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

Wonik Merger Swap: Div-Adjusted Yield Is Now at 4.17% - Cancellation Risk Is Slim

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/26912" target="_blank" data-smartkarma-citation="entities:26912:1">Wonik IPS (240810 KS)</a> announced on Oct 29 that it would merge with Wonik Tera Semicon (123100 KS) at a swap ratio of 0.7394724. Ceiling for stock purchase is set at ₩50bil for IPS and ₩30bil for Tera Semicon.</li>
<li>Currently, arb spread isn't really at a glamorous level. At the Nov 5 closing prices, arb spread is at 3.24%. As for stock purchase spread, IPS is currently giving a decent 6.88% while Tera Semicon is at 3.49%.</li>
<li>Wonik already attempted this merger in 2016, but they couldn't get an approval from Tera Semicon shareholders. This dynamic may lead to an interesting situation where we may have spread openings to attract arb traders who can help reduce the number of stock purchase rights exercised.</li>
</ul>



Wonik IPS (240810 KS) announced on Oct 29 that it would merge with Wonik Tera Semicon (123100 KS) at a swap ratio of 0.7394724. Ceiling for stock purchase is set at ₩50bil for IPS and ₩30bil for Tera Semicon.
Currently, arb spread isn't really at a glamorous level. At the Nov 5 closing prices, arb spread is at 3.24%. As for stock purchase spread, IPS is currently giving a decent 6.88% while Tera Semicon is at 3.49%.
Wonik already attempted this merger in 2016, but they couldn't get an approval from Tera Semicon shareholders. This dynamic may lead to an interesting situation where we may have spread openings to attract arb traders who can help reduce the number of stock purchase rights exercised.


Wonik Merger Stock Swap: Summary & Trading Opportunities

Wonik Ips

Wonik Merger Stock Swap: Summary & Trading Opportunities