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

Event-Driven

<p>What a surprise. Lotte Chemical, once pursuing Hitachi Chemical, is now owning a 4.46% stake in Showa Denko, which beat Lotte in the Hitachi Chemical race.</p><hr><p><em>Below is Lotte Chemical's regulatory filing for the 1Q quarterly report. Here, it says that it owns a 4.46% stake.</em></p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/135/049/original/1.png?1590116665" class="editor-image img-responsive" data-smartkarma-image-id="135049"></figure><div class="content-caption">(Source: <a href="http://dart.fss.or.kr/dsaf001/main.do?rcpNo=20200515001484" target="_blank" rel="noopener">DART</a>)</div><hr><h2>How exactly did Lotte do it?</h2><p>Lotte disclosed in the same regulatory filing that it had begun to buy Showa Denko shares on March 13. In March, it had amassed a total of 3.8M shares (2.54%) for ₩88.4bil. Then in April, it had bought other 2.87M shares (1.92%) for ₩73.3bil, bringing up the total to 6.67M shares (4.46%).</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/135/051/original/2.png?1590116991" class="editor-image img-responsive" data-smartkarma-image-id="135051"></figure><h2>Block deals or bought directly in the market?</h2><p>There have been no official words on how Lotte had obtained these shares. But the local street speculates that Lotte had purchased the shares in the market. Below is the latest news report that quotes one industry source saying that Lotte had acquired the shares directly in the market in small quantities from March to April this year.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/135/056/original/4.png?1590117494" class="editor-image img-responsive" data-smartkarma-image-id="135056"></figure><div class="content-caption">(Source: <a href="https://view.asiae.co.kr/article/2020052209375771677" target="_blank" rel="noopener">The Asia Business Daily</a> - May 22, 2020)</div>

What a surprise. Lotte Chemical, once pursuing Hitachi Chemical, is now owning a 4.46% stake in Showa Denko, which beat Lotte in the Hitachi Chemical race.Below is Lotte Chemical's regulatory filing for the 1Q quarterly report. Here, it says that it owns a 4.46% stake.(Source: DART)How exactly did Lotte do it?Lotte disclosed in the same regulatory filing that it had begun to buy Showa Denko shares on March 13. In March, it had amassed a total of 3.8M shares (2.54%) for ₩88.4bil. Then in April, it had bought other 2.87M shares (1.92%) for ₩73.3bil, bringing up the total to 6.67M shares (4.46%).Block deals or bought directly in the market?There have been no official words on how Lotte had obtained these shares. But the local street speculates that Lotte had purchased the shares in the market. Below is the latest news report that quotes one industry source saying that Lotte had acquired the shares directly in the market in small quantities from March to April this year.(Source: The Asia Business Daily - May 22, 2020)

Lotte Chemical Is Buying Showa Denko Shares in Market: Now Holds 4.46%

Resonac Holdings

Lotte Chemical Is Buying Showa Denko Shares in Market: Now Holds 4.46%