Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Shanghai Dongzheng Automotive Finance / Event-Driven

Shanghai Dongzheng Automotive Finance (DAF HK)

<ul>
<li>It's now official - <a href="https://www.smartkarma.com/entities/saic-motor-corp-ltd-a" target="_blank" data-smartkarma-citation="entities:20833:1" rel="noopener">SAIC Motor (600104 CH)</a> has <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2022/0527/2022052700075.pdf" target="_blank" rel="noopener">made</a> a possible unconditional mandatory cash Offer for <a href="https://www.smartkarma.com/entities/shanghai-dongzheng-automotive-finance-co-ltd" target="_blank" data-smartkarma-citation="entities:27984:1" rel="noopener">Dongzheng Automotive Finance (2718 HK)</a>.</li>
<li>To recap: on the 19 May, SAIC acquired <a href="https://www.smartkarma.com/entities/china-zhengtong-auto-services" target="_blank" data-smartkarma-citation="entities:17001:1" rel="noopener">China Zhengtong Auto Services Hldg (1728 HK)</a>'s 71.04% stake in Dongzheng at a judicial auction. This triggers the mandatory Offer.</li>
<li>The new news from today's <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2022/0527/2022052700075.pdf" target="_blank" rel="noopener">announcement</a> is that the Offer price was reduced to HK$1.243/share - presumably on account of moves in HKD vs. RMB. The Offer price is final.</li>
</ul>


It's now official - SAIC Motor (600104 CH) has made a possible unconditional mandatory cash Offer for Dongzheng Automotive Finance (2718 HK).
To recap: on the 19 May, SAIC acquired China Zhengtong Auto Services Hldg (1728 HK)'s 71.04% stake in Dongzheng at a judicial auction. This triggers the mandatory Offer.
The new news from today's announcement is that the Offer price was reduced to HK$1.243/share - presumably on account of moves in HKD vs. RMB. The Offer price is final.


SAIC’s Unconditional Offer For Dongzheng

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.

<ul>
<li>On 19 May, <a href="https://www.smartkarma.com/entities/saic-motor-corp-ltd-a" target="_blank" data-smartkarma-citation="entities:20833:1" rel="noopener">SAIC Motor (600104 CH)</a> emerged as the successful bidder for <a href="https://www.smartkarma.com/entities/china-zhengtong-auto-services" target="_blank" data-smartkarma-citation="entities:17001:1" rel="noopener">China Zhengtong Auto Services Hldg (1728 HK)</a>’s 71.04% stake in <a href="https://www.smartkarma.com/entities/shanghai-dongzheng-automotive-finance-co-ltd" target="_blank" data-smartkarma-citation="entities:27984:1" rel="noopener">Dongzheng Automotive Finance (2718 HK)</a>.</li>
<li>As SAIC will hold 30%+ of the voting rights, it will result in an MGO at a price not less than the auction price of HK$1.294 per H Share.</li>
<li>Dongzheng shares remain in a trading halt. The equity interest will transfer to SAIC and the MGO launched when the Shanghai Financial Court issues an auction sale judgment. </li>
</ul>


On 19 May, SAIC Motor (600104 CH) emerged as the successful bidder for China Zhengtong Auto Services Hldg (1728 HK)’s 71.04% stake in Dongzheng Automotive Finance (2718 HK).
As SAIC will hold 30%+ of the voting rights, it will result in an MGO at a price not less than the auction price of HK$1.294 per H Share.
Dongzheng shares remain in a trading halt. The equity interest will transfer to SAIC and the MGO launched when the Shanghai Financial Court issues an auction sale judgment. 


SAIC Wins the Auction for the 71.04% Stake in Dongzheng, MGO Upcoming

<ul>
<li>On the 19 May, <a href="https://www.smartkarma.com/entities/saic-motor-corp-ltd-a" target="_blank" data-smartkarma-citation="entities:20833:1" rel="noopener">SAIC Motor (600104 CH)</a> acquired <a href="https://www.smartkarma.com/entities/china-zhengtong-auto-services" target="_blank" data-smartkarma-citation="entities:17001:1" rel="noopener">China Zhengtong Auto Services Hldg (1728 HK)</a>'s 71.04% stake in <a href="https://www.smartkarma.com/entities/shanghai-dongzheng-automotive-finance-co-ltd" target="_blank" data-smartkarma-citation="entities:27984:1" rel="noopener">Dongzheng Automotive Finance (2718 HK)</a> at a judicial auction. </li>
<li>Reportedly SAIC was the only bidder. The price paid appears to be at the minimum bid price of HK$1.294/share. </li>
<li>The acquisition will trigger an unconditional Offer for the H shares.  SAIC and ZhengTong have announced the outcome of the auction. But still no word from Dongzheng.</li>
</ul>


On the 19 May, SAIC Motor (600104 CH) acquired China Zhengtong Auto Services Hldg (1728 HK)'s 71.04% stake in Dongzheng Automotive Finance (2718 HK) at a judicial auction. 
Reportedly SAIC was the only bidder. The price paid appears to be at the minimum bid price of HK$1.294/share. 
The acquisition will trigger an unconditional Offer for the H shares.  SAIC and ZhengTong have announced the outcome of the auction. But still no word from Dongzheng.


Shh! SAIC's Unconditional Offer For Dongzheng (2718 HK)

<ul>
<li>After both stocks were suspended on the 19 April, the forced liquidation of <a href="https://www.smartkarma.com/entities/china-zhengtong-auto-services" target="_blank" data-smartkarma-citation="entities:17001:1" rel="noopener">China Zhengtong (1728 HK)</a>'s stake in <a href="https://www.smartkarma.com/entities/shanghai-dongzheng-automotive-finance-co-ltd" target="_blank" data-smartkarma-citation="entities:27984:1" rel="noopener">Dongzheng (2718 HK)</a> will occur, via auction, on the 18 May. </li>
<li>That minimum bid price is HK$1.294/share, or a 112% premium to last close.</li>
<li>ZhengTong's stake is 71.04% of shares out. A mandatory general offer - conditional or unconditional - may materialise from the auction process. </li>
</ul>


After both stocks were suspended on the 19 April, the forced liquidation of China Zhengtong (1728 HK)'s stake in Dongzheng (2718 HK) will occur, via auction, on the 18 May. 
That minimum bid price is HK$1.294/share, or a 112% premium to last close.
ZhengTong's stake is 71.04% of shares out. A mandatory general offer - conditional or unconditional - may materialise from the auction process. 


Dongzheng (2718 HK): 18th May Liquidation Of ZhengTong’s Stake

<ul>
<li>On 16 April, the Shanghai Financial Court <a href="https://paimai.jd.com/287421325" target="_blank" rel="noopener">published</a> the details for the auction of <a href="https://www.smartkarma.com/entities/china-zhengtong-auto-services" target="_blank" data-smartkarma-citation="entities:17001:1" rel="noopener">China Zhengtong Auto Services Hldg (1728 HK)</a>’s 71.04% stake in <a href="https://www.smartkarma.com/entities/shanghai-dongzheng-automotive-finance-co-ltd" target="_blank" data-smartkarma-citation="entities:27984:1" rel="noopener">Dongzheng Automotive Finance (2718 HK)</a>. </li>
<li>If the auction is successful and results in any person and a group of persons acting in concert holding 30%+ of the voting rights, it will result in an MGO.</li>
<li>The base bid implies an MGO price of HK$1.294 per H Share, a 112.1% premium to the last close. The auction will be held from 18 May to 19 May.</li>
</ul>


On 16 April, the Shanghai Financial Court published the details for the auction of China Zhengtong Auto Services Hldg (1728 HK)’s 71.04% stake in Dongzheng Automotive Finance (2718 HK). 
If the auction is successful and results in any person and a group of persons acting in concert holding 30%+ of the voting rights, it will result in an MGO.
The base bid implies an MGO price of HK$1.294 per H Share, a 112.1% premium to the last close. The auction will be held from 18 May to 19 May.


Auction of China ZhengTong’s Dongzheng Stake Set for 18 May; Potential MGO

China

Shanghai Dongzheng Automotive Finance provides automotive loan products and services, including retail loans and direct leasing for end customers, and dealer loans for vehicle purchases in the PRC. The company specializes in financing for luxury-brand cars. It was founded in 2015 and is headquartered in Shanghai, People's Republic of China.

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Shanghai Dongzheng Automotive Finance (DAF HK)

SAIC’s Unconditional Offer For Dongzheng

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SAIC Wins the Auction for the 71.04% Stake in Dongzheng, MGO Upcoming

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Shh! SAIC's Unconditional Offer For Dongzheng (2718 HK)

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Dongzheng (2718 HK): 18th May Liquidation Of ZhengTong’s Stake

Buy Dongzherng at the minimum bid price. Then buy some more. Avoid ZhengTong. The company is toxic from a regulator's point of view.

David Blennerhassett

Auction of China ZhengTong’s Dongzheng Stake Set for 18 May; Potential MGO

The auction of China Zhengtong’s 71.04% stake in Dongzheng will be held from 18 to 19 May. A successful auction will imply an MGO price (at the...

Arun George

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