In today’s briefing:
- SK Discovery Launches Opportunistic Partial Tender on SK Chemicals To Buy SK Bio CHEAP
- SK Chemicals Cash Offer: Complete Details
- Merger Arb Mondays (05 Sep) – Link Admin, Ramsay, Genex, ResApp, Infomedia, DTAC/True, Giordano
- New Regulations on Split-Off Listing in Korea: Complete Details & Trading Implications
- S&P ASX Sep 22 Rebal: Decent Impacts but Avoid Short Buildup
- HAL Holding/Royal Boskalis Westminster: Sweetened Offer
SK Discovery Launches Opportunistic Partial Tender on SK Chemicals To Buy SK Bio CHEAP
- On Friday morning, Sk Discovery (006120 KS), current owner/controller of 36.56% of Sk Chemicals Co Ltd/New (285130 KS) announced an opportunistic Partial Offer to buy 5.22% more at KRW 108,800/share.
- The stated purpose in the Tender Offer Announcement is “Stability of Management Rights.” This will get SK Discovery to 41.77%, permitting consolidation of SK Chemicals.
- The real reason?SK Chemicals shares are trading at less than one-third the value of the SK Bioscience (302440 KS) shares they hold (with net cash and others free).
SK Chemicals Cash Offer: Complete Details
- This is a cash offer. So, there is no stock swap arbitrage here. To participate in this tender, we must buy SK Chemicals shares by the 19th.
- We have proration risk. Discovery will buy on a pro-rata basis if exceeding the target volume. So, we could be at a loss.
- This is an over-the-counter transaction. So both STT and CGT apply. The STT rate is 0.43% of the tendered amount and we have a 22% CGT rate for the profit.
Merger Arb Mondays (05 Sep) – Link Admin, Ramsay, Genex, ResApp, Infomedia, DTAC/True, Giordano
- We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Indonesia, Malaysia, Thailand and Chinese ADRs.
- Highest spreads – 21Vianet Group (VNET US), Alliance Aviation Services (AQZ AU), Ramsay Health Care (RHC AU), Infomedia Ltd (IFM AU), Link Administration (LNK AU), True Corp Pcl (TRUE TB).
- Lowest spreads – MyDeal.com.au Ltd (MYD AU), MACA Ltd (MLD AU), Nearmap Ltd (NEA AU), Dongzheng Automotive Finance (2718 HK), Link Net (LINK IJ), Tassal (TGR AU), Frasers Hospitality Trust.
New Regulations on Split-Off Listing in Korea: Complete Details & Trading Implications
- The Korea FSC finalized the additional investor protection measures: 1. stricter disclosure rules, 2. tighter listing requirements, and 3. mandatory appraisal rights.
- The retroactive application period is five years. Companies that have been split off five years ago from the effective date are also subject to these new rules.
- We can play LONG/SHORT aimed at staggered spreads, considering that the pricing period is 2M VWAP and that a downward price revision intensifies towards the announcement with mandatory appraisal rights.
S&P ASX Sep 22 Rebal: Decent Impacts but Avoid Short Buildup
- The index changes for the S&P ASX Index family for the September 2022 Rebalance were announced after the close on Friday.
- There will be one change for the ASX 100 index and 8 changes for the ASX 200 Index. The ASX 300 Index will have 16 ADDs and 12 DELs.
- In this insight, we take a closer look at our expectations for index flows and potential trading ideas.
HAL Holding/Royal Boskalis Westminster: Sweetened Offer
- HAL increased the offer price by 3.1%, to €33.00, as final price, which represent a premium of c. 32%. A surprising move, as guidance provided no reason for doing so.
- HAL and Stichting Hyacinth own c.55.6% (27 July), vs. 46.2% upon offer announcement. Boskalis and HAL agreed that if HAL holds at least 95%, HAL will initiate a squeeze-out and delisting.
- The offer is now recommended by Boskalis’ Boards and the acceptance period has been extended until 6 September (inclusive). Tender.
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