In today’s briefing:
- Poly Culture (3636 HK): H Share Class Meeting on 3 November
- Poly Culture (3636 HK)’s Offer: 3rd Nov Shareholder Vote. Still Get Involved
- Lansen Pharma (503 HK): The Chairman Makes An Offer
- Analyzing Proactive Flow Trading Targeting SK Telecom’s Passive Movements
- HSCI Index Rebalance Preview: Low Probability Add in December
- Costa Group (CGC AU): Paine Schwartz’s Final Proposal Poses a Dilemma
- S&P/ASX Index Rebalance Preview: Changes from Now to December
- Lotte Non-Life Insurance: Who Will Buy?
- Quiddity Leaderboard BSE/SENSEX Dec 23: AllCap Sep 23 Rebal Done; Some Changes to Expectations
- EQD | Nikkei 225 (NKY) Enters WEEKLY OVERBOUGHT Resistance Area
Poly Culture (3636 HK): H Share Class Meeting on 3 November
- The Poly Culture Group Corp H (3636 HK) H Shareholders’ class meeting is scheduled for 3 November. The IFA considers the HK$8.88 per H share offer fair and reasonable.
- The key condition is approval by at least 75% independent H Shareholders (<10% of all independent H Shareholders rejection). No independent H Shareholder holds a blocking stake.
- The offer’s 77.6% premium to the undisturbed price and shareholder structure helps the vote. At the current price and for the 23 November payment, the gross/annualised spread is 3.3%/19.2%.
Poly Culture (3636 HK)’s Offer: 3rd Nov Shareholder Vote. Still Get Involved
- Back on the 23 June, SOE-backed Poly Group tabled an HK$8.88 bid per Poly Culture Group (3636 HK) H Share and RMB8.17386240 per Domestic Share. Terms were declared final.
- This Merger by Absorption Offer incorporates a Scheme-like vote. There is no tendering condition. The premium to last close is 77.6%; and a 112.5% premium to the five-day closing average.
- The Composite Doc is out. Independent H-shareholders get to vote on the transaction on the 3rd of November. Payment is expected on or before the 23 November. I’d get involved.
Lansen Pharma (503 HK): The Chairman Makes An Offer
- Specialty prescription drug manufacturer Lansen Pharmaceutical Holdings Co, Ltd. (503 HK) has been a perennial takeover target. And now we have an Offer.
- Wu Zhen Tao, NED and Chairman of Lansen, has made an Offer for shares not indirectly held, of HK$1.80/share, by way of a Scheme, a 26.76% premium to last close.
- This looks done. Get involved if small-cap illiquid arbs are your thing.
Analyzing Proactive Flow Trading Targeting SK Telecom’s Passive Movements
- As of last Friday, SKT has utilized 86.2 billion won out of the allotted 300 billion won for share buybacks, resulting in the acquisition of 1,810,242 shares.
- If there are indications of the foreign room potentially falling to a risky level, SKT will likely proceed with an aggressive buyback, targeting 20-30% of the daily trading volume.
- Another particularly intriguing observation is the absence of local retail flow directed towards SKT. This indicates there is still potential momentum for an upward price movement at this juncture.
HSCI Index Rebalance Preview: Low Probability Add in December
- There have only been 7 new listings on the HKEX (388 HK) in the third quarter of the year so far.
- Of those stocks, only Keep Inc (3650 HK) has a chance of being added to the Hang Seng Composite Index in December and then into Southbound Stock Connect.
- Keep Inc (3650 HK) is the largest online fitness platform in China and the name recognition could bring in substantial flows via Southbound Stock Connect.
Costa Group (CGC AU): Paine Schwartz’s Final Proposal Poses a Dilemma
- Costa Group Holdings (CGC AU) has disclosed a revised non-binding indicative proposal from Paine Schwartz Partners at A$3.20 per share, 9.6% lower than the previous offer on a like-for-like basis.
- The weak CY23 outlook impacted the debt that could be taken on to meet the IRR hurdles of the previous offer. The revised offer is the best and final offer.
- The Board faces a dilemma as the offer is light, but some shareholders will want the Board to accept as trading volatility making Costa more suited to the private market.
S&P/ASX Index Rebalance Preview: Changes from Now to December
- Privatisations could lead to two/three S&P/ASX 200 (AS51 INDEX) constituents being delisted in October/November and that means ad hoc inclusions to maintain the number of constituents at 200.
- Then there could be one change for the S&P/ASX 20 Index and two changes for the S&P/ASX 200 (AS51 INDEX) at the regular rebalance in December.
- The impact on the potential adds/deletes for the S&P/ASX 200 (AS51 INDEX) is high at between 7.5-23 days of ADV to trade from passive trackers.
Lotte Non-Life Insurance: Who Will Buy?
- It was reported in numerous local media that the sale process of Lotte Non Life Insurance Co (000400 KS) could start in October 2023.
- There are four companies including Shinhan Financial (055550 KS), Hana Financial (086790 KS), Woori Financial Group (316140 KS), and Kyobo Life Insurance that may be interested in acquiring Lotte Non-Life Insurance.
- Minority shareholders are not likely to benefit from this potential huge management M&A premium of Lotte Non-Life Insurance.
Quiddity Leaderboard BSE/SENSEX Dec 23: AllCap Sep 23 Rebal Done; Some Changes to Expectations
- In this insight, we take a look at the Potential ADDs/DELETEs for the BSE SENSEX, 100, and 200 Indices in the December 2023 Rebalance.
- The BSE AllCap index Rebalance was completed in September 2023. There were 77 ADDs and 73 DELs.
- Since the BSE AllCap index is the main universe for the BSE 200, 100, and SENSEX indices, there have been some changes to our December 2023 index change expectations.
EQD | Nikkei 225 (NKY) Enters WEEKLY OVERBOUGHT Resistance Area
- The Nikkei 225 INDEX is getting WEEKLY OVERBOUGHT after just +1 week up. Rallying further during the next 2-3 weeks may be hard, it could stall or fall.
- If the index rallies further this week, it could fall the following week. Alternatively it could stall this week and rally the following week/s, but OVERBOUGHT status won’t go away.
- 34256 is the Q3 resistance target on CC=+3, this should be a hard barrier to breach. An earlier barrier is Q3 resistance on the Gen.Pattern Boxplot = 33835.
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