Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

I investigate special situations, pairs, and index rebalancing trades in Korea.

Korea / Special Sits, Pairs, Index Rebalancing

HYBE Subscription Rights at a Decent Arb Yield: Why Not Trading It

HYBE (Big Hit Ent) Rights Offer Presents a Nice Setup for a Classic Arb Trade

HYBE Sets a Ceiling for Offering Price at a Nicely Discounted Level for Arb Setup

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

Event-Driven

<h2>Subscription</h2><p>HYBE offers 2.227,848 shares in this offering. The main subscription reached 2,167,124 shares. We then had an additional 103,502 over-subscriptions, settling at a 0.587 allocation for each over-subscription.</p><p>So, we hit a final subscription rate of 101.92% at the target offering of 2,227,848 shares, leaving no forfeited share for a public subscription.</p><table class="table table-striped">
<colgroup>
<col width="300">
<col width="300">
</colgroup>
<tbody>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Subscription"}'>Subscription</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Offering"}'>Offering</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":2227848}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>2,227,848 shares</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Main subscription"}'>Main subscription</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":2167124}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>2,167,124 shares</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Over-subscription"}'><strong>Over-subscription</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":103502}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'><strong>103,502 shares</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Total subscription"}'><strong>- Total subscription</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":2270626}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[-2]C[0]+R[-1]C[0]"><strong>2,270,626 shares</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Final subscription rate"}'><strong>- Final subscription rate</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1.0192}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>101.92%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Allocation per over-subscription"}'>- Allocation per over-subscription</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.586693976927982}' data-sheets-numberformat='{"1":2,"2":"0.00000000","3":1}'>0.58669398 share</td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><h2>Shares outstanding</h2><p>It is now official that all of the offerings have found owners, resulting in a 6.25% increase in outstanding shares with a 5.89% shareholding dilution. The total shares are now 37,851,608 shares.</p><table class="table table-striped">
<colgroup>
<col width="300">
<col width="300">
</colgroup>
<tbody>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Allocation"}'>Shares outstanding</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Offering"}'>Offering</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":2227848}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>2,227,848 shares</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Capital increase"}'><strong>Capital increase</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.0625}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>6.25%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Dilution"}'>Dilution</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.0589}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>5.89%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Shares outstanding before the offering"}'>Shares outstanding before the offering</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":35623760}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>35,623,760 shares</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Shares outstanding after the offering"}'><strong>Shares outstanding after the offering</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":37851608}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[-1]C[0]+R[-4]C[0]"><strong>37,851,608 shares</strong></td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><h2>Non-float adjustment</h2><p>The regulatory filing doesn't disclose the information as to the major shareholder's participation in this offering. But the local news outlet, Hankyung, reported yesterday that both Bang Si-hyuk and Netmarblet took all the new shares allocated to them.</p><p>So, their shareholding won't change, and we should see a minimal change in the non-float, even if none of the special affiliated persons/the ESOP took any new share. </p><table class="table table-striped">
<colgroup>
<col width="200">
<col width="100">
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"Shareholding"}'>Non-float adjustment</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Before offering"}'>Before the offering</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"%"}'>%</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"After offering"}'>After the offering</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"%"}'>%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Bang Si-hyuk"}'><strong>Bang Si-hyuk</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":12377337}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'><strong>12,377,337</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.34744611461563857}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[0]C[-1]/R7C4"><strong>34.74%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":13151402}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'><strong>13,151,402</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.3474463224917684}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[0]C[-1]/R8C4"><strong>34.74%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Netmarble"}'><strong>Netmarble</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":7087569}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'><strong>7,087,569</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.19895623033615767}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[0]C[-1]/R7C4"><strong>19.90%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":7530542.0625}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[0]C[-2]*(1+R[-17]C[0])"><strong>7,530,542</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.19894906611365096}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[0]C[-1]/R8C4"><strong>19.89%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Special affiliated persons"}'>Special affiliated persons</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1260244}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=20725150-R[-2]C[0]-R[-1]C[0]">1,260,244</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.03537650152594785}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[0]C[-1]/R7C4">3.54%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1260244}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[0]C[-2]">1,260,244</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.03329433190790732}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[0]C[-1]/R8C4">3.33%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"ESOP"}'>ESOP</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1421691}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>1,421,691</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.03990850488550338}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[0]C[-1]/R7C4">3.99%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1421691}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>1,421,691</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.03755959324105861}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[0]C[-1]/R8C4">3.76%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Non-float"}'><strong>- Non-float</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":22146841}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=sum(R[-4]C[0]:R[-1]C[0])"><strong>22,146,841</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.6216873513632475}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[0]C[-1]/R7C4"><strong>62.17%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":23363879.0625}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=sum(R[-4]C[0]:R[-1]C[0])"><strong>23,363,879</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.6172493137543853}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[0]C[-1]/R8C4"><strong>61.72%</strong></td>
</tr>
<tr><td colspan="5" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table>

SubscriptionHYBE offers 2.227,848 shares in this offering. The main subscription reached 2,167,124 shares. We then had an additional 103,502 over-subscriptions, settling at a 0.587 allocation for each over-subscription.So, we hit a final subscription rate of 101.92% at the target offering of 2,227,848 shares, leaving no forfeited share for a public subscription.





Subscription

Offering
2,227,848 shares


Main subscription
2,167,124 shares


Over-subscription
103,502 shares


- Total subscription
2,270,626 shares


- Final subscription rate
101.92%


- Allocation per over-subscription
0.58669398 share

Source: DART

Shares outstandingIt is now official that all of the offerings have found owners, resulting in a 6.25% increase in outstanding shares with a 5.89% shareholding dilution. The total shares are now 37,851,608 shares.





Shares outstanding

Offering
2,227,848 shares


Capital increase
6.25%


Dilution
5.89%


Shares outstanding before the offering
35,623,760 shares


Shares outstanding after the offering
37,851,608 shares

Source: DART

Non-float adjustmentThe regulatory filing doesn't disclose the information as to the major shareholder's participation in this offering. But the local news outlet, Hankyung, reported yesterday that both Bang Si-hyuk and Netmarblet took all the new shares allocated to them.So, their shareholding won't change, and we should see a minimal change in the non-float, even if none of the special affiliated persons/the ESOP took any new share. 









Non-float adjustment
Before the offering
%
After the offering
%


Bang Si-hyuk
12,377,337
34.74%
13,151,402
34.74%


Netmarble
7,087,569
19.90%
7,530,542
19.89%


Special affiliated persons
1,260,244
3.54%
1,260,244
3.33%


ESOP
1,421,691
3.99%
1,421,691
3.76%


- Non-float
22,146,841
62.17%
23,363,879
61.72%

Source: DART



HYBE Offering: Over-Subscription Allocation, Non-Float Change, & Trading Schedule