IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

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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>The consortium’s updated transaction has lowered the offer price -27.6% to $57.25 in cash per ADS, a 24.92% premium to the last trading price (11 January 2022).</li>
<li>The combination of the dramatically lower price, spurious justification for lowering the price and the shares recently trading higher than the revised price is unlikely to win over minorities.</li>
<li>Meeting the two-thirds shareholder approval threshold is likely a challenge due to the need to convince around 27% of disinterested shareholders to vote in favour of the transaction. </li>
</ul>


The consortium’s updated transaction has lowered the offer price -27.6% to $57.25 in cash per ADS, a 24.92% premium to the last trading price (11 January 2022).
The combination of the dramatically lower price, spurious justification for lowering the price and the shares recently trading higher than the revised price is unlikely to win over minorities.
Meeting the two-thirds shareholder approval threshold is likely a challenge due to the need to convince around 27% of disinterested shareholders to vote in favour of the transaction. 


Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>Not an overreaction after all. After shares closed down 19.2% on the 8 November, 20% adrift of indicative terms, that appeared overdone.</li>
<li>Now <a href="https://www.smartkarma.com/entities/51-job-inc-adr" target="_blank" data-smartkarma-citation="entities:532:1" rel="noopener">51 Job Inc (JOBS US)</a> has announced the Offeror has proposed reducing the merger consideration from US$79.05 in cash per common share to US$57.25.</li>
<li>Shares closed up, but still at a 14.5% gross spread to terms. The new construct, and the reasons for doing so, are decidedly baffling.</li>
</ul>


Not an overreaction after all. After shares closed down 19.2% on the 8 November, 20% adrift of indicative terms, that appeared overdone.
Now 51 Job Inc (JOBS US) has announced the Offeror has proposed reducing the merger consideration from US$79.05 in cash per common share to US$57.25.
Shares closed up, but still at a 14.5% gross spread to terms. The new construct, and the reasons for doing so, are decidedly baffling.


Mapletree Pan Asia Commercial Trust / Event-Driven

Mapletree Pan Asia Commercial Trust (MPACT SP)

<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-mobile-ltd" target="_blank" data-smartkarma-citation="entities:27:1" rel="noopener">China Mobile (941 HK)</a> announced it would start executing on its buyback mandate (10% of H-shares out (2.047bn shares). This is potentially enormous. And absolutely praise-worthy.</li>
<li>The <a href="https://www.smartkarma.com/entities/mapletree-commercial-trust" target="_blank" data-smartkarma-citation="entities:106:1" rel="noopener">Mapletree Commercial Trust (MCT SP)</a> and <a href="https://www.smartkarma.com/entities/mapletree-north-asia-commercial-trust" target="_blank" data-smartkarma-citation="entities:5127:1" rel="noopener">Mapletree North Asia Commercial Trust (MAGIC SP)</a> prospective merger means a lot of flow. Lots and lots of flow. </li>
<li>The market was assigning ₩18bn (₩232,000/share) less for <a href="https://www.smartkarma.com/entities/lg-chem-ltd" target="_blank" data-smartkarma-citation="entities:3583:1" rel="noopener">LG Chem (051910 KS)</a> stub ops since December 2020, when the battery business division (<a href="https://www.smartkarma.com/entities/lg-energy-solution" target="_blank" data-smartkarma-citation="entities:33464:1" rel="noopener">LG Energy Solution (LGENERGY KS)</a>) was carved out.</li>
</ul>



China Mobile (941 HK) announced it would start executing on its buyback mandate (10% of H-shares out (2.047bn shares). This is potentially enormous. And absolutely praise-worthy.
The Mapletree Commercial Trust (MCT SP) and Mapletree North Asia Commercial Trust (MAGIC SP) prospective merger means a lot of flow. Lots and lots of flow. 
The market was assigning ₩18bn (₩232,000/share) less for LG Chem (051910 KS) stub ops since December 2020, when the battery business division (LG Energy Solution (LGENERGY KS)) was carved out.


Last Week in Event SPACE: Mapletree Merger, China Mobile, LG Chem, China Logistics

<ul>
<li>For the month of December, 12 new deals (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$4bn.</li>
<li>The average premium for the new deals announced (or first discussed) in December was ~41%, with a year-to-date average of ~33% (165 deals &amp; total deal size of US$282bn).</li>
<li>This compares to the average premium for all deals in 2020 (158 deals) and 2019 (145 deals) of 31% and 31.5% respectively.</li>
</ul>


For the month of December, 12 new deals (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$4bn.
The average premium for the new deals announced (or first discussed) in December was ~41%, with a year-to-date average of ~33% (165 deals &amp; total deal size of US$282bn).
This compares to the average premium for all deals in 2020 (158 deals) and 2019 (145 deals) of 31% and 31.5% respectively.


<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

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.

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51 Job Inc Adr (JOBS US)

51job’s Lowered Privatisation Bid

The consortium has lowered the offer price -27.6% to $57.25 in cash per ADS. Meeting the 2/3rd approval threshold is likely a challenge as it...

Arun George

51job (JOB US): 27.6% Reduction In Terms

Trading at a gross/ spread of 14.5%. It is not clear how the new construct solves the regulatory issues. Avoid for now. This remains an indicative...

David Blennerhassett

Last Week in Event SPACE: Mapletree Merger, China Mobile, LG Chem, China Logistics

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

(Mostly) Asia M&A: December 2021 Roundup

For the month of December, 12 new deals (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$4bn. The...

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

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