In today’s briefing:
- Yashili (1230 HK)’s Pre-Conditional Offer From Mengniu
- Last Week in Event SPACE: Hitachi Transport, Shiga Bank, CP Food, AGL, Woodside/BHP, Yamada Denki
- Index Rebalance & ETF Flow Recap: KOSPI200, KQ150, CSI300, STAR50, SET50, China A50, HSCI, SenseTime
- Yashili’s HK$1.20 Privatisation Offer from Mengniu
- KOSPI 200 Rebalancing: Trade Short Covering Event for Deletions
- Asia-Pac Weekly Risk Arb Wrap: Alliance Aviation, AGL, Virtus, Yashili, Hitachi Transport
Yashili (1230 HK)’s Pre-Conditional Offer From Mengniu
- Yashili International Holdings (1230 HK) has announced a pre-conditional Offer, by way of a Scheme, from China Mengniu Dairy Co (2319 HK).
- The cancellation price of HK$1.20/share, a 31.9% premium to last close, and a 161% premium to the undisturbed price, is in line with the 16 March announcement.
- Conditions involve various business disposals and the exit of Danone SA (BN FP)‘s stake in Yashili; yet apart from timing, which is contingent on regulatory approvals, this looks done.
Last Week in Event SPACE: Hitachi Transport, Shiga Bank, CP Food, AGL, Woodside/BHP, Yamada Denki
- If Silchester’s activism towards Shiga (8366 JP) & Chugoku (8382 JP) is going to be fought, it is going to be fought in the Japanese media, not in the AGM convocation.
- The idea that the AGL Energy Ltd (AGL AU) de-merger could be thwarted is something which could dampen spirits on the stock near-term
- Hitachi Transport System (9086 JP) as a risk arb situation is trading wide. It should trade tighter.
Index Rebalance & ETF Flow Recap: KOSPI200, KQ150, CSI300, STAR50, SET50, China A50, HSCI, SenseTime
- The review cutoff for the FTSE All-World/All-Cap June QIR is 11 May. The changes to the MSCI indices for the May SAIR will be announced on 13 May Asia time.
- The review period for the KOSPI2 INDEX, KOSDAQ 150 Index, Shanghai Shenzhen CSI 300 Index, STAR50 INDEX and the SENSEX INDEX ended last week and there are changes.
- ETF inflows were larger than outflows for nearly all Asian markets. The largest inflows were in the Hang Seng H Share Index ETF (2828) and Vanguard Aust Shares Etf (VAS).
Yashili’s HK$1.20 Privatisation Offer from Mengniu
- Danone SA (BN FP) will sell to China Mengniu Dairy Co (2319 HK) its 25% Yashili stake for HK$1.20 per share. Post-completion, Mengniu will launch a privatisation offer at HK$1.20.
- The privatisation is subject to several pre-conditions, which carry low risk in our view. The key conditions are the headcount test and rejections by <10% of all disinterested shareholders.
- The offer for Yashili International Holdings (1230 HK) is attractive. At the last close, the gross spread to the offer is 30.4%. Buy up to HK$1.09 (implies an 85% deal probability).
KOSPI 200 Rebalancing: Trade Short Covering Event for Deletions
- Short-Selling is not possible after being deleted from the KOSPI 200. So, active short-covering for deletions is witnessed before and after the rebalancing implementation.
- CJ CGV (079160 KS) stands out the most at this point. Its short interest is 4.10% of SO, and the short interest has increased the most over the past month.
- The short-covering/price movement started to be observed from the end of the prior month. So, I’d consider building positions from the third week of this month.
Asia-Pac Weekly Risk Arb Wrap: Alliance Aviation, AGL, Virtus, Yashili, Hitachi Transport
- There are 37 – mostly firm – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
- One new deal this week: Qantas Airways (QAN AU) has entered into a Scheme to buy smaller airline Alliance Aviation Services (AQZ AU).
- Key updates took place for: AGL Energy Ltd (AGL AU), Virtus Health (VRT AU), Suchuang Gas Corp (1430 HK), Yashili International Holdings (1230 HK) & Hitachi Transport System (9086 JP).
Before it’s here, it’s on Smartkarma
