David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<p>In recent years,  it has become common practice for Chinese "tech" companies listed in the US to be privatised, on the expectation of being relisted on the Mainland (where often higher multiples are assigned) or Hong Kong. Following the passing of the <a href="https://en.wikipedia.org/wiki/Holding_Foreign_Companies_Accountable_Act" target="_blank" rel="noopener">Holding Foreign Companies Accountable Act</a> last year, there is an added impetus to take these companies private. Or at the very least, seek a dual listing in Hong Kong.</p>
<p>More often than not, these takeovers are initiated by the controlling shareholders. Which makes this latest non-binding proposal for <a href="https://www.smartkarma.com/entities/iclick-interactive-asia-group-limited" target="_blank" data-smartkarma-citation="entities:27314:1" rel="noopener">iClick Interactive Asia Group (ICLK US)</a> a little unusual.</p>
<p>iClick <a href="https://ir.i-click.com/2021-09-24-iClick-Interactive-Asia-Group-Limited-Announces-Receipt-of-a-Preliminary-Non-Binding-Indicative-Proposal-to-Acquire-the-Company" target="_blank" rel="noopener">announced</a> on the 24 September it had received a preliminary indicative proposal from PAG Pegasus Fund and Oasis Management to acquire all of its outstanding shares for US$6.75 per ADS, in cash.</p>
<p>That's a 19% premium to last close, yet 63% below its all-time high close of US$18.30 in February last year, and 16% below its $8/share IPO price in December 2018.</p>
<p>Should a firm Offer unfold, this long-form merger would require two-thirds majority approval from all shareholders.</p>
<p>Sammy Hsieh, the chairman of the board of directors and co-founder, Jian Tang, iClick's CEO, and co-founder, collectively own 4,385,078 Class B ordinary shares, which due to their super-voting rights, is equivalent to ~62% of the voting power. This proposal is a non-starter without the support of either Hsieh or Tang.</p>
<p>In addition, <a href="https://www.smartkarma.com/entities/baozun" target="_blank" data-smartkarma-citation="entities:29712:1" rel="noopener">Baozun (9991 HK)</a> controls a further 10% of the voting power. Should all three side with the buyer consortium, this deal is done. </p>
<p>But I doubt this will be the outcome. A more likely scenario is the consortium's low-balled Offer is a means to triggering a response from a key player, such as <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a>, to make a counteroffer.</p>
<p>More below the fold.</p>

<p>Back on the 10 February 2021, private hospitals and medical centers operator <a href="https://www.smartkarma.com/entities/new-frontier-health-corp" target="_blank" data-smartkarma-citation="entities:28429:1" rel="noopener">New Frontier Corporation (NFH US)</a> made an <a href="https://d18rn0p25nwr6d.cloudfront.net/CIK-0001737422/16f0d15b-2a3a-4ad0-9ad3-85d84f2c7485.pdf" target="_blank" rel="noopener">announcement</a> it had received a preliminary non-proposal binding letter from a buyer-group, including President Carl Wu, Carnival Investments, Vivo Capital Fund IX, Max Rising International Ltd (a company affiliated with Carl Wu) - among others.</p>
<p>The group offered to acquire shares of New Frontier for $12 in cash, a 27.9% premium to last close.</p>
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<p>New Frontier has now entered into a <a href="https://d18rn0p25nwr6d.cloudfront.net/CIK-0001737422/4394dbb2-ca20-48cd-9bf2-2c1f323694a6.pdf" target="_blank" rel="noopener">definitive merger agreement</a>, also at US$12/share.</p>
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<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 10% of shares out.</p>
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<p>The announcement is silent on the buyer consortium's % holding, but I estimate it to be at least 37%.</p>
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<p>This looks pretty clean. Possible completion late 4Q21.</p>
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<p>More below the fold.</p>
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Xinyao (Criss) Wang

HK/China Healthcare Analyst (ex-Fosun Pharma)

Thematic (Sector/Industry)

<p><strong>Industry viewpoints:</strong></p><ul>
<li>Considering the importance of blood products, the 14th Five-Year Plan will accelerate the construction of plasma stations in China so as to achieve the self-sufficiency in blood products.</li>
<li>Public health is the focus of the 14th Five-Year Plan for medical reform. Among them, due to the strong demand from the downstream, the medical IT industry is expected to usher in a faster development.</li>
<li>The outbreak of COVID-19 in 2020 would accelerate Chinese consumers' awareness and attention of immunonutrition products, such as the probiotics products.</li>
</ul><p><strong>Company news:</strong></p><p style="text-align: start;">News about the updated progress on drugs and new cooperation agreements of <a href="https://www.smartkarma.com/entities/innovent-biologics-inc" target="_blank" data-smartkarma-citation="entities:27452:1" rel="noopener">Innovent Biologics Inc (1801 HK)</a>, <a href="https://www.smartkarma.com/entities/jiangsu-hengrui-medicine-co-ltd" target="_blank" data-smartkarma-citation="entities:14128:1" rel="noopener">Jiangsu Hengrui Medicine (600276 CH)</a>, <a href="https://www.smartkarma.com/entities/innocare-pharma-ltd" target="_blank" data-smartkarma-citation="entities:28355:1" rel="noopener">InnoCare Pharma Ltd (9969 HK) </a>and <a href="https://www.smartkarma.com/entities/remegen-co-ltd" target="_blank" data-smartkarma-citation="entities:29191:1" rel="noopener">Remegen Co Ltd (9995 HK)</a>.</p><p><strong>Market review:</strong></p><p style="text-align: start;">Last week, stock price for healthcare sector in A share increased 2.61%, while CSI 300 increased 0.50% over the same period of time</p><p style="text-align: start;"><strong>Risk disclosure:</strong></p><p style="text-align: start;">Policy risk, R&amp;D risk, Company risk and COVID-19 risk.</p>

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<p>Nine months after IR 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> first announced it had 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, 51job <a href="https://sec.report/Document/0001193125-21-195283/" target="_blank" rel="noopener">announced</a> yesterday it has entered into a definitive privatisation agreement. </p>
<p>The price remains unchanged, which is also in keeping with the non-binding proposal <a href="https://ir.51job.com/ir/php/2021/PreRelease20210504.php?0504" target="_blank" rel="noopener">announced</a> on the 4 May, wherein Ocean Link and CEO Rick Yan joined DCP in the consortium to take the company private.</p>
<p>The big news is that <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>, 51job's largest shareholder with 34.8%, has now joined the consortium. </p>
<p>The merger requires the approval of two-thirds of all shareholders at an EGM, and the consortium has 54.9% in the bag. </p>
<p>This deal is by no means a sure thing. But even if the EGM resolution passes, minorities are afforded dissension rights. And as recently seen in the recent privatisations of <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> and <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>, shareholders have taken up that cause. </p>
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<p>More below the fold.</p>
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<p>Back on the 17 September 2020, IR 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> announced it had 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, a premium of 18.82% to 51job's 30-day VWAP, and a premium of 16.05% to 51job's last close.</p>
<p>The company <a href="https://ir.51job.com/ir/php/2020/PreReleaseq09212020.php" target="_blank" rel="noopener">formed</a> a special committee on the 21 September to evaluate the proposal and an independent financial advisor was appointed on the <a href="https://ir.51job.com/ir/php/2020/PreReleaseq09302020.php" target="_blank" rel="noopener">30 September</a>.</p>
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<p>Then crickets. Not even a mention in its <a href="https://ir.51job.com/ir/doc/2021/2020Form20FEDGARFINAL20210423.pdf" target="_blank" rel="noopener">2020 annual report</a> on the 23 April this year. One would have thought given the material nature of this proposal warranted at least a one-liner.</p>
<p>I reached out to the IR for clarification and was told:</p>
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<p>The evaluation is ongoing. When there is an update or development, a public press release will be issued.</p>
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<h3>The New News</h3>
<p>51job <a href="https://ir.51job.com/ir/php/2021/PreRelease20210504.php?0504" target="_blank" rel="noopener">announced</a> yesterday an updated non-binding proposal which sees Ocean Link and CEO Rick Yan joining DCP in the consortium to take the company private. The Offer price of US$79.05/common share remains the same.</p>
<p>More below the fold.</p>
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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)

IClick(ICLK US): PAG & Oasis Shake The Trees

Buying around here is probably going to have limited downside. I think PAG/Oasis' intent is to shake out potential suitors - including the co...

David Blennerhassett

New Frontier (NYSE: NFH): Healthcare Homecoming

I see the gross/annualised spread at 7.4%/19.8%, assuming late December completion. This looks like a pretty clean deal for around five months of...

David Blennerhassett

China Healthcare Weekly (July.16)

The article mainly analyzed China's plan to accelerate the construction of plasma stations, promising outlook of medical IT industry...

Xinyao (Criss) Wang

51job’s Privatisation: Firm Offer Is Still The Wrong Price

I'd buy here. Given recent Cayman petitions, I would expect this pushback on pricing to continue here, which may avail smaller investors the...

David Blennerhassett

51job's Buyout: Offer Price Unchanged In Updated Proposal

Trading at a gross spread of 15.9%. With a seasoned player such as Ocean Link now in the mix, plus the CEO, a definitive agreement looks more...

David Blennerhassett

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