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.

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/golden-eagle-retail-group" target="_blank" data-smartkarma-citation="entities:470:1" rel="noopener">Golden Eagle Retail (3308 HK)</a> disclosed a scheme privatisation offer from the controlling family at HK$6.88 per share, a 40.4% premium to the undisturbed price (HK$4.90 on 22 May).</li>
<li>Key condition is approval by at least 75% of disinterested shareholders (&lt;10% of all disinterested shareholders rejection). The shareholder with a blocking stake has provided an irrevocable. </li>
<li>The offer price is final. The offer is reasonable particularly as the sentiment on the department store sector remains weak. This looks like a done deal. </li>
</ul>



Golden Eagle Retail (3308 HK) disclosed a scheme privatisation offer from the controlling family at HK$6.88 per share, a 40.4% premium to the undisturbed price (HK$4.90 on 22 May).
Key condition is approval by at least 75% of disinterested shareholders (&lt;10% of all disinterested shareholders rejection). The shareholder with a blocking stake has provided an irrevocable. 
The offer price is final. The offer is reasonable particularly as the sentiment on the department store sector remains weak. This looks like a done deal. 


Golden Eagle Retail (3308 HK): Controlling Family’s Privatisation Offer at HK$6.88

<ul>
<li>
<a href="https://www.smartkarma.com/entities/lifestyle-international-holdings-ltd" target="_blank" data-smartkarma-citation="entities:112:1" rel="noopener">Lifestyle International Holdings (1212 HK)</a> announced a privatisation offer from Mr Lau, the controlling shareholder and Chairman, at HK$5.00 per scheme share, a 62.3% premium to the undisturbed price.</li>
<li>The offer price is final. Key conditions include approval by at least 75% of independent shareholders (&lt;10% of independent shareholders rejection). No shareholder holds a blocking stake.</li>
<li>The offer price is unattractive for long-term shareholders and below average sell-side price targets. Nevertheless, this deal likely goes through as the headcount test is not applicable.</li>
</ul>



Lifestyle International Holdings (1212 HK) announced a privatisation offer from Mr Lau, the controlling shareholder and Chairman, at HK$5.00 per scheme share, a 62.3% premium to the undisturbed price.
The offer price is final. Key conditions include approval by at least 75% of independent shareholders (&lt;10% of independent shareholders rejection). No shareholder holds a blocking stake.
The offer price is unattractive for long-term shareholders and below average sell-side price targets. Nevertheless, this deal likely goes through as the headcount test is not applicable.


Lifestyle International’s HK$5.00 Privatisation Bid

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Beijing Jingneng Clean Energy / Event-Driven

80.22%. That's the only figure that matters.
<a href="https://www.smartkarma.com/entities/beijing-jingneng-clean-energy-co-ltd" target="_blank" data-smartkarma-citation="entities:16316:1" rel="noopener">Beijing Jingneng Clean Energy (579 HK)</a> joins <a href="https://www.smartkarma.com/entities/harbin-electric-co-ltd-h" target="_blank" data-smartkarma-citation="entities:11116:1" rel="noopener">Harbin Electric Co Ltd H (1133 HK)</a> as the second Merger by Absorption transaction to <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0301/2021030103095.pdf" target="_blank" rel="noopener">fail</a> on account of the tendering condition.
1,207,310,872 H Shares, or 80.22% of the total issued H Shares held by the Independent H Shareholders, tendered. 
<a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2019/0520/ltn20190520874.pdf" target="_blank" rel="noopener">85.8%</a> of independent shares tendered into the Harbin Offer by the 60th day, and the Offer was subsequently, and unprecedently, extended (&amp; then failed). <a href="https://www.smartkarma.com/entities/huaneng-renewables-corp-h" target="_blank" data-smartkarma-citation="entities:7542:1" rel="noopener">Huaneng Renewables Corp H (958 HK)</a> received <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0120/2020012000919.pdf" target="_blank" rel="noopener">90.8%</a> on the 60th day - therefore the Offer was declared unconditional as to acceptances - but the Offer was still subject to approvals from NDRC and MOFCOM, and the registration of SAFE approval - and was also granted an extension by the SFC.
With less than 90% tendered AND with approvals/registration with Beijing SASAC, NDRC, and BAFE outstanding, the Offer for Jingneng was not extended.
Share tendered will be returned "as soon as possible but in any event within ten days".
More below the fold.

80.22%. That's the only figure that matters.
Beijing Jingneng Clean Energy (579 HK) joins Harbin Electric Co Ltd H (1133 HK) as the second Merger by Absorption transaction to fail on account of the tendering condition.
1,207,310,872 H Shares, or 80.22% of the total issued H Shares held by the Independent H Shareholders, tendered. 
85.8% of independent shares tendered into the Harbin Offer by the 60th day, and the Offer was subsequently, and unprecedently, extended (&amp; then failed). Huaneng Renewables Corp H (958 HK) received 90.8% on the 60th day - therefore the Offer was declared unconditional as to acceptances - but the Offer was still subject to approvals from NDRC and MOFCOM, and the registration of SAFE approval - and was also granted an extension by the SFC.
With less than 90% tendered AND with approvals/registration with Beijing SASAC, NDRC, and BAFE outstanding, the Offer for Jingneng was not extended.
Share tendered will be returned "as soon as possible but in any event within ten days".
More below the fold.

Beijing Jingneng (579 HK): And That's a Fail

PRC department stores and supermarket operator <a href="https://www.smartkarma.com/entities/springland-international-holdings-ltd" target="_blank" data-smartkarma-citation="entities:12042:1" rel="noopener">Springland International Holdings (1700 HK)</a> has received a <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2019/1101/ltn20191101731.pdf" target="_blank" rel="noopener">privatization Offer</a> by way of a Scheme at $2.30, a 63.1% premium to last close.
The Offeror is Chen Jiangqiuang, founder and executive director of Springland, holding 73.22%. Netting off 1.18% held by concert parties, the total number of Scheme Shares held by the Independent Shareholders is 25.59%, therefore the blocking stake at the Scheme Meeting is 2.559%.
The headcount test is in force as Springland is incorporated in Cayman Islands.
The Cancellation Price will not be increased, and the Offeror does not reserve the right to do so.
The Scheme Doc is expected to be dispatched on or before the 14 January after receiving an extension from the SFC. The provides an expected completion around the end of February 2020.
The mechanics of the Scheme are straightforward. The Price potentially less so, pitched below successful precedent transactions. But at a four-year high, this transaction should receive the necessary support to get over the line.

PRC department stores and supermarket operator Springland International Holdings (1700 HK) has received a privatization Offer by way of a Scheme at $2.30, a 63.1% premium to last close.
The Offeror is Chen Jiangqiuang, founder and executive director of Springland, holding 73.22%. Netting off 1.18% held by concert parties, the total number of Scheme Shares held by the Independent Shareholders is 25.59%, therefore the blocking stake at the Scheme Meeting is 2.559%.
The headcount test is in force as Springland is incorporated in Cayman Islands.
The Cancellation Price will not be increased, and the Offeror does not reserve the right to do so.
The Scheme Doc is expected to be dispatched on or before the 14 January after receiving an extension from the SFC. The provides an expected completion around the end of February 2020.
The mechanics of the Scheme are straightforward. The Price potentially less so, pitched below successful precedent transactions. But at a four-year high, this transaction should receive the necessary support to get over the line. 

Springland And The Latest Retail Takeover

Despite the unprecedented two-month extension, the <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2019/0719/ltn20190719681.pdf" target="_blank" rel="noopener">lapse</a> of the voluntary cash Offer for <a href="https://www.smartkarma.com/entities/harbin-electric-co-ltd-h" target="_blank" data-smartkarma-citation="entities:11116:1" rel="noopener">Harbin Electric Co Ltd H (1133 HK)</a> was always a very real possibility, as reflected in the wide spread to terms for the majority of the tendering period. Nevertheless, no other Hong Kong takeover has come so close to satisfying the acceptance condition, and failing.
88.32% of shares out tendered into Harbin's Offer at the close of the Offer, up from 85.84% on the May 20 (the day of the two-month extension), or an increase of 16.75mn shares. 
Only <a href="https://www.smartkarma.com/entities/new-world-dept-store-china" target="_blank" data-smartkarma-citation="entities:8144:1" rel="noopener">New World Dept Store China (825 HK)</a> provides a comparative study as to what can occur in a like-situation, wherein 83.9% of NWD's Offer shares was tendered, <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2017/0828/ltn201708281108.pdf" target="_blank" rel="noopener">falling short</a> of the 90% acceptance condition.
The volume in Harbin today was just 13.7mn shares - or 0.8% of shares out - as 88.3% of shares outstanding are locked up for around 10 days after last Friday's close.
These shares will be returned on or before the 29 July. Expect another leg down in the share price around this time when shares are returned.

Despite the unprecedented two-month extension, the lapse of the voluntary cash Offer for Harbin Electric Co Ltd H (1133 HK) was always a very real possibility, as reflected in the wide spread to terms for the majority of the tendering period. Nevertheless, no other Hong Kong takeover has come so close to satisfying the acceptance condition, and failing.
88.32% of shares out tendered into Harbin's Offer at the close of the Offer, up from 85.84% on the May 20 (the day of the two-month extension), or an increase of 16.75mn shares. 
Only New World Dept Store China (825 HK) provides a comparative study as to what can occur in a like-situation, wherein 83.9% of NWD's Offer shares was tendered, falling short of the 90% acceptance condition.
The volume in Harbin today was just 13.7mn shares - or 0.8% of shares out - as 88.3% of shares outstanding are locked up for around 10 days after last Friday's close.
These shares will be returned on or before the 29 July. Expect another leg down in the share price around this time when shares are returned.

Hong Kong

New World Department Store China is an investment holding company that owns and operates department stores and shopping malls in the People's Republic of China. The company operates under the "New World" and "Ba Li Chun Tian" brand names, offering a wide range of merchandise, catering, entertainment, and an online shopping platform "New Lab". It was founded in 1993 and is headquartered in Cheung Sha Wan, Hong Kong.

New World Department Store China (825 HK)

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New World Department Store China (825 HK)

Golden Eagle Retail (3308 HK): Controlling Family’s Privatisation Offer at HK$6.88

The offer price is final. The offer is reasonable particularly as the sentiment on the department store sector remains weak. This looks like a done...

Arun George

Lifestyle International’s HK$5.00 Privatisation Bid

The first case of controlling shareholders taking advantage of the upcoming removal of the headcount test for Cayman schemes. We would be buyers up...

Arun George

Beijing Jingneng (579 HK): And That's a Fail

There will be selling pressure on the stock, in two phases - tomorrow, and when shares are returned. However, Jingneng is trading cheap. This is a...

David Blennerhassett

Springland And The Latest Retail Takeover

PRC department stores and supermarket operator Springland International Holdings (1700 HK) has received a privatization Offer by way of a Scheme at...

David Blennerhassett

Post-Mortem on Harbin Electric

Despite the unprecedented two-month extension, the lapse of the voluntary cash Offer for Harbin Electric Co Ltd H (1133 HK) was always a very real...

David Blennerhassett

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