong Kong.
Kanzhun (BZ US/ 2076 HK): Dual Primary Listing & Potential HSTECH Inclusion
- Kanzhun (BZ US) will Dual Primary list on the HKEX (388 HK) by Way of Introduction and the stock is expected to start trading on 22 December.
- Following the changes to the handling of Dual-Primary-listed companies, Kanzhun (BZ US) should be added to the Hang Seng Tech Index (HSTECH INDEX) at the March rebalance.
- Kanzhun (BZ US)‘s inclusion will lead to other changes to the Hang Seng Tech Index (HSTECH INDEX) with an extra deletion to keep the number of index constituents at 30.
EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades
- Weekly summary of vol changes and moves across Global Markets
- Analysing ATM volatility and skew changes over the last 5 days
- We suggest a few trades to take advantage of the implied vol surfaces
Elmo Software (ELO AU)’s Scheme Meeting on 30 January
- The IE considers K1’s A$4.85 offer for Elmo Software (ELO AU) to be fair and reasonable as it is towards the high end of its valuation range of A$4.39-4.98.
- K1 has received FIRB and US antitrust approval. The remaining key conditions are shareholders and court approval.
- This is a done deal. At the last close price and for the 23 February 2023 payment, the gross and annualised spread is 1.9% and 10.9%, respectively.
O2Micro (OIIM US) Privatisation Vote on 31 January
- O2Micro International (OIIM US)’s EGM to vote on the US$5.00 per ADS privatisation offer from FNOF Precious Honour Limited is on 31 January 2023.
- Shareholders representing two-thirds of shares need to approve the deal. As rollover shareholders represent 16.92% of voting rights, 59.88% of disinterested shareholders must vote YES to meet the two-thirds threshold.
- While peers have re-rated, the offer is attractive and there are no competing bids. At the last close, the gross spread to the offer is 11.6%.
(Mostly) Asia-Pac Weekly Risk Arb Wrap: St Barbara/Genesis, Tyro, Yashili, Acotec, Okk Corp/Nidec
- There are 48 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
- Four new deals were discussed on Smartkarma: the St Barbara (SBM AU)/ Genesis Minerals (GMD AU) merger; Acotec (6669 HK)‘s Offer, Okk (6205 JP)‘s Offer, MinRes (MIN AU)/Norwest (NWE AU) merger.
- Key updates took place for: Tyro Payments (TYR AU), Origin Energy (ORG AU), Yashili International Holdings (1230 HK), and Toyo Construction (1890 JP).
SK Inc: Chairman Chey’s Divorce Settlement Finalized + SoTP Valuation Analysis
- In early December, the divorce settlement between SK Group Chairman Chey Tae-Won and his former wife Roh So-Young was finalized after 6+ years of long proceedings.
- The end of the divorce settlement means that there is now a greater probability of SK Inc materially cancelling some of its treasury shares in 2023.
- Our SoTP valuation of SK Inc suggests an implied valuation of 260,712 won per share, suggesting 28.1% upside from current levels.
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