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/crown-resorts-ltd" target="_blank" data-smartkarma-citation="entities:808:1" rel="noopener">Crown Resorts (CWN AU)</a> has entered a scheme implementation deed with <a href="https://www.smartkarma.com/entities/blackstone-group-inc" target="_blank" data-smartkarma-citation="entities:27166:1" rel="noopener">Blackstone Group (BX US)</a> at A$13.10 cash per share, a 32.3% premium to the unaffected price of A$9.90.</li>
<li>The key conditions precedent is Crown shareholder, gaming regulatory and FIRB approval. The scheme meeting is targeted to be held before the end of June 2022.   </li>
<li>The offer price is attractive and the largest shareholder will be supportive. At last close, the gross and annualised spread is 3.6% and 10.0%, respectively, to a June scheme meeting.   </li>
</ul>



Crown Resorts (CWN AU) has entered a scheme implementation deed with Blackstone Group (BX US) at A$13.10 cash per share, a 32.3% premium to the unaffected price of A$9.90.
The key conditions precedent is Crown shareholder, gaming regulatory and FIRB approval. The scheme meeting is targeted to be held before the end of June 2022.   
The offer price is attractive and the largest shareholder will be supportive. At last close, the gross and annualised spread is 3.6% and 10.0%, respectively, to a June scheme meeting.   


Crown Resorts Enters a SID with Blackstone

<ul>
<li>
<a href="https://www.smartkarma.com/entities/blackstone-group-inc" target="_blank" data-smartkarma-citation="entities:27166:1" rel="noopener">Blackstone Group (BX US)</a> has returned for a fourth time with a revised indicative offer of A$13.10 cash per share, a 4.8% bump to its previous offer of A$12.50.</li>
<li>The Board intends to recommend a binding offer of no less than A$13.10 per share. CPH, the largest shareholder, is “encouraged by today’s announcement.”</li>
<li>The Board’s willingness to recommend a binding offer may draw out rival suitors. At the last close of A$12.65, the shares trade at a 3.6% gross spread to the offer.</li>
</ul>



Blackstone Group (BX US) has returned for a fourth time with a revised indicative offer of A$13.10 cash per share, a 4.8% bump to its previous offer of A$12.50.
The Board intends to recommend a binding offer of no less than A$13.10 per share. CPH, the largest shareholder, is “encouraged by today’s announcement.”
The Board’s willingness to recommend a binding offer may draw out rival suitors. At the last close of A$12.65, the shares trade at a 3.6% gross spread to the offer.


Blackstone’s Fourth Bid for Crown Resorts

Global Gaming and Casinos Industry Specialist, Casino Business Review LLC

Howard J Klein

Global Gaming and Casinos Industry Specialist

Casino Business Review LLC

Extensive experience in marketing and development in the Asian gaming market

Global Gaming and Casinos Industry

Equity Bottom-Up

<ul>
<li>The yet to open for gaming Sydney property stalled gaming floor now appears headed for early 2022 opening estimated by management. Regulators move closer to pronounce suitability.</li>
<li>The Melbourne property will be given green light to operate under a government designated special manager for a 2 year term. Assuming strong compliance, he then will leave.</li>
<li>Private equity giant Blackstone Group has upped offer three times without success thus far. But Crown has authorized non-exclusive access to it and others to due diligence data.</li>
</ul>


The yet to open for gaming Sydney property stalled gaming floor now appears headed for early 2022 opening estimated by management. Regulators move closer to pronounce suitability.
The Melbourne property will be given green light to operate under a government designated special manager for a 2 year term. Assuming strong compliance, he then will leave.
Private equity giant Blackstone Group has upped offer three times without success thus far. But Crown has authorized non-exclusive access to it and others to due diligence data.


Crown Resorts: Moving Closer to Emerge from Siloed Trading Range as Regulatory Ills Begin to Resolve

<ul>
<li>
<a href="https://www.smartkarma.com/entities/blackstone-group-inc" target="_blank" data-smartkarma-citation="entities:27166:1" rel="noopener">Blackstone Group (BX US)</a> has returned for a third time with a A$12.50 cash per share offer, a marginal 1.2% bump to its last offer of A$12.35 on 10 May.</li>
<li>
<a href="https://www.smartkarma.com/entities/crown-resorts-ltd" target="_blank" data-smartkarma-citation="entities:808:1" rel="noopener">Crown Resorts (CWN AU)</a> is at the start of a difficult reform agenda it needs to fulfil to maintain its gaming licenses. Nevertheless, Blackstone’s ongoing interest suggest inherent value.</li>
<li>Blackstone’s bid retains leeway for a bump and may draw out previous suitors. At the last close of A$11.54, the shares trade at an 8.3% gross spread to the offer.</li>
</ul>



Blackstone Group (BX US) has returned for a third time with a A$12.50 cash per share offer, a marginal 1.2% bump to its last offer of A$12.35 on 10 May.

Crown Resorts (CWN AU) is at the start of a difficult reform agenda it needs to fulfil to maintain its gaming licenses. Nevertheless, Blackstone’s ongoing interest suggest inherent value.
Blackstone’s bid retains leeway for a bump and may draw out previous suitors. At the last close of A$11.54, the shares trade at an 8.3% gross spread to the offer.


Blackstone Third-Time Lucky with Crown Resorts Bid?

<a href="https://www.smartkarma.com/entities/soho-china-ltd" target="_blank" data-smartkarma-citation="entities:4123:1" rel="noopener">Soho China Ltd (410 HK)</a> is a real estate company controlled by power couple Pan Shiyi and Zhang Xin. On Friday after market close, SOHO China announced that <a href="https://www.smartkarma.com/entities/blackstone-group-inc" target="_blank" data-smartkarma-citation="entities:27166:1" rel="noopener">Blackstone Group (BX US)</a> has withdrawn its pre-conditional voluntary conditional cash offer of HK$5.00 per share. The key pre-condition was SAMR anti-trust approval. On 2 August, the SOHO China/Blackstone case was accepted for SAMR review by normal procedure rather than a simplified procedure which can take 180 days. On 6 September, SOHO China noted that Blackstone has provided further documents in response to the SAMR’s requests for additional information. Blackstone had received further requests to provide additional information by SAMR and the statement noted that it remains uncertain when the review process will be completed. We previously argued in <a href="https://www.smartkarma.com/insights/soho-china-s-spread-risk-reward-update" target="_blank" data-smartkarma-citation="insights:56578" rel="noopener">SOHO China's Spread Risk/Reward Update</a> that SAMR approval should be forthcoming due to Blackstone’s prior experience in securing SAMR approval for real estate deals, SOHO China will continue to be listed and the deal will not lead to a material increase in market concentration. Four days later 10 September, Blackstone and Pan Shiyi mutually agreed to terminate the offer as they concluded that the pre-condition (SAMR antitrust approval) will be unlikely to be satisfied on or before the Long Stop date (31 December 2021). Revealingly, the parties also agreed that there will be no extension to the Long Stop date suggesting that recent interactions with SAMR had headed downhill.  We think that Blackstone decided to walk away as it was unwilling to expend all its political goodwill to complete a single transaction. The transaction had caused disquiet in China with several Chinese press and social media posts urging SAMR to block the transaction due to the premise that the deal is unpatriotic for reasons highlighted in <a href="https://www.smartkarma.com/insights/soho-china-s-spread-risk-reward-update" target="_blank" data-smartkarma-citation="insights:56578" rel="noopener">SOHO China's Spread Risk/Reward Update</a>. While we previously argued that the rationale presented in these articles for blocking the deal is poor, a SAMR antitrust approval would also not sit well with President Xi Jinping’s recent calls for wealth redistribution.On the other hand, Pan Shiyi is stuck between a rock and a hard place. The publicity from the pulled transaction means that potential buyers will stay away in the short term. When the dust settles, Pan Shiyi can pursue selling individual assets or sell his stake to a domestic private equity bidder or real estate firm. Long-term, we see a limited rationale for SOHO China to remain publicly listed.   <div class="content-highlight">With the offer terminated, the immediate focus turns to the extent of the share price drop on Monday. Our analysis suggests that the share price could fall between HK$2.45-3.25 per share range. At the last close price of HK$3.50 per share, our share price range represents a decline of -30% to -7%. </div>

Soho China Ltd (410 HK) is a real estate company controlled by power couple Pan Shiyi and Zhang Xin. On Friday after market close, SOHO China announced that Blackstone Group (BX US) has withdrawn its pre-conditional voluntary conditional cash offer of HK$5.00 per share. The key pre-condition was SAMR anti-trust approval. On 2 August, the SOHO China/Blackstone case was accepted for SAMR review by normal procedure rather than a simplified procedure which can take 180 days. On 6 September, SOHO China noted that Blackstone has provided further documents in response to the SAMR’s requests for additional information. Blackstone had received further requests to provide additional information by SAMR and the statement noted that it remains uncertain when the review process will be completed. We previously argued in SOHO China's Spread Risk/Reward Update that SAMR approval should be forthcoming due to Blackstone’s prior experience in securing SAMR approval for real estate deals, SOHO China will continue to be listed and the deal will not lead to a material increase in market concentration. Four days later 10 September, Blackstone and Pan Shiyi mutually agreed to terminate the offer as they concluded that the pre-condition (SAMR antitrust approval) will be unlikely to be satisfied on or before the Long Stop date (31 December 2021). Revealingly, the parties also agreed that there will be no extension to the Long Stop date suggesting that recent interactions with SAMR had headed downhill.  We think that Blackstone decided to walk away as it was unwilling to expend all its political goodwill to complete a single transaction. The transaction had caused disquiet in China with several Chinese press and social media posts urging SAMR to block the transaction due to the premise that the deal is unpatriotic for reasons highlighted in SOHO China's Spread Risk/Reward Update. While we previously argued that the rationale presented in these articles for blocking the deal is poor, a SAMR antitrust approval would also not sit well with President Xi Jinping’s recent calls for wealth redistribution.On the other hand, Pan Shiyi is stuck between a rock and a hard place. The publicity from the pulled transaction means that potential buyers will stay away in the short term. When the dust settles, Pan Shiyi can pursue selling individual assets or sell his stake to a domestic private equity bidder or real estate firm. Long-term, we see a limited rationale for SOHO China to remain publicly listed.   With the offer terminated, the immediate focus turns to the extent of the share price drop on Monday. Our analysis suggests that the share price could fall between HK$2.45-3.25 per share range. At the last close price of HK$3.50 per share, our share price range represents a decline of -30% to -7%. 

United States

Blackstone Inc. operates as an investment company. The Company focuses on real estate, hedge funds, private equity, leveraged lending, senior debts, and rescue financing. Blackstone serves customers worldwide.

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Blackstone (BX US)

Crown Resorts Enters a SID with Blackstone

Crown Resorts has entered a SID with Blackstone at A$13.10 cash per share. The offer price is attractive and presents the largest shareholder...

Arun George

Blackstone’s Fourth Bid for Crown Resorts

Blackstone has returned for a fourth time with a revised indicative offer of A$13.10 cash per share. The Board’s willingness to recommend a binding...

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Crown Resorts: Moving Closer to Emerge from Siloed Trading Range as Regulatory Ills Begin to Resolve

Regulatory bans related to CWN prior practices which official reports brought down an unsuitability judgment on the company licensure, are...

Howard J Klein

Blackstone Third-Time Lucky with Crown Resorts Bid?

Blackstone’s new A$12.50 cash per share bid retains leeway for a bump and may draw out previous suitors. At the last close of A$11.54 per share,...

Arun George

SOHO China: Blackstone Walks Away

With the offer terminated, the immediate focus turns to the extent of the share price drop on Monday. Our analysis suggests that the share price...

Arun George

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