In today’s briefing:
- Outsourcing (2427) – The OTHER Arb – That One Neat Trick And Its Weird Risks
- JSR (4185) Tender May Start Next Week
- JSR Corporation (4185 JP): SUNY RF Responds as JIC Tender Rumoured for a 19 Mar Start
- EQD | NIFTY Down: Where to BUY WEEKLY
- Another Brewing Fight for the Controlling Shareholding of Hanjin Kal?
Outsourcing (2427) – The OTHER Arb – That One Neat Trick And Its Weird Risks
- Outsourcing Inc (2427 JP) has been an “interesting” risk arb situation. It was launched as a Cheeky, Opportunistic, Low-Priced MBO. Some bumps after launch turned out to be BAU.
- The stock has not traded above terms since early on in the trade. I expect people are happy to get out. But there is ANOTHER ARB to do here.
- The OTHER ARB is something quite particular to high float, low activism risk arb trades. In some ways better than the traditional arb, but it has some risks.
JSR (4185) Tender May Start Next Week
- Just out this AM, an article in Bloomberg (J) says “people familiar with the matter” suggest the Tender Offer could be launched as early as 19 March.
- The language regarding the nature of the China regulatory “approval” is different than recent media articles, but they are in the same vein.
- Original and updated data, information, grids, etc are shown below.
JSR Corporation (4185 JP): SUNY RF Responds as JIC Tender Rumoured for a 19 Mar Start
- Bloomberg reports that JIC will start the JSR Corp (4185 JP) tender as early as 19 March. Separately, SUNY RF filed a response to Inpria/JSR’s 6 March filing last night.
- My reading of JSR and SUNY RF’s filings suggests that the Court is unlikely to conclude that SUNY RF’s lawsuit will be harmed if JIC proceeds with the tender offer.
- JIC seems comfortable taking on the litigation risk (if required). The key risk remains timing. For a late April payment, gross/annualised spread is 0.6%/4.0%.
EQD | NIFTY Down: Where to BUY WEEKLY
- The NIFTY Index this week suddenly stopped its rally and started to correct.
- This week should close down and the next week may be also down, but if it is the odds are great for a LONG trade.
- Re-Enter the rally at prices between 21800 and 21150, this week or the next.
Another Brewing Fight for the Controlling Shareholding of Hanjin Kal?
- On 14 March, NPS announced that it has decided to vote against the re-appointment of the CEO Cho Won-tae as the executive director of Korean Air Lines.
- It was also announced on 14 March that GS Retail purchased a 1% stake in Hanjin Kal. In addition, Korean Air Lines also purchased a 1.2% stake in GS Retail.
- One of the growing probabilities of the changing shareholding structures is that KDB may be interested in selling its 10.6% stake in Hanjin Kal.
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