Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<p><a href="https://www.smartkarma.com/entities/smartgroup-corp-ltd" target="_blank" data-smartkarma-citation="entities:19954:1" rel="noopener">Smartgroup Corp (SIQ AU)</a>, a provider of employee management services, has <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02427457-2A1326453?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a> an Indicative Offer by way of a Scheme from TPG Global and Australia-based Potential Capital, with superannuation fund Aware Super joining as a co-investor.</p>
<p>The consortium is Offering A$10.35/share, a 31.7% premium to the undisturbed price. </p>
<p>SIQ's board has backed the proposal and granted the consortium four weeks of exclusive due diligence.</p>
<p>This appears a full Offer. But as it remains non-binding, expect shares to trade wide to terms in the absence of a competing proposal.</p>
<p>More below the fold. </p>

Smartgroup Corp (SIQ AU), a provider of employee management services, has announced an Indicative Offer by way of a Scheme from TPG Global and Australia-based Potential Capital, with superannuation fund Aware Super joining as a co-investor.
The consortium is Offering A$10.35/share, a 31.7% premium to the undisturbed price. 
SIQ's board has backed the proposal and granted the consortium four weeks of exclusive due diligence.
This appears a full Offer. But as it remains non-binding, expect shares to trade wide to terms in the absence of a competing proposal.
More below the fold. 

Smartgroup (SIQ AU): Indicative Offer From TPG/Potential Capital/Aware Super

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<p>Back on the 27 July, wood flooring manufacturer <a href="https://www.smartkarma.com/entities/nature-home-holding-company" target="_blank" data-smartkarma-citation="entities:20543:1" rel="noopener">Nature Home Holding Company (2083 HK)</a> <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0727/2021072701813.pdf" target="_blank" rel="noopener">announced</a> an Offer from its founding shareholders, by way of a Scheme, at HK$1.70/share. The Offer Price will not be increased. <a href="https://www.smartkarma.com/entities/dehua-tb-new-decoration-a" target="_blank" data-smartkarma-citation="entities:4444:1" rel="noopener">Dehua Tb New Decoration A (002043 CH)</a> has given an irrevocable rollover undertaking for its 19.6% stake. </p>
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<p>The Scheme Document was <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0913/2021091301428.pdf" target="_blank" rel="noopener">despatched</a> on the 14 September with the Court Meeting scheduled for the 6 October. Provided all resolutions pass, cheques are expected to be despatched on or before the 26 October.</p>
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<p>The Offer looked done and the gross/annualised spread tightened into 2%/26.5% on the 19 September.</p>
<p>Then the wheels fell off, with the gross spread widening out to 38% as I type, and trading well below the undisturbed price.</p>
<p>Nature Homes had previously flagged concerns with outstanding trade receivables with <a href="https://www.smartkarma.com/entities/china-evergrande-group" target="_blank" data-smartkarma-citation="entities:479:1" rel="noopener">Evergrande Real Estate Group (3333 HK)</a>, and potentially the ubiquitous negative news surrounding China's second-largest developer is having a knock-on-affect. Plus there are a number of other factors at work that <em>could</em> be bucketed under buyer's remorse.</p>
<p>But the Offeror &amp; concert parties cannot simply walk away from this deal. Not without breaching the Takeover's Code. And which shareholder will <em>not</em> vote this through given where it is trading? </p>
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<p>More below the fold.</p>
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Back on the 27 July, wood flooring manufacturer Nature Home Holding Company (2083 HK) announced an Offer from its founding shareholders, by way of a Scheme, at HK$1.70/share. The Offer Price will not be increased. Dehua Tb New Decoration A (002043 CH) has given an irrevocable rollover undertaking for its 19.6% stake. 


The Scheme Document was despatched on the 14 September with the Court Meeting scheduled for the 6 October. Provided all resolutions pass, cheques are expected to be despatched on or before the 26 October.


The Offer looked done and the gross/annualised spread tightened into 2%/26.5% on the 19 September.
Then the wheels fell off, with the gross spread widening out to 38% as I type, and trading well below the undisturbed price.
Nature Homes had previously flagged concerns with outstanding trade receivables with Evergrande Real Estate Group (3333 HK), and potentially the ubiquitous negative news surrounding China's second-largest developer is having a knock-on-affect. Plus there are a number of other factors at work that could be bucketed under buyer's remorse.
But the Offeror &amp; concert parties cannot simply walk away from this deal. Not without breaching the Takeover's Code. And which shareholder will not vote this through given where it is trading? 


More below the fold.


Nature Home (2083 HK): Risk Aversity Sees Spread Blow Out

Australian Pharmaceutical Industries / Event-Driven

Australian Pharmaceutical Industries (API AU)

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<p>On the 12 July, wholesale and retail pharmacy health/beauty and lifestyle products operator <a href="https://www.smartkarma.com/entities/19399" target="_blank" data-smartkarma-citation="entities:19399:1" rel="noopener">Australian Pharmaceutical Industries (API AU)</a> (API) <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02394187-3A570533?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a> an indicative, non-binding Offer from <a href="https://www.smartkarma.com/entities/wesfarmers-ltd" target="_blank" data-smartkarma-citation="entities:1104:1" rel="noopener">Wesfarmers Ltd (WES AU)</a> by way of a Scheme at $1.38/share,  a 20.5% premium to last close.  Separately, Wesfarmers has entered into an agreement with API's largest shareholder <a href="https://www.smartkarma.com/entities/washington-h-soul-pattinson-and-co-ltd" target="_blank" data-smartkarma-citation="entities:6054:1" rel="noopener">Washington H. Soul Pattinson and Co. Ltd (SOL AU)</a> (WHSP), such that WHSP will vote its 19.3% interest in favour of Wesfarmers' proposal, in the absence of a superior Offer.</p>
<p>There was a whiff of opportunism present, and the API board agreed and concluded in an announcement on the <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02400478-3A571605?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">29 July</a> that the proposal undervalued API, was not compelling, and was not in the best interest of shareholders. </p>
<h3>The New News</h3>
<p>After bumping the Offer by 12.3% to A$1.55/share, Wesfarmers and API entered into a <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02422163-3A575967?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">process deed</a> yesterday. A fully franked dividend of A$0.05/share is permitted, which if paid will reduce the cash consideration.</p>
<p>WHSP remains supportive and will vote its 19.3% in favour of the revised proposal.</p>
<p>API has granted Wesfarmers exclusive due diligence until the 16 October. The deal is also subject to ACCC clearance.</p>
<p>This remains a non-binding Offer, and we have seen two Aussie deals break in the past fortnight, reinforcing the country's moniker as the non-binding graveyard.</p>
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<p>More below the fold.</p>
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On the 12 July, wholesale and retail pharmacy health/beauty and lifestyle products operator Australian Pharmaceutical Industries (API AU) (API) announced an indicative, non-binding Offer from Wesfarmers Ltd (WES AU) by way of a Scheme at $1.38/share,  a 20.5% premium to last close.  Separately, Wesfarmers has entered into an agreement with API's largest shareholder Washington H. Soul Pattinson and Co. Ltd (SOL AU) (WHSP), such that WHSP will vote its 19.3% interest in favour of Wesfarmers' proposal, in the absence of a superior Offer.
There was a whiff of opportunism present, and the API board agreed and concluded in an announcement on the 29 July that the proposal undervalued API, was not compelling, and was not in the best interest of shareholders. 
The New News
After bumping the Offer by 12.3% to A$1.55/share, Wesfarmers and API entered into a process deed yesterday. A fully franked dividend of A$0.05/share is permitted, which if paid will reduce the cash consideration.
WHSP remains supportive and will vote its 19.3% in favour of the revised proposal.
API has granted Wesfarmers exclusive due diligence until the 16 October. The deal is also subject to ACCC clearance.
This remains a non-binding Offer, and we have seen two Aussie deals break in the past fortnight, reinforcing the country's moniker as the non-binding graveyard.


More below the fold.


Aussie Pharma (API AU): Wesfarmer's Sweetened (Yet Indicative) Offer

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<p>The takeovers of Aussie tech companies continue. </p>
<p>On the 7 June, <a href="https://www.smartkarma.com/entities/altium-ltd" target="_blank" data-smartkarma-citation="entities:18626:1" rel="noopener">Altium Ltd (ALU AU)</a>, a global software company, <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02382370-2A1302312?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">confirmed and subsequently rejected</a> a non-binding proposal from <a href="https://www.smartkarma.com/entities/autodesk-inc" target="_blank" data-smartkarma-citation="entities:13211:1" rel="noopener">Autodesk Inc (ADSK US)</a> - discussed in <em><a href="https://skr.ma/we6mt" target="_blank" rel="noopener">Altium Ltd (ALU) Rebuffs Autodesk Offer</a>.</em> This was followed on the same day by  <a href="https://www.smartkarma.com/entities/hansen-technologies-ltd" target="_blank" data-smartkarma-citation="entities:12633:1" rel="noopener">Hansen Technologies (HSN AU)</a>, a provider of software and services globally, <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02382235-3A568452?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announcing</a> Australian PE outfit BGH Capital had made a non-binding conditional proposal - see <em><a href="https://skr.ma/pAK5Y" target="_blank" rel="noopener">Hansen Technologies (HSN AU)'s Assured Deal With BGH</a></em>.</p>
<p>Now <a href="https://www.smartkarma.com/entities/rhipe-ltd" target="_blank" data-smartkarma-citation="entities:19128:1" rel="noopener">rhipe Ltd (RHP AU)</a>, a provider of cloud-based subscription software-as-a-service licenses,  has <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02390415-3A569823?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a> a non-binding indicative proposal from Norway's Crayon Group Holdings. </p>
<p>The proposal is conditional on rhipe having a net cash position of A$31mn at the close of the Offer.</p>
<p>A final binding Offer is conditional on due diligence, the unanimous recommendation from rhipe's board, and no MACs.</p>
<p>rhipe has provided Crayon with limited confirmatory due diligence on a  non-exclusive basis.</p>
<p>The Offer price appears opportunistic and is currently trading through terms. </p>
<p> More below the fold. </p>
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<p data-gtm-vis-recent-on-screen-7770372_137="1025" data-gtm-vis-first-on-screen-7770372_137="1025" data-gtm-vis-total-visible-time-7770372_137="4000" data-gtm-vis-has-fired-7770372_137="1"></p>
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The takeovers of Aussie tech companies continue. 
On the 7 June, Altium Ltd (ALU AU), a global software company, confirmed and subsequently rejected a non-binding proposal from Autodesk Inc (ADSK US) - discussed in Altium Ltd (ALU) Rebuffs Autodesk Offer. This was followed on the same day by  Hansen Technologies (HSN AU), a provider of software and services globally, announcing Australian PE outfit BGH Capital had made a non-binding conditional proposal - see Hansen Technologies (HSN AU)'s Assured Deal With BGH.
Now rhipe Ltd (RHP AU), a provider of cloud-based subscription software-as-a-service licenses,  has announced a non-binding indicative proposal from Norway's Crayon Group Holdings. 
The proposal is conditional on rhipe having a net cash position of A$31mn at the close of the Offer.
A final binding Offer is conditional on due diligence, the unanimous recommendation from rhipe's board, and no MACs.
rhipe has provided Crayon with limited confirmatory due diligence on a  non-exclusive basis.
The Offer price appears opportunistic and is currently trading through terms. 
 More below the fold. 





Rhipe (RHP AU): Crayon Sees Silver in Them Thar Clouds

<p>Yesterday <a href="https://www.smartkarma.com/entities/hansen-technologies-ltd" target="_blank" data-smartkarma-citation="entities:12633:1" rel="noopener">Hansen Technologies (HSN AU)</a>, a provider of software and services globally, <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02382235-3A568452?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a> Australian PE outfit BGH Capital had made a non-binding conditional proposal valuing the company at $1.3bn.</p>
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<p>The A$6.50/share cash offer by way of a Scheme, is a 25% premium to last close and a 33% premium to the one-month VWAP.</p>
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<p data-gtm-vis-recent-on-screen-7770372_137="1025" data-gtm-vis-first-on-screen-7770372_137="1025" data-gtm-vis-total-visible-time-7770372_137="4000" data-gtm-vis-has-fired-7770372_137="1">Andrew Hansen, the company's MD and CEO, has agreed to vote his 17.5% stake in favour of a firm deal. Due diligence, which is expected to take around six weeks, has been granted on an exclusive basis.</p>
<p data-gtm-vis-recent-on-screen-7770372_137="1025" data-gtm-vis-first-on-screen-7770372_137="1025" data-gtm-vis-total-visible-time-7770372_137="4000" data-gtm-vis-has-fired-7770372_137="1">Other directors, including David Osborn and Bruce Adam, also intend to unanimously recommend the proposal to shareholders - subject to Hansen and BGH entering into a binding Scheme Implementation Deed.</p>
<p data-gtm-vis-recent-on-screen-7770372_137="1025" data-gtm-vis-first-on-screen-7770372_137="1025" data-gtm-vis-total-visible-time-7770372_137="4000" data-gtm-vis-has-fired-7770372_137="1">This looks done.</p>
<p data-gtm-vis-recent-on-screen-7770372_137="1025" data-gtm-vis-first-on-screen-7770372_137="1025" data-gtm-vis-total-visible-time-7770372_137="4000" data-gtm-vis-has-fired-7770372_137="1">More below the fold.</p>

Yesterday Hansen Technologies (HSN AU), a provider of software and services globally, announced Australian PE outfit BGH Capital had made a non-binding conditional proposal valuing the company at $1.3bn.

The A$6.50/share cash offer by way of a Scheme, is a 25% premium to last close and a 33% premium to the one-month VWAP.

Andrew Hansen, the company's MD and CEO, has agreed to vote his 17.5% stake in favour of a firm deal. Due diligence, which is expected to take around six weeks, has been granted on an exclusive basis.
Other directors, including David Osborn and Bruce Adam, also intend to unanimously recommend the proposal to shareholders - subject to Hansen and BGH entering into a binding Scheme Implementation Deed.
This looks done.
More below the fold.

Hansen Technologies (HSN AU)'s Assured Deal With BGH

Australia

Hansen Technologies Limited develops, supports and integrates billing systems software for the telecommunications and utilities sectors in Australia.  The Company also provides IT outsourcing services such as facilities management and develops software and services for workforce management.

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Hansen Technologies (HSN AU)

Smartgroup (SIQ AU): Indicative Offer From TPG/Potential Capital/Aware Super

Trading at 10.8%/28.4% gross/annualised spread, assuming five months to complete. That appears attractive. A competing bidder cannot be ruled out,...

David Blennerhassett

Nature Home (2083 HK): Risk Aversity Sees Spread Blow Out

Given HK events have been a bloodbath this year, I thought this may trade wide. But not this wide. If you have the risk appetite, then get involved...

David Blennerhassett

Aussie Pharma (API AU): Wesfarmer's Sweetened (Yet Indicative) Offer

Trading at a 5.8%/15.8% gross/annualised spread, assuming mid-Feb completion. But it's not a super liquid arb situation. Plus this remains a non...

David Blennerhassett

Rhipe (RHP AU): Crayon Sees Silver in Them Thar Clouds

The granting of DD indicates Rhipe is open to a firm offer, yet the non-exclusive nature of that DD suggests other suitors are welcome. I'd be...

David Blennerhassett

Hansen Technologies (HSN AU)'s Assured Deal With BGH

Assuming six weeks for DD to compete and a SID to be entered into, this could be wrapped up late Nov. That suggests this is trading at a gross...

David Blennerhassett

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