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>Today’s <a href="https://www.smartkarma.com/entities/hkbn-ltd" target="_blank" data-smartkarma-citation="entities:289:1" rel="noopener">HKBN Ltd (1310 HK)</a> monthly update notes that I Squared has completed due diligence and is finalising the terms of a possible preconditional offer. </li>
<li>The I Squared bid will likely be a modest premium to the China Mobile offer with a 50% minimum tendering condition. The key unknown is securing regulatory approvals. </li>
<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> will first react to an I Squared offer by maintaining terms. However, regardless of whether I Squared secures regulatory approvals, it is likely to match terms. </li>
</ul>


Today’s HKBN Ltd (1310 HK) monthly update notes that I Squared has completed due diligence and is finalising the terms of a possible preconditional offer. 
The I Squared bid will likely be a modest premium to the China Mobile offer with a 50% minimum tendering condition. The key unknown is securing regulatory approvals. 

China Mobile (941 HK) will first react to an I Squared offer by maintaining terms. However, regardless of whether I Squared secures regulatory approvals, it is likely to match terms. 


HKBN (1310 HK): I Squared Inches Closer to a Competing Offer

<ul>
<li>A new <a href="https://std.stheadline.com/realtime/article/2058629/%E5%8D%B3%E6%99%82-%E8%B2%A1%E7%B6%93-%E9%A6%99%E6%B8%AF%E5%AF%AC%E9%A0%BB%E8%B3%A3%E7%9B%A4%E8%86%A0%E7%9D%80%E9%80%BE3%E5%80%8B%E6%9C%88-%E6%B6%88%E6%81%AF-%E8%82%A1%E6%9D%B1%E9%80%80%E5%87%BA%E9%9C%80%E6%B1%82%E5%BC%B7%E7%83%88-%E4%B8%80%E6%97%A6%E8%A7%B8%E7%A4%81-%E6%9C%AA%E4%BE%86%E4%BD%9C%E5%83%B9%E5%8B%A2%E6%9B%B4%E4%BD%8E" target="_blank" rel="noopener">Sing Tao Daily article</a> on <a href="https://www.smartkarma.com/entities/hkbn-ltd" target="_blank" data-smartkarma-citation="entities:289:1" rel="noopener">HKBN Ltd (1310 HK)</a> claims that <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>’s offer is a stalemate, and a potential I Squared offer faces regulatory challenges. </li>
<li>The article is being unduly alarmist. The concerns raised on the China Mobile offer remain premature, and there remains a medium-to-high probability of a competing offer from I Squared. </li>
<li>Last Friday, MBK converted its vendor loan notes (VLN) into shares, which could signal that an I Squared competing offer is imminent. </li>
</ul>


A new Sing Tao Daily article on HKBN Ltd (1310 HK) claims that China Mobile (941 HK)’s offer is a stalemate, and a potential I Squared offer faces regulatory challenges. 
The article is being unduly alarmist. The concerns raised on the China Mobile offer remain premature, and there remains a medium-to-high probability of a competing offer from I Squared. 
Last Friday, MBK converted its vendor loan notes (VLN) into shares, which could signal that an I Squared competing offer is imminent. 


HKBN (1310 HK): Another Sing Tao Article as Speculation Swirls on MBK’s Loan Notes Conversion

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hkbn-ltd" target="_blank" rel="noopener">HKBN Ltd (1310 HK)</a> shares declined 4.4% after a <a href="https://std.stheadline.com/daily/article/2657779/%E6%97%A5%E5%A0%B1-%E8%B2%A1%E7%B6%93-%E4%B8%AD%E7%A7%BB%E5%8B%95%E8%B3%BC%E9%A6%99%E6%B8%AF%E5%AF%AC%E9%A0%BB%E6%81%90%E8%A7%B8%E7%A4%81" target="_blank" rel="noopener">Sing Tao Daily article</a> claimed that the precondition satisfaction of <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>’s offer is at a stalemate. </li>
<li>The mainland regulatory authorities have not provided any feedback on the approval process. The <a href="https://www.smartkarma.com/entities/china-traditional-chinese-medicine" target="_blank" data-smartkarma-citation="entities:351:1" rel="noopener">China Traditional Chinese Medicine (570 HK)</a> deal break is cited as a cautionary tale.</li>
<li>While the China TCM deal break taught us that no deal is safe, even an SOE-sponsored deal, the article's concerns have little merit. This is a buy.</li>
</ul>



HKBN Ltd (1310 HK) shares declined 4.4% after a Sing Tao Daily article claimed that the precondition satisfaction of China Mobile (941 HK)’s offer is at a stalemate. 
The mainland regulatory authorities have not provided any feedback on the approval process. The China Traditional Chinese Medicine (570 HK) deal break is cited as a cautionary tale.
While the China TCM deal break taught us that no deal is safe, even an SOE-sponsored deal, the article's concerns have little merit. This is a buy.


HKBN (1310 HK): A Press Report Causes Trepidation

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>Two hours before China Mobile's pre-conditional voluntary Offer announcement on the 2 December, <a href="https://www.smartkarma.com/entities/hkbn-ltd" target="_blank" data-smartkarma-citation="entities:289:1" rel="noopener">HKBN Ltd (1310 HK)</a>  <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2024/1202/2024120202069.pdf" target="_blank" rel="noopener">flagged</a> a possible separate Offer from I Squared Asia-backed HGC Global Communication (HGC). </li>
<li>No price was mentioned, although HKBN and I Squared "are in discussions on the terms of the proposal (including the price)." The media is reporting a HK$5-HK$6/share price range.</li>
<li>Apart from anti-competition concerns via a HKBN/HGC tie-in; would HGC even get approval from the powers that be to proceed with a merger?</li>
</ul>


Two hours before China Mobile's pre-conditional voluntary Offer announcement on the 2 December, HKBN Ltd (1310 HK)  flagged a possible separate Offer from I Squared Asia-backed HGC Global Communication (HGC). 
No price was mentioned, although HKBN and I Squared "are in discussions on the terms of the proposal (including the price)." The media is reporting a HK$5-HK$6/share price range.
Apart from anti-competition concerns via a HKBN/HGC tie-in; would HGC even get approval from the powers that be to proceed with a merger?


HKBN (1310 HK): Just How Likely Is An I Squared Offer?

Forensic Accounting

<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> was a logical suitor for <a href="https://www.smartkarma.com/entities/hkbn-ltd" target="_blank" data-smartkarma-citation="entities:289:1" rel="noopener">HKBN Ltd (1310 HK)</a>. A non-PRC (or government-affiliated) corporation taking over a media/broadband/telco in Hong Kong is probably a non-starter.</li>
<li>China Mobile has a made a <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2024/1202/2024120203351.pdf" target="_blank" rel="noopener">pre-conditional voluntary Offer</a> at HK$5.23/share, a 40.97% premium to undisturbed. The price is final. </li>
<li>Pre-Cons are the usual suspects (NDRC, Mofcom &amp; SASAC). The Offer itself conditional on a 50% acceptance hurdle, with 24.96% in the bag. The intention is to maintain HKBN's listing. </li>
</ul>



China Mobile (941 HK) was a logical suitor for HKBN Ltd (1310 HK). A non-PRC (or government-affiliated) corporation taking over a media/broadband/telco in Hong Kong is probably a non-starter.
China Mobile has a made a pre-conditional voluntary Offer at HK$5.23/share, a 40.97% premium to undisturbed. The price is final. 
Pre-Cons are the usual suspects (NDRC, Mofcom &amp; SASAC). The Offer itself conditional on a 50% acceptance hurdle, with 24.96% in the bag. The intention is to maintain HKBN's listing. 


HKBN (1310 HK): China Mobile's "Fair" Tendering Offer

Hong Kong

HKT is Hong Kong's premier telecommunications service provider and a leading innovator, offering fixed-line, mobile, broadband internet, and media entertainment services. The company also provides enterprise solutions, digital ventures, and other services such as its loyalty program, financial services, and health technology. HKT was incorporated in 2011 and is headquartered in Quarry Bay, Hong Kong, with its origins tracing back to the Hong Kong Telephone Company Limited established in 1925.

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HKT (6823 HK)

HKBN (1310 HK): I Squared Inches Closer to a Competing Offer

China Mobile will first react to an I Squared offer by maintaining terms. However, regardless of whether I Squared secures regulatory approvals, it...

Arun George

HKBN (1310 HK): Another Sing Tao Article as Speculation Swirls on MBK’s Loan Notes Conversion

The article is being unduly alarmist. The concerns raised on the China Mobile offer remain premature, and there remains a medium-to-high...

Arun George

HKBN (1310 HK): A Press Report Causes Trepidation

The article's concerns have little merit at this process stage. There is a medium-to-high probability of a competing offer. The selloff is a buying...

Arun George

HKBN (1310 HK): Just How Likely Is An I Squared Offer?

According to Sing Tao Daily, PRC regulatory authorities have yet to respond to the transaction. Not quite sure what that means. It's been a little...

David Blennerhassett

HKBN (1310 HK): China Mobile's "Fair" Tendering Offer

Say a conservative six months to secure reg approvals, and an additional two months to complete the Offer - I'd pay ~HK$4.95/share - perhaps up to...

David Blennerhassett

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