In today’s briefing:
- Unsolicited Partial Offer for 19% of Sun Corp (6736 JP) – Play on Cellebrite from SPAC Sponsor
- Yuanta/P-Shares Taiwan Div+ ETF Rebalance: One Surprise as Round-Trip Trade Hits US$2.3bn
- Mandatory Block Deal Pre-Announcement Requirement in Korea Starting 24 July: Impact on Block Deals
- Sun Corporation (6736 JP): True Wind’s Hostile Partial Offer
- Tender Offer of Jeisys Medical by Archimed Group
- S&P/ASX Index Rebalance (June 2024): Changes, Flows, Impact, Shorts & Positioning
- Taiwan Top 50 ETF Rebalance: Asia Vital Components to Replace Chang Hwa Commercial Bank
- Jun24 S&P 500/400/600 Index Rebal – Both More and Less Interesting Than You Think, But 3 Big Buys
- CPMC Holdings (906.HK) – ORG Can’t Afford to Lose, But Baosteel Is a Step Ahead
- Interglobe Aviation : Block Deal Trade Special Situations and Tactical Trade Strategy
Unsolicited Partial Offer for 19% of Sun Corp (6736 JP) – Play on Cellebrite from SPAC Sponsor
- Sun Corp (6736 JP) for years has been a play on its investment holding in Cellebrite DI (CLBT US), brought to market in a $2.4bn SPAC deal announced 30Aug2021.
- The SPAC entity was an entity called TWC Tech Holdings II Corp (TWC = “True Wind Capital”). The next day, Cellebrite DI (CLBT US) was born, trading up to US$11.00+.
- Sun Corp (6736 JP)‘s value realisation path had begun. Today, a True Winds entity announced a Partial Tender Offer – unsolicited, unannounced previously – on Sun Corp, for 19.0%.
Yuanta/P-Shares Taiwan Div+ ETF Rebalance: One Surprise as Round-Trip Trade Hits US$2.3bn
- There are 5 adds and 5 deletes to the Yuanta/P-Shares Taiwan Dividend Plus ETF in June with implementation taking place from 21-27 June.
- The constituent changes and capping changes result in an estimated one-way turnover of 12.8% and in a one-way trade of TWD 37.2bn (US$1.15bn).
- The changes are in line with our forecasts with one exception. Uni President Enterprises (1216 TT) was not added and Yulon Finance (9941 TT) was added instead.
Mandatory Block Deal Pre-Announcement Requirement in Korea Starting 24 July: Impact on Block Deals
- Starting 24 July, there will be a mandatory pre-announcement requirement for block deal sales in Korea.
- In other words, the major shareholders of the Korean companies need to report publicly prior to their actual sales of their stakes in these companies through block deal sales.
- The potential block deal sales candidates could continue to underperform on average the companies that are selling these stocks in potential block deal sales in the next several weeks.
Sun Corporation (6736 JP): True Wind’s Hostile Partial Offer
- True Wind has launched a hostile partial tender offer for Sun Corp (6736 JP) for a minimum (3.8m) and maximum (4.2m) shares at JPY4,400, 19.2% premium to the undisturbed price.
- The offer was prompted by frustration with the Board’s lack of urgency in closing the disparity between Sun Corp’s market cap and the value of its Cellebrite DI (CLBT US) stake.
- The Board has three options: do nothing (low probability), find a white knight bidder (high probability), or commit to selling/distributing its Cellebrite stake (medium probability).
Tender Offer of Jeisys Medical by Archimed Group
- On 10 June, it was announced that France’s Archimed Group is conducting a tender offer of 55.72 million shares of Jeisys Medical (287410 KS) (72% of outstanding shares).
- The tender offer period will run from 10 June to 22 July. The tender offer price is 13,000 won.
- Archimed also signed a contract to purchase the entire stake (23.2%) held by Kang Don-Hwan (Chairman of Jeisys Medical) and (3.2%) held by a Director Myung-Hoon Lee.
S&P/ASX Index Rebalance (June 2024): Changes, Flows, Impact, Shorts & Positioning
- There is 1 change for the S&P/ASX20 Index, 1 change for the S&P/ASX50 Index, 2 changes for the S&P/ASX100 Index, and no regular changes for the S&P/ASX200 INDEX in June.
- The surprise inclusion of Wisetech Global (WTC AU) means that positioning is likely to be lower than the passive buying and there could be a move higher in the stock.
- There will be one adhoc inclusion to the S&P/ASX 200 (AS51 INDEX) at the close on 19 June following Cie De Saint-Gobain (SGO FP)’s acquisition of CSR Ltd (CSR AU).
Taiwan Top 50 ETF Rebalance: Asia Vital Components to Replace Chang Hwa Commercial Bank
- Asia Vital Components (3017 TT) will replace Chang Hwa Commercial Bank (2801 TT) in the Yuanta/P-Shares Taiwan Top 50 ETF at the close of trading on 21 June.
- Asia Vital Components (3017 TT) was added to a global index at the end of May and the stock has dropped nearly 25% from its highs.
- Asia Vital Components (3017) trades at a much higher forward PE compared to its peers while Chang Hwa Commercial Bank (2801) trades at a lower PB compared to its peers.
Jun24 S&P 500/400/600 Index Rebal – Both More and Less Interesting Than You Think, But 3 Big Buys
- On Friday, the S&P index committee announced the June 2024 changes to the three major indices in the S&P1500 universe.
- KKR, Crowdstrike (CRWD), and GoDaddy (GDDY) replace Robert Half (RHI), Comerica (CMA), and Illumina (ILMN) in the S&P500. There are 6 ADDs to S&PMidCap400, 13 DELETEs from Sm600.
- There are some BIG and impactful flows here. Some are very big. Netted 2-way flow on 21 June is ~US$66-80bn. But as always, details matter.
CPMC Holdings (906.HK) – ORG Can’t Afford to Lose, But Baosteel Is a Step Ahead
- Baosteel’s SOE background helps bring more advantages- This deal is a consolidation of assets under SASAC, which may involve some strategic intent at national level. Baosteel has an upper hand.
- ORG cannot afford to fail considering the strategic significance of CMPC for ORG. Major shareholder of CPMC Zhang Wei has picked ORG side, making it maintain the hope of winning.
- For arbitrageurs, the good news is CPMC would be acquired by either Changping Industrial or ORG, with high certainty.Baosteel is also worth watching since it could be a new leader.
Interglobe Aviation : Block Deal Trade Special Situations and Tactical Trade Strategy
- Impending block deals which generally create supply over-hang on the stock leads to a negative impact on the stock.
- These block deals generally include selling promoters and big funds at a price discount to its current market price.
- Historically, such events suggest once the block deal is done; stock reacts positively creating a Special Situation Opportunity
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