In today’s briefing:
- SK Square + SK Networks Merger Swap: A Guide to Pre-Merger Arb Spread Calculations
- Sanil Electric IPO Industry Analysis
SK Square + SK Networks Merger Swap: A Guide to Pre-Merger Arb Spread Calculations
- SK Square’s market cap exceeds SK Networks’ by over 10 times, qualifying this merger as small-scale. Thus, only SK Networks needs shareholder approval and grants appraisal rights solely to shareholders.
- The current arbitrage spread for SK Networks’ appraisal rights is 1.95%, and for the swap, it’s 4.16%. These are nominal values excluding trading costs and taxes.
- Today’s SK Square and SK Networks prices reflect arbitrage spreads. Yesterday’s 8% spread widened, focusing on narrowing appraisal rights and swap spreads, essential before next week’s announcement.
Sanil Electric IPO Industry Analysis
- With the development of new and renewable energy, transmission and distribution network bottlenecks are worsening in many countries, and there is a strong demand for new transmission and distribution networks.
- China is virtually excluded from competition for the US market. This situation has resulted in increased new orders for companies such as Sanil Electric.
- Our base case valuation of Sanil Electric is target price of 58,593 won, which is 95% higher than the high end of the IPO price range (30,000 won).
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