On October 18, according to the Star Market Daily (Reporter Xu Cihao), Sunart Retail's full tender offer acquisition has new developments.

Last night (October 17), Sunart Retail Limited (referred to as Sunart Retail) issued five consecutive trading disclosure announcements on the Hong Kong Stock Exchange, involving its potential voluntary full tender offer transaction. At the same time, trading disclosure information from multiple financial institutions was also published, including JPMorgan and a subsidiary of China International Capital Corporation.

According to the disclosure, on October 16, a company under China International Capital Corporation conducted multiple derivative instrument trades in the capital markets. These trades varied in amount and quantity. Specifically, these trades covered the operation of clearing derivatives contracts, as well as the clearing, closing, or termination of proprietary trading positions in response to customer needs.

Although this series of actions may seem ordinary, it is worth noting in the current context of Sunart Retail possibly facing a full tender offer acquisition.

According to the announcement, China International Capital Corporation is a Category 5 connected person related to the offeree company. On September 27, Sunart Retail issued a suspension announcement, stating that the trading halt was in accordance with the company's takeover and merger rules. At that time, there were media reports that China International Capital Corporation was involved in the recent merger and acquisition case of Sunart Retail (Dailrunfa + Auchan).

At the same time, on the same day, JPMorgan also conducted multiple transactions involving other categories of securities (such as equity swaps), as well as the clearing of derivative instruments contracts. It is worth noting that JPMorgan's role in this transaction is not that of a regular trader, but a exempted proprietary trading dealer associated with the intentional offeror.

The term 'intentional offeror' typically refers to those who intend to make a tender offer to all shareholders of the relevant company. In this context, this potential intentional offeror may be brewing a full tender offer acquisition for Sunart Retail.

On October 15, Sunart Retail announced that the company's board of directors received a contact letter from a potential tender offeror on September 27, 2024. The letter clearly expressed the offeror's voluntary conditional tender offer with preconditions regarding all the company's issued shares.

At the same time, the announcement revealed that as the controlling shareholder, Alibaba and the potential tender offeror are discussing non-revocable terms regarding the possible tender offer, and Alibaba Group is also engaging in discussions with several other individuals, undoubtedly fueling market speculation and expectations.

Huang Lichong, CEO of Huisheng International Capital, stated in an interview with the STAR Daily that the potential acquisition of Sunart Retail implies a potential increase in demand for the company's shares in the market. In this scenario, financial institutions may engage in clearing derivative contracts to hedge or realize profits, or to manage risks associated with existing positions. If financial institutions anticipate future price fluctuations, they may hedge these risks through derivative instruments.

Huang Lichong further analyzed that JPMorgan, as an exempt proprietary trading dealer with connections to the potential tender offeror, may be trading to support the acquirer's acquisition activities. "This may include providing liquidity support to the acquirer or managing financial risks associated with the acquisition process."

In his view, financial institutions engaging in such transactions at this time may be managing risks related to Sunart Retail's potential acquisition, especially amidst market turbulence or increasing uncertainty.

Seizing market opportunities, Huang Lichong believes that the acquisition announcement may lead to stock price fluctuations, with financial institutions leveraging these fluctuations for arbitrage or other trading strategies. Additionally, to support the acquisition, as institutions associated with the potential tender offeror, financial institutions' transactions may aim to assist the acquisition process, such as providing liquidity or hedging services.

As of the time of publication, Sunart Retail closed at HKD 2.24, up 6.16%, with a market cap of 21.369 billion Hong Kong dollars.