IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>On 2 April, <a href="https://www.smartkarma.com/entities/austal-ltd" target="_blank" data-smartkarma-citation="entities:14420:1" rel="noopener">Austal Ltd (ASB AU)</a> rejected a non-binding proposal from <a href="https://www.smartkarma.com/entities/hanwha-ocean-co-ltd" target="_blank" data-smartkarma-citation="entities:12531:1" rel="noopener">Hanwha Ocean (042660 KS)</a> at A$2.825 due to concerns about obtaining Australian and US regulatory approvals. </li>
<li>The Board’s claims are on shaky grounds. On 1 May, the AFR reported that Australian Defence Minister Richard Marles had no concerns with Hanwha’s privatisation bid. </li>
<li>The Board’s rejection is a clumsy attempt to negotiate better terms, such as a bump, ticking fees, or significant break fees. At the last close, the gross spread was 21.8%. </li>
</ul>


On 2 April, Austal Ltd (ASB AU) rejected a non-binding proposal from Hanwha Ocean (042660 KS) at A$2.825 due to concerns about obtaining Australian and US regulatory approvals. 
The Board’s claims are on shaky grounds. On 1 May, the AFR reported that Australian Defence Minister Richard Marles had no concerns with Hanwha’s privatisation bid. 
The Board’s rejection is a clumsy attempt to negotiate better terms, such as a bump, ticking fees, or significant break fees. At the last close, the gross spread was 21.8%. 


Austal (ASB AU): Spurned Suitor, Hanwha Ocean, Gets a Vote of Confidence

<ul>
<li>
<a href="https://www.smartkarma.com/entities/austal-ltd" target="_blank" data-smartkarma-citation="entities:14420:1" rel="noopener">Austal Ltd (ASB AU)</a> is drawing takeover interest from Cerberus Capital, <a href="https://www.afr.com/street-talk/cerberus-capital-management-eyes-austal-takeover-has-citi-on-board-20230615-p5dgx2" target="_blank" rel="noopener">according to AFR</a>. Cerebus joins Arlington Capital Partners and Bondi Partners as rumoured suitors, increasing the bid odds.</li>
<li>Takeover interest in Austal is driven by the desire to capitalise on the opportunities presented by the AUKUS defence pact between Australia, the US and the UK. </li>
<li>Andrew Forrest's 19.34% stake can make or break a deal. Peer multiples point to an offer of at least A$2.80, a 22% premium to the last close.  </li>
</ul>



Austal Ltd (ASB AU) is drawing takeover interest from Cerberus Capital, according to AFR. Cerebus joins Arlington Capital Partners and Bondi Partners as rumoured suitors, increasing the bid odds.
Takeover interest in Austal is driven by the desire to capitalise on the opportunities presented by the AUKUS defence pact between Australia, the US and the UK. 
Andrew Forrest's 19.34% stake can make or break a deal. Peer multiples point to an offer of at least A$2.80, a 22% premium to the last close.  


Austal (ASB AU): Attracting Takeover Interest

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>It is relatively low-hanging fruit to "further propel the renmimbi's internationalisation" and for HKEX, it will "cement HK's position as the premier offshore renmimbi financing center."</li>
<li>The Conundrum: the more active investors decide they like <a href="https://www.smartkarma.com/entities/fast-retailing-co-ltd" target="_blank" data-smartkarma-citation="entities:751:1" rel="noopener">Fast Retailing (9983 JP)</a>, the more there is to sell. That creates interesting opportunities.</li>
<li>Short <a href="https://www.smartkarma.com/entities/yuexiu-property-co-ltd" target="_blank" data-smartkarma-citation="entities:18097:1" rel="noopener">Yuexiu Property (123 HK)</a> now, or soon. The dynamics of this is that there WILL be selling when the rights come out. </li>
</ul>


It is relatively low-hanging fruit to "further propel the renmimbi's internationalisation" and for HKEX, it will "cement HK's position as the premier offshore renmimbi financing center."
The Conundrum: the more active investors decide they like Fast Retailing (9983 JP), the more there is to sell. That creates interesting opportunities.
Short Yuexiu Property (123 HK) now, or soon. The dynamics of this is that there WILL be selling when the rights come out. 


Last Week in Event SPACE: China Mobile, Fast Retailing, Yuexiu Property, Vinda, Tokyo Gas

Index Rebal/Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal/Special Situations

Index Rebalance

<ul>
<li>In this insight, we take a look at the potential index changes for Singapore's ST index ("STI") between now and the September 2023 index review.</li>
<li>With roughly 4 more months left for the base date, <a href="https://www.smartkarma.com/entities/sembcorp-marine-ltd" target="_blank" data-smartkarma-citation="entities:11:1" rel="noopener">Sembcorp Marine (SMM SP)</a> seems to be an ADD but it is close to the border.</li>
<li>Since the ranking system used for this index in based on prices as at a single point in time, the rankings could change significantly and our expectations could change too.</li>
</ul>


In this insight, we take a look at the potential index changes for Singapore's ST index ("STI") between now and the September 2023 index review.
With roughly 4 more months left for the base date, Sembcorp Marine (SMM SP) seems to be an ADD but it is close to the border.
Since the ranking system used for this index in based on prices as at a single point in time, the rankings could change significantly and our expectations could change too.


Quiddity Leaderboard Singapore’s STI Sep 23: KDCREIT Facing Risk of Deletion

<ul>
<li>One may presume that <a href="https://www.smartkarma.com/entities/prosus-nv" target="_blank" data-smartkarma-citation="entities:28104:1" rel="noopener">Prosus (PRX NA)</a> moved their <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a> shares received from their non-CCASS holdings of <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a>. It does not tell us much else. </li>
<li>Allocation in the <a href="https://www.smartkarma.com/entities/s-m-entertainment-co" target="_blank" data-smartkarma-citation="entities:3500:1" rel="noopener">S.M.Entertainment Co (041510 KS)</a> partial Offer was 44.14%. With shares trading ~₩95k, that was a pretty good outcome. </li>
<li>
<a href="https://www.smartkarma.com/entities/toyo-construction-co-ltd" target="_blank" data-smartkarma-citation="entities:1176:1" rel="noopener">Toyo Construction (1890 JP)</a> has asked the Japanese government to investigate YFO's alleged breaches of FEFTA. Expect YFO to say they did no wrong. Expect Toyo to complain about it. </li>
</ul>


One may presume that Prosus (PRX NA) moved their Meituan (3690 HK) shares received from their non-CCASS holdings of Tencent (700 HK). It does not tell us much else. 
Allocation in the S.M.Entertainment Co (041510 KS) partial Offer was 44.14%. With shares trading ~₩95k, that was a pretty good outcome. 

Toyo Construction (1890 JP) has asked the Japanese government to investigate YFO's alleged breaches of FEFTA. Expect YFO to say they did no wrong. Expect Toyo to complain about it. 


Last Week in Event SPACE: Meituan, S.M.Entertainment, Toyo, Mincor, JD.com, AAG

Singapore

Seatrium is a Singapore-headquartered engineering firm providing innovative solutions to the global offshore, marine, and energy industries. It specializes in oil & gas newbuilds and conversions, offshore renewables, specialized shipbuilding, and repairs & upgrades. The company was formed in 2023 through the merger of Sembcorp Marine and Keppel Offshore & Marine.

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Seatrium (STM SP)

Austal (ASB AU): Spurned Suitor, Hanwha Ocean, Gets a Vote of Confidence

The Board’s rejection is based on shaky grounds and may be an attempt to negotiate better terms, such as a bump, ticking fees, or significant break...

Arun George

Austal (ASB AU): Attracting Takeover Interest

AFR reports that JF Lehman & Company, a middle-market private equity firm focused on aerospace, defence and maritime sectors, is preparing to lodge...

Arun George

Last Week in Event SPACE: China Mobile, Fast Retailing, Yuexiu Property, Vinda, Tokyo Gas

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Quiddity Leaderboard Singapore’s STI Sep 23: KDCREIT Facing Risk of Deletion

As things stand, there could be one day of volume to buy in Sembcorp Marine and two days of volume to sell in KDCREIT but if share prices fluctuate...

Janaghan Jeyakumar, CFA

Last Week in Event SPACE: Meituan, S.M.Entertainment, Toyo, Mincor, JD.com, AAG

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

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