See the 5th issue of the notes below:
Special Situations
SNNY bidding war ended up with a hostile takeover offer by Mr. Torsoe. Torsoe's superior bids were ignored by the board and now he's going straight to shareholders with an increased price of $23/share. There’s 13.5% spread outstanding at the moment. The tender should be announced soon. Downside is protected by the competing bid. Trading volume is very low.
CMO - interesting piece by Clarkstreetvalue - Capstead Mortgage is doing a reverse merger and shareholders will be paid 1.1575x BV in cash. After the merger, CMO should trade close to BV. At Q2 BV, there's an 8% spread. Real estate NAV shouldn't change much until close, so BV volatility risk is limited.
TMC - a very weird SPAC story by YetAnotherValueBlog. The company looks like a scam, however, it has the potential for a massive squeeze due to very high redemptions and low float.
0127.HK might get privatized soon. Shares are currently suspended and some kind of announcement should be released soon. The price has already popped, but the stock is still cheap compared to historical valuation levels and peers. 75% are owned by billionaire Joseph Lau (former chair) and his wife. No other shareholders own more than 5%. The company has recently sold a portion of its Evergrande holdings and may continue to do so in the future.
3632.T. Glee, a Japanese diversified mobile developer, has launched a huge buyback program for 35m shares. Excluding insiders, that is 66% of the float.
Classic Merger Arbitrage
JOBS privatization spread widened to 16%. Now could be an interesting point for a swing trade. See more in binder #2.
HWIS is getting acquired by a credit union. Price range is between $26.47 and $27.42/share. Recently, there's been an increase in small community bank acquisitions by credit unions. The strategic rationale makes sense and I think the merger will be completed. Gross spread is 7%-11%. The deal should close in Q2'22, so IRR is not bad.
SIQ.AX is targeted by PE firms TPG Global and Potential Capital. The offer is non-binding, which means the risk is high and buyers can still drop everything after the DD. 10% spread. The valuation seems full, but still below the peer Sg Fleet. Downside is 16%.