Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Chinese Internet data center services provider <a href="https://www.smartkarma.com/entities/21-vianet-group-inc-adr" target="_blank" data-smartkarma-citation="entities:8489:1" rel="noopener">21Vianet Group (VNET US)</a> has recently received a non-binding proposal letter from the Hina Group and Shanghai's Industrial Bank Co. </li>
<li>The indicative Offer price is US$8.00/ADS, or ~US$1.3333 per ordinary share.</li>
<li>The Offer Price is utterly underwhelming. A successful outcome will more than likely find its way to the Cayman Court.</li>
</ul>


Chinese Internet data center services provider 21Vianet Group (VNET US) has recently received a non-binding proposal letter from the Hina Group and Shanghai's Industrial Bank Co. 
The indicative Offer price is US$8.00/ADS, or ~US$1.3333 per ordinary share.
The Offer Price is utterly underwhelming. A successful outcome will more than likely find its way to the Cayman Court.


<ul>
<li>Bain Capital-backed <a href="https://www.smartkarma.com/entities/chindata-group-holdings-adr" target="_blank" data-smartkarma-citation="entities:29274:1" rel="noopener">Chindata Group (CD US)</a> is on the move after Bloomberg flagged - again - interest from industry players.</li>
<li>This time, SOE-backed China Merchants Group is understood to be mulling a takeover of Chindata. Shares are up 23% since that article earlier this month.</li>
<li>Back in April, Bloomberg mentioned <a href="https://www.smartkarma.com/entities/gds-holdings-adr" target="_blank" data-smartkarma-citation="entities:23649:1" rel="noopener">GDS Holdings (ADR) (GDS US)</a>, PE outfit PAG, and <a href="https://www.smartkarma.com/entities/eqt-ab" target="_blank" data-smartkarma-citation="entities:28922:1" rel="noopener">EQT AB (EQT SS)</a>-backed EdgeConneX were rumoured to be interested in merging with Chindata. </li>
</ul>


Bain Capital-backed Chindata Group (CD US) is on the move after Bloomberg flagged - again - interest from industry players.
This time, SOE-backed China Merchants Group is understood to be mulling a takeover of Chindata. Shares are up 23% since that article earlier this month.
Back in April, Bloomberg mentioned GDS Holdings (ADR) (GDS US), PE outfit PAG, and EQT AB (EQT SS)-backed EdgeConneX were rumoured to be interested in merging with Chindata. 


Chindata: China Merchants Potentially In The Mix

Glory Star New Media Group Holdings / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/glory-star-new-media-group-h" target="_blank" data-smartkarma-citation="entities:33080:1" rel="noopener">Glory Star New Media Group H (GSMG US)</a> (GSMG), a leading digital media platform and content-driven e-commerce company in China, has <a href="https://www.sec.gov/Archives/edgar/data/0001738758/000121390022038380/ea162668ex99-1_glorystar.htm" target="_blank" rel="noopener">entered</a> a definitive privatisation transaction with Cheers Inc.</li>
<li>Cheers is offering US$1.55/share, in cash, a 76% premium to GSMG's undisturbed price, and a 22% premium to the US$1.27/share proposal from GSMG's CEO Bing Zhang. </li>
<li>The buyer consortium owns ~72.8% of shares out and this Offer requires a two-thirds vote from shareholders. This looks done with expected completion this year. But it's a low-balled Offer.</li>
</ul>



Glory Star New Media Group H (GSMG US) (GSMG), a leading digital media platform and content-driven e-commerce company in China, has entered a definitive privatisation transaction with Cheers Inc.
Cheers is offering US$1.55/share, in cash, a 76% premium to GSMG's undisturbed price, and a 22% premium to the US$1.27/share proposal from GSMG's CEO Bing Zhang. 
The buyer consortium owns ~72.8% of shares out and this Offer requires a two-thirds vote from shareholders. This looks done with expected completion this year. But it's a low-balled Offer.


Offensively Cheap Homecoming For Glory Star New Media

<ul>
<li>The SEC has finalised the Holding Foreign Companies Accountable Act rules. Under the current timeframe, the SEC may force the delisting of foreign companies in three years if in contravention.</li>
<li>Amid <a href="https://www.smartkarma.com/entities/didi-chuxing-inc" target="_blank" data-smartkarma-citation="entities:27467:1" rel="noopener">DiDi Global (DIDI US)</a>'s intention to delist from the US, the CSRC refutes it is pushing for VIEs to drop their listings in the United States.</li>
<li>Expect continued volatility as the ~248 US-listed China plays seek to avoid delisting if they don’t comply with auditing rules.</li>
</ul>


The SEC has finalised the Holding Foreign Companies Accountable Act rules. Under the current timeframe, the SEC may force the delisting of foreign companies in three years if in contravention.
Amid DiDi Global (DIDI US)'s intention to delist from the US, the CSRC refutes it is pushing for VIEs to drop their listings in the United States.
Expect continued volatility as the ~248 US-listed China plays seek to avoid delisting if they don’t comply with auditing rules.


Delisting Chinese ADRs: High Foreign-Holding, With No Fixed Abode, Most At Risk

Thematic (Sector/Industry)

<ul>
<li>In officially decided cases concerning dissentient shareholders in privatised US-listed China plays, the uplift to the merger price versus time value of money and legal costs, is less than ideal. </li>
<li>The outcome for each case will turn on the underlying facts. But it would appear <a href="https://www.smartkarma.com/entities/ikang-healthcare-group-adr" target="_blank" data-smartkarma-citation="entities:741:1" rel="noopener">iKang Healthcare Group (ADR) (KANG US)</a> is following a similar trend.  </li>
<li>Reportedly the uplift to the iKang merger price is just 10%. Dissenters can still lodge an appeal.</li>
</ul>


In officially decided cases concerning dissentient shareholders in privatised US-listed China plays, the uplift to the merger price versus time value of money and legal costs, is less than ideal. 
The outcome for each case will turn on the underlying facts. But it would appear iKang Healthcare Group (ADR) (KANG US) is following a similar trend.  
Reportedly the uplift to the iKang merger price is just 10%. Dissenters can still lodge an appeal.


IKang Healthcare (KANG US): Another Setback For Dissenters

China

51job, Inc. provides integrated human resource services in China, with a strong focus on recruitment related services.  The Company's recruitment related services are delivered in both print and online formats.

51 Job Inc Adr (JOBS US)

Hina/IBC's Non-Binding Proposal For VNET

Shandong Hi-Speed Holdings (412 HK) is investing US$299mn (@US$0.497/share) in VNET to take a 42.12% stake on a fully diluted basis, and 35.7% of...

David Blennerhassett

Chindata: China Merchants Potentially In The Mix

No formal sale process has occurred, therefore second-guessing if, and when, an Offer emerges will be fraught with issues. However, I'd be picking...

David Blennerhassett

Offensively Cheap Homecoming For Glory Star New Media

Trading at a 17.4%/40.9% gross/annualised spread, assuming late December completion. That's attractive. Get involved if you've read this far.

David Blennerhassett

Delisting Chinese ADRs: High Foreign-Holding, With No Fixed Abode, Most At Risk

This does not strike me as the time to be bargain hunting. Not when there remains confusion as to how and when delistings will unfold. The focus...

David Blennerhassett

IKang Healthcare (KANG US): Another Setback For Dissenters

In officially decided cases concerning dissentient shareholders in privatised US-listed China plays, the uplift to the takeover price versus time...

David Blennerhassett