Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Beijing Enterprises Urban Resources / Event-Driven

Beijing Enterprises Urban Resources (3718 HK)

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<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

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.

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<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

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<li>
<a href="https://www.smartkarma.com/entities/singapore-press-holdings-limited" target="_blank" data-smartkarma-citation="entities:9952:1" rel="noopener">Singapore Press Holdings (SPH SP)</a>'s comments and answers about the SPH REIT Chain Offer may be misleading. </li>
<li>
<a href="https://www.smartkarma.com/entities/china-mengniu-dairy-co" target="_blank" data-smartkarma-citation="entities:354:1" rel="noopener">China Mengniu (2319 HK)</a> is in discussions regarding its holdings in <a href="https://www.smartkarma.com/entities/yashili-international-holdings-ltd" target="_blank" data-smartkarma-citation="entities:3397:1" rel="noopener">Yashili (1230 HK)</a> which may result in a number of "Potential Transactions", and may include a pre-conditional privatisation offer.</li>
<li>
<a href="https://www.smartkarma.com/entities/wh-group-ltd" target="_blank" data-smartkarma-citation="entities:13200:1" rel="noopener">WH Group (288 HK)</a> is two businesses - a US pork processor and a Chinese one - and both businesses are suffering lower margins than they'd like.</li>
</ul>



Singapore Press Holdings (SPH SP)'s comments and answers about the SPH REIT Chain Offer may be misleading. 

China Mengniu (2319 HK) is in discussions regarding its holdings in Yashili (1230 HK) which may result in a number of "Potential Transactions", and may include a pre-conditional privatisation offer.

WH Group (288 HK) is two businesses - a US pork processor and a Chinese one - and both businesses are suffering lower margins than they'd like.


Last Week in Event SPACE: Singapore Press, Yashili, WH Group, Uniti Group, Toshiba, China Conch

Equity Bottom-Up

Shandong Hi-Speed New Energy Group / Equity Bottom-Up

Shandong Hi-Speed New Energy Group (1250 HK)

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<li>
<a href="https://www.smartkarma.com/entities/china-shandong-hi-speed-financial-group-limited" target="_blank" data-smartkarma-citation="entities:10356:1" rel="noopener">China Shandong Hi-Speed Financial Group (412 HK)</a> (CSFG) has entered into a subscription agreement with <a href="https://www.smartkarma.com/entities/beijing-enterprises-clean-energy-grp-ltd" target="_blank" data-smartkarma-citation="entities:6927:1" rel="noopener">Beijing Enterprises Clean Energy Grp (1250 HK)</a> (BECE).</li>
<li>Subscription shares total 43.45% of BECE on a diluted basis. The subscription price is HK$0.096/share, a 7.69% discount to last close</li>
<li>A mandatory takeover would be triggered at completion of this agreement, provided a whitewash waiver is not granted. </li>
</ul>



China Shandong Hi-Speed Financial Group (412 HK) (CSFG) has entered into a subscription agreement with Beijing Enterprises Clean Energy Grp (1250 HK) (BECE).
Subscription shares total 43.45% of BECE on a diluted basis. The subscription price is HK$0.096/share, a 7.69% discount to last close
A mandatory takeover would be triggered at completion of this agreement, provided a whitewash waiver is not granted. 


BE Energy (1250 HK): Not A Take-Out, More A China Shandong Hi-Speed Bail Out

Hong Kong

Beijing Enterprises Water Group is a leading integrated water system solution provider, offering a broad range of water services and environmental protection services. Its core businesses include sewage and reclaimed water treatment, water distribution, and the construction and operation of water and wastewater treatment plants. The company was founded in 1992 and is headquartered in Hong Kong.

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Beijing Enterprises Water Group (371 HK)

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

Last Week in Event SPACE: Singapore Press, Yashili, WH Group, Uniti Group, Toshiba, China Conch

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

BE Energy (1250 HK): Not A Take-Out, More A China Shandong Hi-Speed Bail Out

Shares appear oversold on today's news. Pricing on EV/EBITDA and P/B metrics are undemanding. However, BECE may well drift sideways until it...

David Blennerhassett

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