In today’s briefing:
- Rakuten Bank (5838) IPO – Let’s Go! (Part 2)
- Arclands (9842) Overpays for Arclands Service Holdings (3085)
- Merger Arb Mondays (17 Apr) – Newcrest, Essential, Healius, Lian Beng, Golden Energy, Arcland
- Aiming for Price Movement Patterns with Low Market Exposure in MSCI Korea May Review
- Rights Arbitrage
- Weekly Deals Digest (16 Apr) – Lian Beng, Arcland, Essential, Genesis, Newcrest, Rakuten Bank, ZJLD
- Liquid Universe of European Ordinary and Preferred Shares: April ‘23 Report
Rakuten Bank (5838) IPO – Let’s Go! (Part 2)
- SBI Sumishin Net Bank (7163 JP) lowered its listing price vs what were already lowered expectations from a year prior. Then Rakuten Bank (5838 JP) lowered its IPO range.
- SBI Sumishin dilly-dallied around IPO price for three days then went nuts, rising 40% as of Friday morning. Rakuten Bank’s IPO looks dirt cheap now.
- But it is worthwhile comparing it on a spectrum of OTHER Japanese banks and neobanks.
Arclands (9842) Overpays for Arclands Service Holdings (3085)
- On Friday Arcland Sakamoto (9842 JP) and restaurant franchise subsidiary Arcland Service (3085 JP), which it launched in 1993 and IPOed in 2007, announced they had agreed to merge.
- Arcland SHD runs 18 restaurant brands, of which Katsuya is most well-known, with a total of 750 or so restaurants managed globally. It has grown consistently.
- The merger ratio is at an all-time high for Arcland SHD. This should be a done deal but I might expect some complaints. I think Arclands is probably overpaying.
Merger Arb Mondays (17 Apr) – Newcrest, Essential, Healius, Lian Beng, Golden Energy, Arcland
- We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
- Highest spreads 111 Inc (YI US), Alliance Aviation Services (AQZ AU), Estia Health (EHE AU), United Malt Group Ltd (UMG AU), Aag Energy Holdings (2686 HK), Origin Energy (ORG AU).
- Lowest spreads – Healius (HLS AU), Essential Metals (ESS AU), Liontown Resources (LTR AU), Lian Beng (LBG SP), Golden Energy & Resources (GER SP), Mincor Resources NL (MCR AU).
Aiming for Price Movement Patterns with Low Market Exposure in MSCI Korea May Review
- We should aim for price movement patterns with relatively low market exposure. One of them is the post-effective upward price movement of deletions.
- The relative price performance for one week after the implementation compared to KOSPI 200 was consistently positive, ranging from 2.41% to 6.82%.
- Given the recent price movement of four deletion candidates, there is again a high possibility that the price distortion caused by MSCI flow will revert after the effective date.
Rights Arbitrage
- The rights issue is fully underwritten and should bolster the balance sheet. This is akin to a placing by market volume. There are arbitrage opportunities (although not limitless borrowing available).
- The arbitrage is a long position on a synthetic put. Rights will trade up to 17:30 on 3 May.
- The new shares coming is a giant block compared to the existing shares outstanding. There may be a wave of selling from 4 May, and the shares should drop then.
Weekly Deals Digest (16 Apr) – Lian Beng, Arcland, Essential, Genesis, Newcrest, Rakuten Bank, ZJLD
- A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
- ECM developments – Rakuten Bank (5838 JP), ZJLD Group (ZJLD HK), Mankind Pharma (6596876Z IN) and Merdeka Battery Materials (2012725D IJ) IPOs.
- Event-Driven developments – Lian Beng (LBG SP), Arcland Service (3085 JP), Essential Metals (ESS AU), Genesis Minerals (GMD AU), Healius (HLS AU), Newcrest Mining (NCM AU).
Liquid Universe of European Ordinary and Preferred Shares: April ‘23 Report
- Since mid-March, spreads have generally tightened across our liquid universe (6 have widened, 12 tightened, 1 at same level).
- Possible trades long ordinary / short preferred shares: Fuchs Petrolub, Henkel, Handelsbanken, SSAB Svenska Stal.
- Possible trades long preferred / short ordinary shares: Sixt, VW, Danieli, Grifols, Atlas Copco.
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