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

Beijing Enterprises Urban Resources / Event-Driven

Beijing Enterprises Urban Resources (3718 HK)

<ul>
<li>
<a href="https://www.smartkarma.com/entities/beijing-enterprises-water-group-limited" target="_blank" data-smartkarma-citation="entities:1660:1" rel="noopener">Beijing Enterprises Water Group (371 HK)</a>/(BEWG) will launch a conditional mandatory general offer (MGO) for <a href="https://www.smartkarma.com/entities/beijing-enterprises-urban-re" target="_blank" data-smartkarma-citation="entities:29131:1" rel="noopener">Beijing Enterprises Urban Resources (3718 HK)</a> at HK$0.78 as it crossed the 30%+ voting threshold. </li>
<li>The MGO is conditional on the offeror and concert parties holding more than 50% of the voting rights (currently own 38.64%). The MGO price is unattractive, in our view.</li>
<li>BEWG's justification for the offer and lack of a “no increase in offer price” wording suggests the possibility of a bump. The shares closed 2.6% above the MGO price.    </li>
</ul>



Beijing Enterprises Water Group (371 HK)/(BEWG) will launch a conditional mandatory general offer (MGO) for Beijing Enterprises Urban Resources (3718 HK) at HK$0.78 as it crossed the 30%+ voting threshold. 
The MGO is conditional on the offeror and concert parties holding more than 50% of the voting rights (currently own 38.64%). The MGO price is unattractive, in our view.
BEWG's justification for the offer and lack of a “no increase in offer price” wording suggests the possibility of a bump. The shares closed 2.6% above the MGO price.    


Beijing Enterprises Urban Resources’ MGO at HK$0.78. Is A Bump Possible?

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>
<a href="https://www.smartkarma.com/entities/beijing-enterprises-urban-re" target="_blank" data-smartkarma-citation="entities:29131:1" rel="noopener">Beijing Enterprises Urban Resources (3718 HK)</a> (BEUR) has announced a mandatory general cash offer from <a href="https://www.smartkarma.com/entities/beijing-enterprises-water-group-limited" target="_blank" data-smartkarma-citation="entities:1660:1" rel="noopener">Beijing Enterprises Water Group (371 HK)</a> (BEW). </li>
<li>This Offer was triggered by BEW increasing its stake to 31.23% from 29.97%. The Offer price is HK$0.78/share, a zero premium to last close and 20% above the 30-day average. </li>
<li>This is an underwhelming privatisation Offer. BEUR traded through terms as recent as last November. The Offer price has not been declared final.</li>
</ul>



Beijing Enterprises Urban Resources (3718 HK) (BEUR) has announced a mandatory general cash offer from Beijing Enterprises Water Group (371 HK) (BEW). 
This Offer was triggered by BEW increasing its stake to 31.23% from 29.97%. The Offer price is HK$0.78/share, a zero premium to last close and 20% above the 30-day average. 
This is an underwhelming privatisation Offer. BEUR traded through terms as recent as last November. The Offer price has not been declared final.


Beijing Enterprises Urban (3718 HK)'s Curious And Underwhelming Offer

<ul>
<li>
<a href="https://www.smartkarma.com/entities/beijing-enterprises-urban-re" target="_blank" data-smartkarma-citation="entities:29131:1" rel="noopener">Beijing Enterprises Urban Resources (3718 HK)</a>/BEUR and <a href="https://www.smartkarma.com/entities/beijing-enterprises-water-group-limited" target="_blank" data-smartkarma-citation="entities:1660:1" rel="noopener">Beijing Enterprises Water Group (371 HK)</a>/BEWG entered trading halts relating to the Code on Takeovers and Mergers and “a proposed notifiable transaction”, respectively. </li>
<li>BEWG, the largest BEUR shareholder, has steadily increased its stake from 26.25% at BEUR’s IPO on 15 January 2020 to 29.45% as of 31 March 2022.</li>
<li>Our best guess is that the trading halts relate to a potential mandatory general offer associated with BEWG acquiring 30%+ of the voting rights. </li>
</ul>



Beijing Enterprises Urban Resources (3718 HK)/BEUR and Beijing Enterprises Water Group (371 HK)/BEWG entered trading halts relating to the Code on Takeovers and Mergers and “a proposed notifiable transaction”, respectively. 
BEWG, the largest BEUR shareholder, has steadily increased its stake from 26.25% at BEUR’s IPO on 15 January 2020 to 29.45% as of 31 March 2022.
Our best guess is that the trading halts relate to a potential mandatory general offer associated with BEWG acquiring 30%+ of the voting rights. 


Beijing Enterprises Urban Resources’ Trading Halt: Is an MGO on the Cards?

<ul>
<li>
<a href="https://www.smartkarma.com/entities/beijing-enterprises-water-group-limited" target="_blank" data-smartkarma-citation="entities:1660:1" rel="noopener">Beijing Enterprises Water Group (371 HK)</a> (BEW) and <a href="https://www.smartkarma.com/entities/beijing-enterprises-urban-re" target="_blank" data-smartkarma-citation="entities:29131:1" rel="noopener">Beijing Enterprises Urban Resources (3718 HK)</a> (BEUR) were both suspended this morning, the latter pursuant to the Takeovers Code. </li>
<li>BEW holds ~29% in BEUR, a stake largely unchanged since BEUR's listing in January 2020.</li>
<li>A possible privatisation of BEUR follows on the heels of the ongoing take-private transaction for <a href="https://www.smartkarma.com/entities/guodian-technology-environment-group-corp" target="_blank" data-smartkarma-citation="entities:3941:1" rel="noopener">Guodian Technology &amp; Environment Group (1296 HK)</a>, another waste treatment and environmental play.</li>
</ul>



Beijing Enterprises Water Group (371 HK) (BEW) and Beijing Enterprises Urban Resources (3718 HK) (BEUR) were both suspended this morning, the latter pursuant to the Takeovers Code. 
BEW holds ~29% in BEUR, a stake largely unchanged since BEUR's listing in January 2020.
A possible privatisation of BEUR follows on the heels of the ongoing take-private transaction for Guodian Technology &amp; Environment Group (1296 HK), another waste treatment and environmental play.


Beijing Enterprises Urban Resources (3718 HK): Potential Offer

China

Beijing Enterprises Urban Resources is an investment holding company primarily engaged in urban services and hazardous waste treatment. Its urban services include road cleaning, garbage sorting, collection, and transportation, while hazardous waste treatment involves disposal and sale of recycling products. The company also provides waste electrical and electronic equipment treatment. It is headquartered in Wan Chai, Hong Kong, and was founded in 2013.

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Beijing Enterprises Urban Resources (3718 HK)

Beijing Enterprises Urban Resources’ MGO at HK$0.78. Is A Bump Possible?

BEWG will launch a MGO at HK$0.78. The shares closed above terms. BEWG's justification for the offer and lack of a “no increase in offer price”...

Arun George

Beijing Enterprises Urban (3718 HK)'s Curious And Underwhelming Offer

I'd be picking up shares around terms. BEW wants to take BEUR under the fold. It probably needs to bump the Offer price if it wants to do that.

David Blennerhassett

Beijing Enterprises Urban Resources’ Trading Halt: Is an MGO on the Cards?

Our best guess is that the trading halts of BUER and BEWG (the largest shareholder) relate to a potential mandatory general offer associated with...

Arun George

Beijing Enterprises Urban Resources (3718 HK): Potential Offer

Shares are currently suspended, so there is nothing to be done yet. IF a firm Offer unfolds from Beijing Enterprise Water, I expect a punchy premium.

David Blennerhassett

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