Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Beijing Capital Land Ltd H / Event-Driven

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<p>This insight provides a quick summary of gross/annualised (where possible) spreads (on deals discussed on Smartkarma) across Asia-Pacific as at the last trading date, and how those spreads have changed over the last week; plus the next hard events over the coming weeks.</p>
<p>I number 36, mostly firm, deals around the region.</p>
<p>More below the fold.</p>
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This insight provides a quick summary of gross/annualised (where possible) spreads (on deals discussed on Smartkarma) across Asia-Pacific as at the last trading date, and how those spreads have changed over the last week; plus the next hard events over the coming weeks.
I number 36, mostly firm, deals around the region.
More below the fold.


Asia-Pac Weekly Risk Arb Summary: Beijing Capital Land, Suchuang Gas, Siam Dev, 1300Smiles

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<p>On the 9 July, <a href="https://www.smartkarma.com/entities/beijing-capital-land-ltd-h" target="_blank" data-smartkarma-citation="entities:4543:1" rel="noopener">Beijing Capital Land Ltd H (2868 HK)</a> (BCL) <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0709/2021070901284.pdf" target="_blank" rel="noopener">announced</a> a pre-conditional Offer from its controlling shareholder, state-owned Beijing Capital Group. The Offer price of HK$2.80/share was a 62.79% premium to last close, and a 150% premium to the average closing price over the previous 60 trading days. The Offer price would NOT be increased. No dividends are expected to be declared. A concurrent Offer for BCL's domestic shares at RMB2.334080/share was also tabled.</p>
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<p>The pre-conditions, which <em>could not be waived</em>, included approvals from NDRC, MoC, SAFE, and if applicable, SASAC. Those pre-conditions were <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0818/2021081801497.pdf" target="_blank" rel="noopener">satisfied</a> on the 18 August. </p>
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<div>The Composite Doc is now <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0826/2021082601692.pdf" target="_blank" rel="noopener">out</a>. The EGM/H-Class Meeting is scheduled for the 23 September, with an expected payment on the 12 October.</div>
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<div>This is done and should trade close to terms.</div>
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<p></p>
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On the 9 July, Beijing Capital Land Ltd H (2868 HK) (BCL) announced a pre-conditional Offer from its controlling shareholder, state-owned Beijing Capital Group. The Offer price of HK$2.80/share was a 62.79% premium to last close, and a 150% premium to the average closing price over the previous 60 trading days. The Offer price would NOT be increased. No dividends are expected to be declared. A concurrent Offer for BCL's domestic shares at RMB2.334080/share was also tabled.


The pre-conditions, which could not be waived, included approvals from NDRC, MoC, SAFE, and if applicable, SASAC. Those pre-conditions were satisfied on the 18 August. 

The Composite Doc is now out. The EGM/H-Class Meeting is scheduled for the 23 September, with an expected payment on the 12 October.

This is done and should trade close to terms.




Beijing Capital Land (2868 HK): EGM On The 23 Sept. IFA Says Fair

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<p>Back on the 9 July, <a href="https://www.smartkarma.com/entities/beijing-capital-land-ltd-h" target="_blank" data-smartkarma-citation="entities:4543:1" rel="noopener">Beijing Capital Land Ltd H (2868 HK)</a> (BCL) <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0709/2021070901284.pdf" target="_blank" rel="noopener">announced</a> a pre-conditional Offer from its controlling shareholder, state-owned Beijing Capital Group, otherwise known as the Capital Group. The Offer price of HK$2.80/share was a 62.79% premium to last close, and a 150% premium to the average closing price over the previous 60 trading days. The Offer price would NOT be increased. No dividends are expected to be declared. A concurrent Offer for BCL's domestic shares at RMB2.334080/share was also tabled.</p>
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<p>The pre-conditions, which cannot be waived, included approvals from NDRC, MoC, SAFE, and if applicable, SASAC.</p>
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<p>As BCL is PRC incorporated and compulsory acquisition is not afforded under PRC law,  this delisting proposal is by way of a Merger by Absorption, which involves a Scheme-like vote from disinterested shareholders.</p>
<p>Unlike a number of PRC-incorporated privatisations, there is no tendering acceptance condition attached to this delisting.</p>
<p>Typically Merger by Absorption transactions complete in around four months.</p>
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<p>This <em>appeared</em> a relatively clean deal although from the onset, it traded wide to terms, at an average gross spread to terms of ~13%, up to and including yesterday.</p>
<p>The dispatch of the Composite Doc was, as expected, <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0729/2021072901655.pdf" target="_blank" rel="noopener">delayed</a> to the 9 September (officially granted by the SFC on the  2 August) from the 29 July. </p>
<p>A profit warning was announced on the <a href="https://www1.hkexnews.hk/search/titlesearch.xhtml?lang=en" target="_blank" rel="noopener">30 July</a>. </p>
<p>Last night, BCL said the Pre-Condition has been <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0818/2021081801497.pdf" target="_blank" rel="noopener">satisfied</a>. There was no further application to the SFC to extend the dispatch of the Composite Doc.</p>
<p>This is a positive development. Expect the spread to tighten when shares begin trading this morning. </p>
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<p>More below the fold.</p>
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Back on the 9 July, Beijing Capital Land Ltd H (2868 HK) (BCL) announced a pre-conditional Offer from its controlling shareholder, state-owned Beijing Capital Group, otherwise known as the Capital Group. The Offer price of HK$2.80/share was a 62.79% premium to last close, and a 150% premium to the average closing price over the previous 60 trading days. The Offer price would NOT be increased. No dividends are expected to be declared. A concurrent Offer for BCL's domestic shares at RMB2.334080/share was also tabled.


The pre-conditions, which cannot be waived, included approvals from NDRC, MoC, SAFE, and if applicable, SASAC.


As BCL is PRC incorporated and compulsory acquisition is not afforded under PRC law,  this delisting proposal is by way of a Merger by Absorption, which involves a Scheme-like vote from disinterested shareholders.
Unlike a number of PRC-incorporated privatisations, there is no tendering acceptance condition attached to this delisting.
Typically Merger by Absorption transactions complete in around four months.


This appeared a relatively clean deal although from the onset, it traded wide to terms, at an average gross spread to terms of ~13%, up to and including yesterday.
The dispatch of the Composite Doc was, as expected, delayed to the 9 September (officially granted by the SFC on the  2 August) from the 29 July. 
A profit warning was announced on the 30 July. 
Last night, BCL said the Pre-Condition has been satisfied. There was no further application to the SFC to extend the dispatch of the Composite Doc.
This is a positive development. Expect the spread to tighten when shares begin trading this morning. 


More below the fold.


Beijing Capital Land (2868 HK): Pre-Cons Satisfied. This Should Trade Tight

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<p data-v-da61000a="" data-v-294dc056="">This is the latest update in a series dating back to <em><a href="https://skr.ma/c7hcH" target="_blank" rel="noopener">Legend's Conversion of Domestic Shares</a></em> in June 2018.</p>
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<p data-v-da61000a="" data-v-294dc056="">To date, 28 companies have sought approval to convert their domestic shares and/or unlisted foreign shares into H shares, which would then be eligible to be listed and traded on Hong Kong's stock exchange.</p>
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<p data-v-da61000a="" data-v-294dc056="">16 companies have now been given CSRC and Hong Kong listing approval to convert such shares. Five of those have seen various degrees of movement in the converted shares.</p>
<p data-v-da61000a="" data-v-294dc056=""><a href="https://www.smartkarma.com/entities/sichuan-languang-justbon-service-group-co-ltd-h" target="_blank" data-smartkarma-citation="entities:28337:1" rel="noopener">Sichuan Languang Justbon Service Group (2606 HK)</a> received approval late last year but did not convert - and was subsequently subject to an Offer. </p>
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<p data-v-da61000a="" data-v-294dc056="">To date, two companies have withdrawn their application to convert their domestic shares.  Both of these companies have now been subject to Offers.</p>
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<p data-v-da61000a="" data-v-294dc056="">As always, more below the fold. </p>
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This is the latest update in a series dating back to Legend's Conversion of Domestic Shares in June 2018.


To date, 28 companies have sought approval to convert their domestic shares and/or unlisted foreign shares into H shares, which would then be eligible to be listed and traded on Hong Kong's stock exchange.


16 companies have now been given CSRC and Hong Kong listing approval to convert such shares. Five of those have seen various degrees of movement in the converted shares.
Sichuan Languang Justbon Service Group (2606 HK) received approval late last year but did not convert - and was subsequently subject to an Offer. 


To date, two companies have withdrawn their application to convert their domestic shares.  Both of these companies have now been subject to Offers.


As always, more below the fold. 


Full Circulation Of H-Shares: July 2021 Update

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.

<p><a href="https://www.smartkarma.com/entities/beijing-capital-land-ltd-h" target="_blank" data-smartkarma-citation="entities:4543:1" rel="noopener">Beijing Capital Land Ltd H (2868 HK)</a>/BCL is one of the leading integrated property developers in China. It focuses on residential property, integrated outlets, urban core complex and primary land development.</p><p>After market close on Friday, BCL announced pre-conditional privatisation by merger by absorption from Capital Group, the parent company and largest shareholder. The offeror will offer HK$2.80 per H share. The bid represents a premium of 62.79% over the closing price of HK$1.72 per share on the last trading day (7 July 2021 prior to the trading halt). </p><p>The pre-condition is regulatory approval from the NDRC, MOFCOM, SAFE and if applicable, the SASAC. As the offeror is an SOE, we think that regulatory approvals will be forthcoming. The key condition for the privatisation will be approval by at least 75% independent H-shareholders (&lt;10% of all independent H-shareholders rejection). There is no minimum acceptance condition. Dissenter rights are available. </p><p>Independent H-shareholders shareholders represent 1,349.9 million shares which are 30.94% of outstanding shares (88.17% of H-shares). Consequently, the 10% blocking stake is 135.0 million shares which are 3.09% of the outstanding shares (8.82% of H-shares). No independent H shareholder holds a blocking stake. </p><div class="content-highlight"><p>While the implied value of the offer is substantially below book value and unattractive in comparison to long-term historical share prices, it is a material premium to more recent historical share prices and P/B multiples. In combination with no shareholder holding a blocking stake, we think that the privatisation proposal will likely succeed. </p></div>

Beijing Capital Land Ltd H (2868 HK)/BCL is one of the leading integrated property developers in China. It focuses on residential property, integrated outlets, urban core complex and primary land development.After market close on Friday, BCL announced pre-conditional privatisation by merger by absorption from Capital Group, the parent company and largest shareholder. The offeror will offer HK$2.80 per H share. The bid represents a premium of 62.79% over the closing price of HK$1.72 per share on the last trading day (7 July 2021 prior to the trading halt). The pre-condition is regulatory approval from the NDRC, MOFCOM, SAFE and if applicable, the SASAC. As the offeror is an SOE, we think that regulatory approvals will be forthcoming. The key condition for the privatisation will be approval by at least 75% independent H-shareholders (&lt;10% of all independent H-shareholders rejection). There is no minimum acceptance condition. Dissenter rights are available. Independent H-shareholders shareholders represent 1,349.9 million shares which are 30.94% of outstanding shares (88.17% of H-shares). Consequently, the 10% blocking stake is 135.0 million shares which are 3.09% of the outstanding shares (8.82% of H-shares). No independent H shareholder holds a blocking stake. While the implied value of the offer is substantially below book value and unattractive in comparison to long-term historical share prices, it is a material premium to more recent historical share prices and P/B multiples. In combination with no shareholder holding a blocking stake, we think that the privatisation proposal will likely succeed. 

Beijing Capital Land’s Privatisation Offer from the Parent

China

Beijing Capital Land Limited develops quality/high-end office buildings and commercial properties, and medium to high-end residential properties in Beijing, China.

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Beijing Capital Land Ltd H (2868 HK)

Asia-Pac Weekly Risk Arb Summary: Beijing Capital Land, Suchuang Gas, Siam Dev, 1300Smiles

This insight provides a quick summary of gross/annualised (where possible) spreads on 36 (mostly) firm deals as at the last trading date, and how...

David Blennerhassett

Beijing Capital Land (2868 HK): EGM On The 23 Sept. IFA Says Fair

This is done - play the spread here. Currently trading at a gross/annualised spread of 1.4%/12.1%., assuming payment on the 12 October.

David Blennerhassett

Beijing Capital Land (2868 HK): Pre-Cons Satisfied. This Should Trade Tight

This looks done - play the spread here. Assuming payment late-Oct, I would expect BCL to trade around $2.72 today, or a 3%/15% gross/annualised...

David Blennerhassett

Full Circulation Of H-Shares: July 2021 Update

CSRC circulation approval is an endorsement of the existing internal framework of the company. There also does appear to be some degree of...

David Blennerhassett

Beijing Capital Land’s Privatisation Offer from the Parent

BCL announced pre-conditional privatisation by merger by absorption from Capital Group for HK$2.80 per H share. We think that the privatisation...

Arun George

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