Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

On the 24 January last year, <a href="https://www.smartkarma.com/entities/changyou-com-ltd-ads" target="_blank" data-smartkarma-citation="entities:19287:1" rel="noopener">Changyou.com (CYOU US)</a> <a href="http://ir.changyou.com/file/New-Comet-20200124.pdf" target="_blank" rel="noopener">entered</a> into a definitive agreement with <a href="https://www.smartkarma.com/entities/sohu-com-ltd" target="_blank" data-smartkarma-citation="entities:22853:1" rel="noopener">Sohu.com Inc (SOHU US)</a> at US$5.40/share, or US$10.80/ADS in cash. On the 14 April,  Sohu <a href="http://investors.sohu.com/static-files/4f6c805d-a81c-4799-a043-3d163d5702e7" target="_blank" rel="noopener">announced</a> the filing of the definitive plan of merger.
<div>
Sohu held 67.4% of shares out in Changyou via its A and B shares and 95.3% of the voting rights given the disproportionate voting power of the B shares. As Sohu held &gt;90% of the votes, the Offer was in the form of a short-form statutory merger under Cayman Law - i.e. approval from Changyou's shareholders was not required. No vote, no dissent. Done deal.
But wait ...
In a ruling handed down on the 28 January, the Grand Court of the Cayman Islands concluded that shareholders of companies that undertake a 'short-form' merger are entitled to dissent. 
<blockquote>
It would be absurd to exclude a dissentient member of a company subject to short-form merger from the protection of section 238 simply because, unlike in the case of a long-form merger, that member is not allowed to vote.
</blockquote>
The ruling has wide-ranging implications.
More below the fold.
</div>

On the 24 January last year, Changyou.com (CYOU US) entered into a definitive agreement with Sohu.com Inc (SOHU US) at US$5.40/share, or US$10.80/ADS in cash. On the 14 April,  Sohu announced the filing of the definitive plan of merger.

Sohu held 67.4% of shares out in Changyou via its A and B shares and 95.3% of the voting rights given the disproportionate voting power of the B shares. As Sohu held &gt;90% of the votes, the Offer was in the form of a short-form statutory merger under Cayman Law - i.e. approval from Changyou's shareholders was not required. No vote, no dissent. Done deal.
But wait ...
In a ruling handed down on the 28 January, the Grand Court of the Cayman Islands concluded that shareholders of companies that undertake a 'short-form' merger are entitled to dissent. 

It would be absurd to exclude a dissentient member of a company subject to short-form merger from the protection of section 238 simply because, unlike in the case of a long-form merger, that member is not allowed to vote.

The ruling has wide-ranging implications.
More below the fold.


Changyou (CYOU US): Short-Form Merger Dissent Now Permitted

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Bottom-Up

<ul class="">
<li>Property Developers’ advertising budgets surged in December 2020.</li>
<li>BEKE’s active users increased by 147% YoY in December 2020, compared to 61% YoY for Anjuke.</li>
<li>We believe revenue will rise by 29% in 2021.</li>
<li>We set the upside between 24% and 33% for the end of 2021.</li>
</ul>


Property Developers’ advertising budgets surged in December 2020.
BEKE’s active users increased by 147% YoY in December 2020, compared to 61% YoY for Anjuke.
We believe revenue will rise by 29% in 2021.
We set the upside between 24% and 33% for the end of 2021.


KE (BEKE): Outperform Competitors in Booming Property Market

<div>
14 months ago, almost to the day, <a href="https://www.smartkarma.com/entities/china-biologic-products-hold" target="_blank" data-smartkarma-citation="entities:22633:1" rel="noopener">China Biologic Products (CBPO US)</a> <a href="http://chinabiologic.investorroom.com/2019-09-18-China-Biologic-Announces-Receipt-of-Preliminary-Non-Binding-Going-Private-Proposal" target="_blank" rel="noopener">announced</a> the receipt of a preliminary non-binding proposal from Beachhead Holdings, CITIC, PW Medtech, Parfield International, Hillhouse, and V-Sciences Investments for US$120/share, in cash.
Yesterday, CBPO entered into a <a href="http://app.quotemedia.com/data/downloadFiling?webmasterId=101533&amp;ref=115451875&amp;type=PDF&amp;symbol=CBPO&amp;companyName=China+Biologic+Products+Holdings+Inc.&amp;formType=6-K&amp;dateFiled=2020-11-19&amp;CK=1369868" target="_blank" rel="noopener">definitive merger agreement</a>, also at US$120/share.
The merger is conditional on an affirmative vote from shareholders representing at least two-thirds of the shares out, and that the aggregate quantity of dissenting shares shall be less than 8% of shares out.
As of the date of merger agreement, members of the Buyer Consortium (including <a href="https://www.smartkarma.com/entities/pw-medtech-group-ltd" target="_blank" data-smartkarma-citation="entities:9891:1" rel="noopener">Pw Medtech (1358 HK)</a>) and the Rollover Management Members, beneficially own shares representing ~68.84% of shares out.
</div>
Done deal. Possible completion late 1Q21, early 2Q1.
More below the fold.
<div></div>
<div>

</div>


14 months ago, almost to the day, China Biologic Products (CBPO US) announced the receipt of a preliminary non-binding proposal from Beachhead Holdings, CITIC, PW Medtech, Parfield International, Hillhouse, and V-Sciences Investments for US$120/share, in cash.
Yesterday, CBPO entered into a definitive merger agreement, also at US$120/share.
The merger is conditional on an affirmative vote from shareholders representing at least two-thirds of the shares out, and that the aggregate quantity of dissenting shares shall be less than 8% of shares out.
As of the date of merger agreement, members of the Buyer Consortium (including Pw Medtech (1358 HK)) and the Rollover Management Members, beneficially own shares representing ~68.84% of shares out.

Done deal. Possible completion late 1Q21, early 2Q1.
More below the fold.





China Biologics (CBPO US): Firm Offer Backed By Prerequisite Votes

On the 30 September, <a href="https://www.smartkarma.com/entities/wanda-sports-group-co-ltd" target="_blank" data-smartkarma-citation="entities:28119:1" rel="noopener">Wanda Sports Group (WSG US)</a> announced Dalian Wanda Group (DWG) had submitted a preliminary non-binding <a href="https://investor.wsg.cn/news-releases/news-release-details/wanda-sports-group-company-limited-announces-receipt-preliminary" target="_blank" rel="noopener">proposal</a> at US$2.50/ADS, a 38.9% premium to last close.
DWG currently owns all the Class B ordinary shares of WSG, representing ~71.68% of all the issued shares, and  ~91.01% of the voting power of the Company. 
At this juncture, one would assume a "going private transaction" would be done via a short-form merger - therefore there will be no shareholder vote and no dissenting.
But the twist here is that WSG is incorporated in Hong Kong (one of the very few  US-listed Chinese companies incorporated in HK), therefore a take-private transaction must adhere to the law of their jurisdiction of incorporation. That raises the bar on DWG taking WSG private.
As always, more below the fold.

On the 30 September, Wanda Sports Group (WSG US) announced Dalian Wanda Group (DWG) had submitted a preliminary non-binding proposal at US$2.50/ADS, a 38.9% premium to last close.
DWG currently owns all the Class B ordinary shares of WSG, representing ~71.68% of all the issued shares, and  ~91.01% of the voting power of the Company. 
At this juncture, one would assume a "going private transaction" would be done via a short-form merger - therefore there will be no shareholder vote and no dissenting.
But the twist here is that WSG is incorporated in Hong Kong (one of the very few  US-listed Chinese companies incorporated in HK), therefore a take-private transaction must adhere to the law of their jurisdiction of incorporation. That raises the bar on DWG taking WSG private.
As always, more below the fold.

Wanda Sports (WSG US): Preliminary Proposal From Dalian Wanda

<div>
Back on the 6 July, <a href="https://www.smartkarma.com/entities/sina-corp-china" target="_blank" data-smartkarma-citation="entities:22691:1" rel="noopener">Sina Corp (Class A) (SINA US)</a> <a href="http://ir.sina.com/index.php/static-files/69e95aee-2729-457f-be56-73628090b8ea" target="_blank" rel="noopener">announced</a> the receipt of a preliminary non-binding “going private” proposal from New Wave MMXV - a company controlled by its chairman/CEO Charles Chao - at US$41/share,  a ~20% premium to the average closing price during the 30 trading days prior to the announcement.
Yesterday, SINA announced it had <a href="http://ir.sina.com/static-files/de1ddd0f-354f-42de-9b33-b1bc414ab1b4" target="_blank" rel="noopener">entered</a> into an Agreement and Plan of Merger with New Wave pursuant to which New Wave will acquire all of the outstanding ordinary shares not owned at US$43.30/share (an 18.1% premium to the undisturbed price).
Despite the 5.6% bump to the initial non-binding proposal, the Offer price still looks light. However, Chao/New Wave controls ~61% of the voting power, and the merger requires two-thirds approval.
The merger is expected to close in the 1Q21. 
</div>
<div>
As always, more below the fold.
</div>


Back on the 6 July, Sina Corp (Class A) (SINA US) announced the receipt of a preliminary non-binding “going private” proposal from New Wave MMXV - a company controlled by its chairman/CEO Charles Chao - at US$41/share,  a ~20% premium to the average closing price during the 30 trading days prior to the announcement.
Yesterday, SINA announced it had entered into an Agreement and Plan of Merger with New Wave pursuant to which New Wave will acquire all of the outstanding ordinary shares not owned at US$43.30/share (an 18.1% premium to the undisturbed price).
Despite the 5.6% bump to the initial non-binding proposal, the Offer price still looks light. However, Chao/New Wave controls ~61% of the voting power, and the merger requires two-thirds approval.
The merger is expected to close in the 1Q21. 


As always, more below the fold.


China

58.Com, Inc. operates as a local life service platform. The Company transfers products and services between purchasers and sellers. 58.Com offers housing rental, recruitment, second-hand product, travel, catering, entertainment, and group-buying information and services.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

58.Com Inc Adr (WUBA US)

Changyou (CYOU US): Short-Form Merger Dissent Now Permitted

The Court rightfully concluded s.238 provides the right of dissent in a short-form merger. Offerors will now face the prospect of dissension from...

David Blennerhassett

KE (BEKE): Outperform Competitors in Booming Property Market

Property Developers’ advertising budgets surged in December 2020. BEKE’s active users increased by 147% YoY in December 2020. We set the upside...

Ming Lu

China Biologics (CBPO US): Firm Offer Backed By Prerequisite Votes

Trading at a gross/annualised spread at 4.4%/11.7%. This looks like a pretty clean deal for around four-five months of work.

David Blennerhassett

Wanda Sports (WSG US): Preliminary Proposal From Dalian Wanda

Preliminary Non-Binding Proposal at US$2.50/ADS. The Offeror has 91.01% of the voting power. If a firm Offer is tabled, this will be done via a...

David Blennerhassett

SINA Corp: Offer Firmed. Price Sweetened

Sina Corp (Class A) (SINA US) looks sets to join the growing list of Chinese companies seeking to delist in the US and relist, ostensibly in Hong...

David Blennerhassett

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)