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

<ul>
<li>The precondition for the PAG privatisation offer for <a href="https://www.smartkarma.com/entities/shandong-fengxiang-co-ltd-h" target="_blank" data-smartkarma-citation="entities:29164:1" rel="noopener">Shandong Fengxiang (9977 HK)</a> is satisfied. The composite document will be despatched by 11 July. </li>
<li>Despite being a 39.9% discount to the IPO price, the offer is attractive compared to precedent transactions and peer multiples. </li>
<li>The scheme vote remains low-risk due to the irrevocables, the lack of protest votes at the recent AGM, and the signalling from PAG’s decision not to introduce a scrip offer. </li>
</ul>


The precondition for the PAG privatisation offer for Shandong Fengxiang (9977 HK) is satisfied. The composite document will be despatched by 11 July. 
Despite being a 39.9% discount to the IPO price, the offer is attractive compared to precedent transactions and peer multiples. 
The scheme vote remains low-risk due to the irrevocables, the lack of protest votes at the recent AGM, and the signalling from PAG’s decision not to introduce a scrip offer. 


Fengxiang (9977 HK): Precondition Satisfied

<ul>
<li>PAG has decided not to introduce the share alternative offer. Therefore, its offer for <a href="https://www.smartkarma.com/entities/shandong-fengxiang-co-ltd-h" target="_blank" data-smartkarma-citation="entities:29164:1" rel="noopener">Shandong Fengxiang (9977 HK)</a> will be all-cash at HK$2.00 per H share.</li>
<li>The recent Goldlion and Soundwill deal breaks have undoubtedly increased the vote risk, particularly as the blocking stake is below the HKEx substantial shareholder disclosure threshold. </li>
<li>The decision not to introduce the share alternative offer underscores PAG's confidence in the vote. The lack of protest votes at the recent AGM is helpful for the scheme vote. </li>
</ul>


PAG has decided not to introduce the share alternative offer. Therefore, its offer for Shandong Fengxiang (9977 HK) will be all-cash at HK$2.00 per H share.
The recent Goldlion and Soundwill deal breaks have undoubtedly increased the vote risk, particularly as the blocking stake is below the HKEx substantial shareholder disclosure threshold. 
The decision not to introduce the share alternative offer underscores PAG's confidence in the vote. The lack of protest votes at the recent AGM is helpful for the scheme vote. 


Fengxiang (9977 HK): No Share Alternative Offer

<ul>
<li>
<a href="https://www.smartkarma.com/entities/shandong-fengxiang-co-ltd-h" target="_blank" data-smartkarma-citation="entities:29164:1" rel="noopener">Shandong Fengxiang (9977 HK)</a> has disclosed a preconditional privatisation offer from PAG, the controlling shareholder, at HK$2.00 per H share, a 33.3% premium to the undisturbed price.  </li>
<li>The precondition relates to regulatory approvals. The key conditions for the privatisation will be approval by at least 75% independent H Shareholders (&lt;10% of all independent H Shareholders rejection). </li>
<li>The shareholders with blocking stakes which have not provided irrevocables will likely be supportive as the offer is reasonable and there is a potential scrip alternative. </li>
</ul>



Shandong Fengxiang (9977 HK) has disclosed a preconditional privatisation offer from PAG, the controlling shareholder, at HK$2.00 per H share, a 33.3% premium to the undisturbed price.  
The precondition relates to regulatory approvals. The key conditions for the privatisation will be approval by at least 75% independent H Shareholders (&lt;10% of all independent H Shareholders rejection). 
The shareholders with blocking stakes which have not provided irrevocables will likely be supportive as the offer is reasonable and there is a potential scrip alternative. 


Fengxiang (9977 HK): PAG’s Preconditional Privatisation Offer at HK$2.00

<ul>
<li>
<a href="https://www.smartkarma.com/entities/shandong-fengxiang-co-ltd-h" target="_blank" data-smartkarma-citation="entities:29164:1" rel="noopener">Shandong Fengxiang (9977 HK)</a> entered a trading halt “<em>pending the release of an announcement pursuant to the Code on Takeovers and Mergers.</em>” PAG, the controlling shareholder, likely aims to privatise Fengxiang. </li>
<li>The offer will likely be structured as a privatisation by merger by absorption requiring approval by at least 75% of independent H Shareholders (&lt;10% of all independent H Shareholders rejection). </li>
<li>The presence of several substantial shareholders necessitates a reasonable offer. An offer of HK$1.80-2.00 (a 21%—33% premium to the last close) could win over these shareholders' backing.</li>
</ul>



Shandong Fengxiang (9977 HK) entered a trading halt “pending the release of an announcement pursuant to the Code on Takeovers and Mergers.” PAG, the controlling shareholder, likely aims to privatise Fengxiang. 
The offer will likely be structured as a privatisation by merger by absorption requiring approval by at least 75% of independent H Shareholders (&lt;10% of all independent H Shareholders rejection). 
The presence of several substantial shareholders necessitates a reasonable offer. An offer of HK$1.80-2.00 (a 21%—33% premium to the last close) could win over these shareholders' backing.


Fengxiang (9977 HK): Privatisation by PAG?

<ul>
<li>
<a href="https://www.smartkarma.com/entities/japfa-ltd" target="_blank" data-smartkarma-citation="entities:15597:1" rel="noopener">Japfa Ltd (JAP SP)</a> disclosed privatisation through a scheme of arrangement from the Santosa family at S$0.62 per share, a 34.8% premium, to the undisturbed price of S$0.460.</li>
<li>While the offer is attractive compared to historical share price ranges, it is light compared to peer and historical multiples.</li>
<li>The offer has not been declared final. However, the irrevocable, the lack of a disinterested shareholder holding a blocking stake and moderate retail ownership minimises the vote risk.  </li>
</ul>



Japfa Ltd (JAP SP) disclosed privatisation through a scheme of arrangement from the Santosa family at S$0.62 per share, a 34.8% premium, to the undisturbed price of S$0.460.
While the offer is attractive compared to historical share price ranges, it is light compared to peer and historical multiples.
The offer has not been declared final. However, the irrevocable, the lack of a disinterested shareholder holding a blocking stake and moderate retail ownership minimises the vote risk.  


Japfa (JAP SP): Santosa Family’s S$0.62 Scheme Offer

Indonesia

PT Charoen Pokphand Indonesia Tbk manufactures and distributes animal feeds, woven plastic bags, and poultry equipment as well as processes chicken.  Through its subsidiaries, the Company also operates poultry farms and distributes its products.

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Charoen Pokphand Indonesia (CPIN IJ)

Fengxiang (9977 HK): Precondition Satisfied

The composite document is out. The IFA opines that PAG’s offer (HK$2.00 per H share) is fair and reasonable. The vote is on 24 July. At the last...

Arun George

Fengxiang (9977 HK): PAG’s Preconditional Privatisation Offer at HK$2.00

The shareholders with blocking stakes which have not provided irrevocables will likely be supportive as the offer is reasonable and there is a...

Arun George

Fengxiang (9977 HK): Privatisation by PAG?

The presence of several substantial shareholders necessitates a reasonable offer. An offer of HK$1.80-2.00 (a 21%—33% premium to the last close)...

Arun George

Japfa (JAP SP): Santosa Family’s S$0.62 Scheme Offer

The offer is arguably light. However, the irrevocable, the lack of a disinterested shareholder holding a blocking stake and moderate retail...

Arun George

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Fengxiang (9977 HK): Precondition Satisfied

The composite document is out. The IFA opines that PAG’s offer (HK$2.00 per H share) is fair and reasonable. The vote is on 24 July. At the last...

Arun George

Fengxiang (9977 HK): No Share Alternative Offer

The decision not to introduce the share alternative offer underscores PAG's confidence in the vote. For an end-of-Nov payment, the gross/annualised...

Arun George

Fengxiang (9977 HK): PAG’s Preconditional Privatisation Offer at HK$2.00

The shareholders with blocking stakes which have not provided irrevocables will likely be supportive as the offer is reasonable and there is a...

Arun George

Fengxiang (9977 HK): Privatisation by PAG?

The presence of several substantial shareholders necessitates a reasonable offer. An offer of HK$1.80-2.00 (a 21%—33% premium to the last close)...

Arun George

Japfa (JAP SP): Santosa Family’s S$0.62 Scheme Offer

The offer is arguably light. However, the irrevocable, the lack of a disinterested shareholder holding a blocking stake and moderate retail...

Arun George