Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

For the month of May, 12 new deals were discussed on Smartkarma with an overall announced deal size of ~US$8.4bn.
Clicking on the company name in the table below will take you to the entity page where you can read initial insight(s) written by Smartkarma contributors on these new deals.





New Deals


Industry


Size (US$bn)


Type


Premium



Australia


Kidman Resources (KDR AU)
Mining
0.54
Scheme
47.3%


Vocus Communications (VOC AU)
Telecom
2.30
Scheme
35.0%





Japan


Misawa Homes (1722 JP)
Homebuilding
0.19
Tender offer
30.8%


Nitto Fc Co Ltd (4033 JP)
Fertilizer
0.28
Tender offer
37.6%


Techno Associe (8249 JP)
Trading
0.03
Tender Offer



Tosho Printing (7913 JP)
Commercial printing
0.26
Tender offer
41.2%





Malaysia


Lafarge Malaysia (LMC MK)
Materials
0.37
MGO
13.6%





Singapore


800 super holdings (ESH SP)
Waste management
0.12
VGO
16.1%


Memtech International (MTEC SP)
Tech
0.05
VGO
23.9%





UK


Independent News and Media (INM LN)
Media
0.16
Scheme
44%






US   


Advanced Disposal (ADSW US)
Waste management
2.95
Def. agreement
22.1%


Circor International (CIR US)
Industrial
0.89
Proposal
47%




Both Vocus Communications (VOC AU) and Circor International (CIR US) are unofficial - the former is indicative and Circor's board has rebuffed Crane Co (CR US)'s proposal.
The above does not include insights written on the Fiat Chrysler Automobiles NV (FCA IM) / Renault SA (RNO FP) case (which have a combined market cap of US$38bn) as there is no agreed deal - just a proposal that the RNO board will look at - probably favorably in some context - in the coming days; nor the proposed US$3.5bn merger of Nippon Shokubai (4114 JP) / Sanyo Chemical Industries (4471 JP) which has, as yet, no agreed merger ratio.
The average premium to last close for the new deals announced in May was 33%, while the average for the five months of 2019 is ~31%.
Brief Summary of News in May of Arb Situations On Smartkarma's Radar
(again, click on the company names to take to you to the insights and/or discussion posts for a more comprehensive read-through on each situation)




Australia


Comments (with links)



Automotive Holdings (AHG AU)

Ap Eagers Ltd (APE AU) has improved the consideration to 1 APE for every 3.6 AHG shares, from 3.8 shares. AHG's board has unanimously recommend the improved Offer. The Offer is also now free from the market fall condition. Including the acceptance facility, APE holds 61.81% in AHG as at 30 May.



Aveo Group (AOG AU)
No May update


DuluxGroup Ltd (DLX AU)
DLX recommend Nippon's Offer on 6 May. The ex-date for its half-year dividend of A$0.43/share is the 21 June.


Eclipx (ECX AU)
No May update. 1H19 results today - operating income down 15%.


Graincorp Ltd A (GNC AU)
Not surprisingly, GNC has informed LTAP it is unable to proceed with the non-binding indicative proposal on 6 May.


Healthscope Ltd (HSO AU)
Done and dusted - courts approve scheme. Cash to be paid on the 6th June.


Lynas Corp Ltd (LYC AU)

Signs an MOU with US' Blue Lines for a rare earth separation facility on 20 May. The share price is up as rare earth stocks rally on concerns/rumours China might restrict rare earth exports to the US. Malaysian Prime Minister Mahathir Mohamad was in Tokyo for a business conference was quoted saying "“We think we’ll have to renew the licence” . Lynas welcomes the news 



Navitas Ltd (NVT AU)
Scheme book dispatched on the 13 May. The meeting is to be held on the 19th June.


Ruralco Holdings (RHL AU)
The ex-date for its half-year dividend of A$0.10/share was the 30 May.


Villa World Ltd (VLW AU)

VLW's directors unanimously recommended AVID's revised proposal of $2.345/share by way of a scheme on the 2 May.



Xenith Ip (XIP AU)
No May update








Hong Kong


Comments (with links)



China Power New Energy Development Co (735 HK)

The scheme doc for CPEND is now expected to be dispatched on or before the 21 June, out from 2 May previously.



Hong Kong International Construction Investment Management Group Co., (687 HK)
The MGO closed on the 2 May with Blackstone holding 86.28%. Shares are suspended and Blackstone will take the necessary steps to restore the float.


Harbin Electric Co Ltd H (1133 HK)

In an unprecedented move, the acceptance period for has been extended to 19 July from 20 May. At the time of the extension, acceptances were 85.84% as of today. Two months to get another 4.16%. This will get done.



Hanergy Thin Film Power (566 HK)

The Scheme and the special resolution for matters relating to the implementation of the Scheme were approved respectively at the Court Meeting and the SGM on the 18 May 2018. The Court Hearing is the 4 June with an Effective date on the 6 June.



New Sports Group (299 HK)
The unconditional offer closed on the 24 May with the Offeror and parties holding 75.46%. A temporary waiver from strict compliance with the public float was lodged with the SFC.








India


Comments



Glaxosmithkline Consumer Healthcare (SKB IN)
No May update


Gruh Finance (GRHF IN)

Gruh's board recommended a dividend of INR 2/share for FY19 at the April 30 meeting.
 Gruh will hold its NCLT-convened meetings of shareholders, creditors on 4 June to approve the scheme with Bandhan Bank.  The company raised the foreign portfolio investment limit to 40% from 25% on the 28 May.



Mindtree Ltd (MTCL IN)

On the 1 May, L&amp;T acquired a 20% stake from VG Siddhartha.
L&amp;T increases its stake to 26.48% on the 16 May.
Open offered delayed for around two weeks from the 14 May due to late Exchange queries.









Japan


Comments (with links)



Kabu.Com Securities (8703 JP)
No May update


Ki Holdings (6747 JP)

No May update



Kosaido Co Ltd (7868 JP)

Murakami's tender offer failed - big time - on the 22 May.



Nexon Co Ltd (3659 JP)
Two delays for final bidding.   Numerous media accounts/rumours - and numerous insights written by SK contributors. Click on the company name to the left to go to these insights.


U Shin Ltd (6985 JP)
No May update









Singapore


Comments



Ezion Holdings (EZI SP)

1Q19 results on 15 May - net losses down 68%.


Indofood Agri Resources (IFAR SP)
The Offer has been extended until the 25 June (or such later date) and the Offer price has adjusted to $0.2775 for the final dividend of $0.0025.


Kingboard Copper Foil Hldgs (KCF SP)
The Offer closed on the 16 May with 10.5% shares out tendering, giving the Offeror 98.45%. Shares suspended.


Oue Hospitality Trust (OUEHT SP)
The hearing of the trust scheme took place on the 29 May.


Ying Li International Real Estate Ltd (YINGLI SP)
On the 2 May, the IFA recommends shareholders reject the unconditional offer (page 55 of the PDF circular). Offer closed on the 16 May - acceptances were 13.12% giving the Offeror 72.04%.









South Korea


Comments



Hyundai Oilbank Co Ltd (1082Z KS)
No May update








Thailand


Comments



Glow Energy Pcl (GLOW TB)
26.14% of shares out tendered into GLOW's Offer giving Global Power Synergy Company Ltd (GPSC TB) a total stake of 96.25%. The stock popped mid-week on expectation a Delisting Offer will occur sooner rather than later.


Golden Land Prop Dvlp (GOLD TB)
Approval from the Office of Trade Competition Commission was received on the 23 May, therefore Frasers Property (Thailand) Pcl (FPT TB)'s tender offer is expected to commence on the 5 June and conclude on the 8 August.


Thanachart Capital (TCAP TB)

No May update








UK


Comments (with links)



Earthport plc (EPO LN)

Visa announced it acquired control on the 8 May.



Ophir Energy (OPHR LN)

Medco Energi Internasional T (MEDC IJ) received Tanzania approval on the 9 May. The scheme became effective on the 21 May. Settlement is the 4 June.







Europe


Comments (with links)



Oslo Bors VPS Holding ASA (OSLO NS)

On the 13 May, the Ministry of Finance considered Euronext N.V. and Nasdaq AB to be suitable owners in accordance with the Securities Trading Act and Securities Register Act.   On the 27 May, Nasdaq withdrew its offer.



Lenta Ltd (LNTA LI)

Severgroup reached valid acceptances of 50% on the 16 May.



Scout24 AG (G24 GR)

The Offer by H&amp;F did not go through on the 9 May.





Independent News and Media Plc / Event-Driven

The Board of <a href="https://www.smartkarma.com/entities/28064" target="_blank" data-smartkarma-citation="entities:28064:1">Independent News and Media Plc (INM LN)</a> have <a href="https://otp.tools.investis.com/clients/uk/inmp/rns/regulatory-story.aspx?cid=1291&amp;amp;newsid=1257596" target="_blank">unanimously recommended</a> a €0.105/share cash offer, by way of a Scheme, from Belgian newspaper publishing and broadcast media company Mediahuis NV. Rumours of an offer spread in early April leading to an <a href="https://otp.tools.investis.com/clients/uk/inmp/rns/regulatory-story.aspx?cid=1291&amp;amp;newsid=1245555" target="_blank">announcement</a> by INM on the 4 April that it had received an approach in relation to a possible offer.
The Offer price is a 44% premium to the undisturbed price of €0.0728 and 63% premium to the 30-day VWAP. The Offer values INM at ~€145.6m.
The posting of the Scheme doc was <a href="https://otp.tools.investis.com/clients/uk/inmp/rns/regulatory-story.aspx?cid=1291&amp;newsid=1257661" target="_blank">conditional</a> on receipt of irrevocable undertakings from <a href="https://en.wikipedia.org/wiki/Denis_O%27Brien" target="_blank">Denis O'Brien</a> (29.88%) and <a href="https://en.wikipedia.org/wiki/Dermot_Desmond" target="_blank">Dermot Desmond</a> (15%). Together with irrevocable undertakings given by INM's Directors, Mediahuis will have undertakings to vote in favour of the resolutions at the Scheme Meeting of 44.90% 
The same day, Mediahuis <a href="https://otp.tools.investis.com/clients/uk/inmp/rns/regulatory-story.aspx?cid=1291&amp;newsid=1257740" target="_blank">announced</a> it had acquired 26% of the issued shares from O'Brien and Desmond at €0.105/share. The terms of the irrevocable undertakings for the remaining 18.88% held by O'Brien and Desmond continue to apply. Together with shares held by Thomas Leysen, Mediahuis' Chairman, Mediahuis owns 27.01% of shares out, sufficient to block a competing offer.
The Scheme doc is expected to be posted within 28 days of the announcement and the transaction is expected to be declared effective in the third quarter of 2019. 
INM has recorded three consecutive years of negative growth, with <a href="https://otp.tools.investis.com/clients/uk/inmp/rns/regulatory-story.aspx?cid=1291&amp;newsid=1243751" target="_blank">2018 net income</a> down 28% yoy.
Of note, O’Brien will take home €43.5mn from the sale of his stake. However, it is estimated he paid ~€500mn accumulating his stake over a 13-year period. That's a non-negligible loss on investment - compounded by the 2008 crash - even for Ireland's richest man, all but suggesting minorities should similarly cut their losses.
It is not all smooth sailing though. INM had cash reserves of €81.7mn as at FY18, therefore Mediahuis is paying ~€64mn (net) to acquire INM or a trailing PER of 7x, well below its peer group average. 
And INM is profitable, albeit on a sliding scale; while in the Republic of Ireland, INM accounts for &gt;50% of the daily newspaper market and &gt;65% of the Sunday market.  
The backdrop to O'Brien's exit is also muddied with a recent High Court <a href="https://www.irishtimes.com/business/media-and-marketing/high-court-receives-first-report-from-inm-inspectors-1.3856998" target="_blank">document</a> citing business dealings were "certainly suggestive of an unlawful purpose directed to the benefit of Mr O'Brien directly or indirectly and the detriment of the company".
Still, if the success of the Scheme is in doubt, Mediahuis has the option to switch into a Tender Offer - on similar terms - and assuming a minimum acceptance threshold of 50%, requires just 5% of shares out to tender. 
Although one INM shareholder said the company was being sold for "<a href="https://www.theguardian.com/media/2019/apr/30/ireland-independent-news-media-sold-denis-o-brien" target="_blank">buttons</a>", the switch option and minimal tendering required suggests this deal looks likely to get up.

The Board of Independent News and Media Plc (INM LN) have unanimously recommended a €0.105/share cash offer, by way of a Scheme, from Belgian newspaper publishing and broadcast media company Mediahuis NV. Rumours of an offer spread in early April leading to an announcement by INM on the 4 April that it had received an approach in relation to a possible offer.
The Offer price is a 44% premium to the undisturbed price of €0.0728 and 63% premium to the 30-day VWAP. The Offer values INM at ~€145.6m.
The posting of the Scheme doc was conditional on receipt of irrevocable undertakings from Denis O'Brien (29.88%) and Dermot Desmond (15%). Together with irrevocable undertakings given by INM's Directors, Mediahuis will have undertakings to vote in favour of the resolutions at the Scheme Meeting of 44.90% 
The same day, Mediahuis announced it had acquired 26% of the issued shares from O'Brien and Desmond at €0.105/share. The terms of the irrevocable undertakings for the remaining 18.88% held by O'Brien and Desmond continue to apply. Together with shares held by Thomas Leysen, Mediahuis' Chairman, Mediahuis owns 27.01% of shares out, sufficient to block a competing offer.
The Scheme doc is expected to be posted within 28 days of the announcement and the transaction is expected to be declared effective in the third quarter of 2019. 
INM has recorded three consecutive years of negative growth, with 2018 net income down 28% yoy.
Of note, O’Brien will take home €43.5mn from the sale of his stake. However, it is estimated he paid ~€500mn accumulating his stake over a 13-year period. That's a non-negligible loss on investment - compounded by the 2008 crash - even for Ireland's richest man, all but suggesting minorities should similarly cut their losses.
It is not all smooth sailing though. INM had cash reserves of €81.7mn as at FY18, therefore Mediahuis is paying ~€64mn (net) to acquire INM or a trailing PER of 7x, well below its peer group average. 
And INM is profitable, albeit on a sliding scale; while in the Republic of Ireland, INM accounts for &gt;50% of the daily newspaper market and &gt;65% of the Sunday market.  
The backdrop to O'Brien's exit is also muddied with a recent High Court document citing business dealings were "certainly suggestive of an unlawful purpose directed to the benefit of Mr O'Brien directly or indirectly and the detriment of the company".
Still, if the success of the Scheme is in doubt, Mediahuis has the option to switch into a Tender Offer - on similar terms - and assuming a minimum acceptance threshold of 50%, requires just 5% of shares out to tender. 
Although one INM shareholder said the company was being sold for "buttons", the switch option and minimal tendering required suggests this deal looks likely to get up.

Independent News & Media And The Survival Of Ink

United Kingdom

Independent News & Media PLC (INM) is an international media group. The Company's operations are in Ireland, Northern Ireland, and South Africa, where it publishes national and regional newspapers and websites. INM operates in Australia and New Zealand through a minority holding in a media company there.

Independent News and Media Plc (INM LN)

(Mostly) Asia M&A: May 2019 Roundup

For the month of May, 12 new deals were discussed on Smartkarma with an overall announced deal size of ~US$8.4bn. Clicking on the company name in...

David Blennerhassett

Independent News & Media And The Survival Of Ink

The Board of Independent News and Media Plc (INM LN) have unanimously recommended a €0.105/share cash offer, by way of a Scheme, from Belgian...

David Blennerhassett