Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

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<p>Some 14 months after <a href="http://chinabiologic.investorroom.com/2019-09-18-China-Biologic-Announces-Receipt-of-Preliminary-Non-Binding-Going-Private-Proposal" target="_blank" rel="noopener">announcing</a> the receipt of a preliminary non-binding proposal from Beachhead Holdings, CITIC, <a href="https://www.smartkarma.com/entities/pw-medtech-group-ltd" target="_blank" data-smartkarma-citation="entities:9891:1" rel="noopener">Pw Medtech (1358 HK)</a>,<span id="spanHghlt74d7"> Parfield </span>International, Hillhouse, and V-Sciences Investments for US$120/share, in cash, <a href="https://www.smartkarma.com/entities/china-biologic-products-hold" target="_blank" data-smartkarma-citation="entities:22633:1" rel="noopener">China Biologic Products (CBPO US)</a> entered into a <a href="http://app.quotemedia.com/data/downloadFiling?webmasterId=101533&amp;ref=115451875&amp;type=PDF&amp;symbol=CBPO&amp;companyName=China+Biologic+Products+Holdings+Inc.&amp;formType=6-K&amp;dateFiled=2020-11-19&amp;CK=1369868" target="_blank" rel="noopener">definitive merger agreement</a>, also at US$120/share, on the 19 November last year.</p>
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<p>The merger was conditional on an affirmative vote from shareholders representing at least two-thirds of the shares out, and that the aggregate quantity of dissenting shares being less than 8% of shares out.</p>
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<p>Yesterday shareholders <a href="https://www.sec.gov/Archives/edgar/data/1369868/000110465921029688/tm218258d1_ex99-1.htm" target="_blank" rel="noopener">approved</a> the merger at an EGM. 84.5% of CBPO's outstanding shares attended in person or via proxy at the EGM, and ~92.2% voted in favour of the proposal to authorize and approve the Merger Agreement. This was no surprise - the Buyer Consortium (including PW Medtech) and the Rollover Management Members, beneficially owned ~68.84% of shares out.  </p>
<p>However, CBPO also announced that it "<em>had received notices of objection from certain shareholders that in the aggregate hold more than 8% of the total outstanding shares of the Company</em>".</p>
<p>This deal now looks set to mirror the timeline currently underway for <a href="https://www.smartkarma.com/entities/sina-corp-china" target="_blank" data-smartkarma-citation="entities:22691:1" rel="noopener">Sina Corp (Class A) (SINA US)</a>.</p>
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<p>More below the fold.</p>
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Some 14 months after announcing the receipt of a preliminary non-binding proposal from Beachhead Holdings, CITIC, Pw Medtech (1358 HK), Parfield International, Hillhouse, and V-Sciences Investments for US$120/share, in cash, China Biologic Products (CBPO US) entered into a definitive merger agreement, also at US$120/share, on the 19 November last year.

The merger was conditional on an affirmative vote from shareholders representing at least two-thirds of the shares out, and that the aggregate quantity of dissenting shares being less than 8% of shares out.


Yesterday shareholders approved the merger at an EGM. 84.5% of CBPO's outstanding shares attended in person or via proxy at the EGM, and ~92.2% voted in favour of the proposal to authorize and approve the Merger Agreement. This was no surprise - the Buyer Consortium (including PW Medtech) and the Rollover Management Members, beneficially owned ~68.84% of shares out.  
However, CBPO also announced that it "had received notices of objection from certain shareholders that in the aggregate hold more than 8% of the total outstanding shares of the Company".
This deal now looks set to mirror the timeline currently underway for Sina Corp (Class A) (SINA US).


More below the fold.






Hollysys Automation Technologies / Event-Driven

Hollysys Automation Technologies (HOLI US)

<p><a href="https://www.smartkarma.com/entities/hollysys-automation-technolo" target="_blank" data-smartkarma-citation="entities:26078:1" rel="noopener">Hollysys Automation Technology (HOLI US)</a>, a leading automation control system solutions provider in China, has <a href="https://app.quotemedia.com/data/downloadFiling?webmasterId=101533&amp;ref=115585559&amp;type=PDF&amp;symbol=HOLI&amp;companyName=Hollysys+Automation+Technologies+Ltd.&amp;formType=6-K&amp;dateFiled=2021-02-01&amp;CK=1357450" target="_blank" rel="noopener">announced</a> a consortium including co-founder and former Hollysys CEO Baiqing Shao, Ace Funds, and Chinese PE outfit CPE Funds Management, had bumped its Offer to acquire the company to US$17.10/share. </p>
<p>Back on the <a href="https://app.quotemedia.com/data/downloadFiling?webmasterId=101533&amp;ref=115490363&amp;type=PDF&amp;symbol=HOLI&amp;companyName=Hollysys+Automation+Technologies+Ltd.&amp;formType=6-K&amp;dateFiled=2020-12-10&amp;CK=1357450" target="_blank" rel="noopener">7 December</a>, 2020, the consortium pitched an unsolicited US$15.47/share cash Offer, which was summarily <a href="https://app.quotemedia.com/data/downloadFiling?webmasterId=101533&amp;ref=115541784&amp;type=PDF&amp;symbol=HOLI&amp;companyName=Hollysys+Automation+Technologies+Ltd.&amp;formType=6-K&amp;dateFiled=2021-01-08&amp;CK=1357450" target="_blank" rel="noopener">rejected</a> on the 8 January as the Offer "<em>substantially undervalues the Company and is not in the best interest of the Company’s shareholders .... (and that it) would deprive our shareholders of the value inherent in Hollysys for inadequate consideration</em>."</p>
<p>Given US/China tensions and moves last year to force the delisting of US-listed Chinese companies should they be in noncompliance with US accounting standards, there has been a surge in “take private” transactions for these US-listed companies (often expecting to re-list elsewhere at higher valuations) and secondary listings in markets outside of the United States, such as Hong Kong and Shanghai. This was extensively discussed in <em><a href="https://skr.ma/TDg1T" target="_blank" rel="noopener">Homecoming For Chinese Companies: Appraisal Rights &amp; Fair Value</a></em>.</p>
<p>Hollysys is incorporated in the BVI. This jurisdiction provides four key takeover methods.</p>
<p>Hollysys also has net cash of US$630mn (as at 30 September 2020), accounting for ~71% of its market cap. Dissension rights are available under certain take-private transactions.</p>
<p>As always, more below the fold.</p>

Hollysys Automation Technology (HOLI US), a leading automation control system solutions provider in China, has announced a consortium including co-founder and former Hollysys CEO Baiqing Shao, Ace Funds, and Chinese PE outfit CPE Funds Management, had bumped its Offer to acquire the company to US$17.10/share. 
Back on the 7 December, 2020, the consortium pitched an unsolicited US$15.47/share cash Offer, which was summarily rejected on the 8 January as the Offer "substantially undervalues the Company and is not in the best interest of the Company’s shareholders .... (and that it) would deprive our shareholders of the value inherent in Hollysys for inadequate consideration."
Given US/China tensions and moves last year to force the delisting of US-listed Chinese companies should they be in noncompliance with US accounting standards, there has been a surge in “take private” transactions for these US-listed companies (often expecting to re-list elsewhere at higher valuations) and secondary listings in markets outside of the United States, such as Hong Kong and Shanghai. This was extensively discussed in Homecoming For Chinese Companies: Appraisal Rights &amp; Fair Value.
Hollysys is incorporated in the BVI. This jurisdiction provides four key takeover methods.
Hollysys also has net cash of US$630mn (as at 30 September 2020), accounting for ~71% of its market cap. Dissension rights are available under certain take-private transactions.
As always, more below the fold.

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<p>14 months ago, almost to the day, <a href="https://www.smartkarma.com/entities/china-biologic-products-hold" target="_blank" data-smartkarma-citation="entities:22633:1" rel="noopener">China Biologic Products (CBPO US)</a> <a href="http://chinabiologic.investorroom.com/2019-09-18-China-Biologic-Announces-Receipt-of-Preliminary-Non-Binding-Going-Private-Proposal" target="_blank" rel="noopener">announced</a> the receipt of a preliminary non-binding proposal from Beachhead Holdings, CITIC, PW Medtech<span id="spanHghlt74d7">, Parfield </span>International, Hillhouse, and V-Sciences Investments for US$120/share, in cash.</p>
<p>Yesterday, CBPO entered into a <a href="http://app.quotemedia.com/data/downloadFiling?webmasterId=101533&amp;ref=115451875&amp;type=PDF&amp;symbol=CBPO&amp;companyName=China+Biologic+Products+Holdings+Inc.&amp;formType=6-K&amp;dateFiled=2020-11-19&amp;CK=1369868" target="_blank" rel="noopener">definitive merger agreement</a>, also at US$120/share.</p>
<p>The merger is conditional on an affirmative vote from shareholders representing at least two-thirds of the shares out, and that the aggregate quantity of dissenting shares shall be less than 8% of shares out.</p>
<p>As of the date of merger agreement, members of the Buyer Consortium (including <a href="https://www.smartkarma.com/entities/pw-medtech-group-ltd" target="_blank" data-smartkarma-citation="entities:9891:1" rel="noopener">Pw Medtech (1358 HK)</a>) and the Rollover Management Members, beneficially own shares representing ~68.84% of shares out.</p>
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<p>Done deal. Possible completion late 1Q21, early 2Q1.</p>
<p>More below the fold.</p>
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14 months ago, almost to the day, China Biologic Products (CBPO US) announced the receipt of a preliminary non-binding proposal from Beachhead Holdings, CITIC, PW Medtech, Parfield International, Hillhouse, and V-Sciences Investments for US$120/share, in cash.
Yesterday, CBPO entered into a definitive merger agreement, also at US$120/share.
The merger is conditional on an affirmative vote from shareholders representing at least two-thirds of the shares out, and that the aggregate quantity of dissenting shares shall be less than 8% of shares out.
As of the date of merger agreement, members of the Buyer Consortium (including Pw Medtech (1358 HK)) and the Rollover Management Members, beneficially own shares representing ~68.84% of shares out.

Done deal. Possible completion late 1Q21, early 2Q1.
More below the fold.





China Biologics (CBPO US): Firm Offer Backed By Prerequisite Votes

<p>On the 30 September, <a href="https://www.smartkarma.com/entities/wanda-sports-group-co-ltd" target="_blank" data-smartkarma-citation="entities:28119:1" rel="noopener">Wanda Sports Group (WSG US)</a> announced Dalian Wanda Group (DWG) had submitted a preliminary non-binding <a href="https://investor.wsg.cn/news-releases/news-release-details/wanda-sports-group-company-limited-announces-receipt-preliminary" target="_blank" rel="noopener">proposal</a> at US$2.50/ADS, a 38.9% premium to last close.</p>
<p>DWG currently owns all the Class B ordinary shares of WSG, representing ~71.68% of all the issued shares, and  ~91.01% of the voting power of the Company. </p>
<p>At this juncture, one would assume a "<em>going private transaction</em>" would be done via a short-form merger - therefore there will be no shareholder vote and no dissenting.</p>
<p>But the twist here is that WSG is incorporated in Hong Kong (one of the very few  US-listed Chinese companies incorporated in HK), therefore a take-private transaction <em>must</em> adhere to the law of their jurisdiction of incorporation. That raises the bar on DWG taking WSG private.</p>
<p>As always, more below the fold.</p>

On the 30 September, Wanda Sports Group (WSG US) announced Dalian Wanda Group (DWG) had submitted a preliminary non-binding proposal at US$2.50/ADS, a 38.9% premium to last close.
DWG currently owns all the Class B ordinary shares of WSG, representing ~71.68% of all the issued shares, and  ~91.01% of the voting power of the Company. 
At this juncture, one would assume a "going private transaction" would be done via a short-form merger - therefore there will be no shareholder vote and no dissenting.
But the twist here is that WSG is incorporated in Hong Kong (one of the very few  US-listed Chinese companies incorporated in HK), therefore a take-private transaction must adhere to the law of their jurisdiction of incorporation. That raises the bar on DWG taking WSG private.
As always, more below the fold.

Wanda Sports (WSG US): Preliminary Proposal From Dalian Wanda

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<p>HR solutions provider <a href="https://www.smartkarma.com/entities/51-job-inc-adr" target="_blank" data-smartkarma-citation="entities:532:1" rel="noopener">51 Job Inc Adr (JOBS US)</a> has announced it has received a preliminary non-binding <a href="https://sec.report/Document/0001104659-20-105912/" target="_blank" rel="noopener">Proposal</a> from DCP Capital Partners to acquire all of its shares for US$79.05/common share.</p>
<p>The Proposal represents a premium of 18.82% to 51job's 30-day VWAP, and a premium of 16.05% to 51job's last close.</p>
<p>DCP Capital? It is an international private equity firm in Asia, where the team previously led KKR and Morgan Stanley’s private equity businesses in Asia.</p>
<p>This Offer makes a change from the usual management buyouts in which the Offer consideration often finds minority shareholders left wanting.</p>
<p>However, pricing appears opportunistic after 51job was down 20% YTD, ahead of the Offer. Currently, trading through terms at US$79.42.</p>
<p>There are no super-voting rights in 51job. Directors hold 22.8% of shares including Rick Yau (co-founder, CEO) with 19.2%. The major shareholder is <a href="https://www.smartkarma.com/entities/recruit-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:15070:1" rel="noopener">Recruit Holdings (6098 JP)</a> with 35%.</p>
<p>As always, more below the fold.</p>
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HR solutions provider 51 Job Inc Adr (JOBS US) has announced it has received a preliminary non-binding Proposal from DCP Capital Partners to acquire all of its shares for US$79.05/common share.
The Proposal represents a premium of 18.82% to 51job's 30-day VWAP, and a premium of 16.05% to 51job's last close.
DCP Capital? It is an international private equity firm in Asia, where the team previously led KKR and Morgan Stanley’s private equity businesses in Asia.
This Offer makes a change from the usual management buyouts in which the Offer consideration often finds minority shareholders left wanting.
However, pricing appears opportunistic after 51job was down 20% YTD, ahead of the Offer. Currently, trading through terms at US$79.42.
There are no super-voting rights in 51job. Directors hold 22.8% of shares including Rick Yau (co-founder, CEO) with 19.2%. The major shareholder is Recruit Holdings (6098 JP) with 35%.
As always, more below the fold.





You're Hired! DCP's Proposal For 51job.Inc.

United States

China Biologic Products Holdings, Inc. operates as a biopharmaceutical company. The Company researches, develops, and produces human plasma-based pharmaceutical and coagulation factor products in the form of tablets, injections, capsules, and syrups. China Biologic Products also distributes pharmaceutical products. China Biologic Products serves clients in China.

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China Biologic Products (CBPO US)

CBPO's Vote Gets Up But Dissenters Lurk

Currently trading at a gross/annualsed spread of 1.5%/7.5%. This assumes payment mid-May if assuming the negotiation process drags out to its full...

David Blennerhassett

Hollysys (HOLI US): Machine Earning

The short turnaround from the consortium in bumping its Offer provides a certain degree of determination. At $17.10/share, this is still being done...

David Blennerhassett

China Biologics (CBPO US): Firm Offer Backed By Prerequisite Votes

Trading at a gross/annualised spread at 4.4%/11.7%. This looks like a pretty clean deal for around four-five months of work.

David Blennerhassett

Wanda Sports (WSG US): Preliminary Proposal From Dalian Wanda

Preliminary Non-Binding Proposal at US$2.50/ADS. The Offeror has 91.01% of the voting power. If a firm Offer is tabled, this will be done via a...

David Blennerhassett

You're Hired! DCP's Proposal For 51job.Inc.

Sina Corp (Class A) (SINA US) looks sets to join the growing list of Chinese companies seeking to delist in the US and relist, ostensibly in Hong...

David Blennerhassett

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