Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>On the 23 June, the Cheng family made an underwhelming voluntary conditional Offer of $1.88/share for <a href="https://www.smartkarma.com/entities/giordano-international-ltd" target="_blank" data-smartkarma-citation="entities:13899:1" rel="noopener">Giordano International (709 HK)</a>. </li>
<li>The Offer is conditional on the family getting to more than 50% via tendering, and the Cheng's (and concert parties) control 24.57%.  </li>
<li>The Composite Document is now <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2022/0815/2022081500070.pdf" target="_blank" rel="noopener">out</a> with a first close on the 5 September.  The Offer Price has now been declared final. That's a surprise.</li>
</ul>


On the 23 June, the Cheng family made an underwhelming voluntary conditional Offer of $1.88/share for Giordano International (709 HK). 
The Offer is conditional on the family getting to more than 50% via tendering, and the Cheng's (and concert parties) control 24.57%.  
The Composite Document is now out with a first close on the 5 September.  The Offer Price has now been declared final. That's a surprise.


Giordano (709 HK): Offer Doc Out. Terms Declared Final

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.

<ul>
<li>The amended Cayman Islands Act is yet to become law which increases the odds that the headcount test remains for <a href="https://www.smartkarma.com/entities/razer-inc" target="_blank" data-smartkarma-citation="entities:24380:1" rel="noopener">Razer Inc (1337 HK)</a>'s court meeting on 26 April. </li>
<li>Since the despatch of the scheme document, the gross spread has narrowed to 7.6% (last close). Current deal probability implies an 80% chance of success.</li>
<li>The rising deal probability negatively skews the risk/reward profile. We are hesitant to be long this trade into a scheme meeting that is too close to call.</li>
</ul>


The amended Cayman Islands Act is yet to become law which increases the odds that the headcount test remains for Razer Inc (1337 HK)'s court meeting on 26 April. 
Since the despatch of the scheme document, the gross spread has narrowed to 7.6% (last close). Current deal probability implies an 80% chance of success.
The rising deal probability negatively skews the risk/reward profile. We are hesitant to be long this trade into a scheme meeting that is too close to call.


Razer’s Offer Risk/Reward Ahead of the 26 April Scheme Meeting

<ul>
<li>
<a href="https://www.smartkarma.com/entities/razer-inc" target="_blank" data-smartkarma-citation="entities:24380:1" rel="noopener">Razer Inc (1337 HK)</a> has <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2022/0221/2022022100862.pdf" target="_blank" rel="noopener">announced</a> the remaining pre-conditions have now been fulfilled.</li>
<li>The next step is the Scheme vote, which may be held in early May, with possible completion in early June.</li>
<li>Despite SAMR approval last month, this transaction continues to trade wide to terms on concerns retail investors will disrupt the headcount test.</li>
</ul>



Razer Inc (1337 HK) has announced the remaining pre-conditions have now been fulfilled.
The next step is the Scheme vote, which may be held in early May, with possible completion in early June.
Despite SAMR approval last month, this transaction continues to trade wide to terms on concerns retail investors will disrupt the headcount test.


<ul>
<li>China's State Administration for Market Supervision has unconditionally approved <a href="https://www.smartkarma.com/entities/razer-inc" target="_blank" data-smartkarma-citation="entities:24380:1" rel="noopener">Razer Inc (1337 HK)</a>'s privatisation. </li>
<li>Provided all other regulatory approvals are obtained, the key condition to the Scheme completing is the shareholder vote. </li>
<li>Trading wide to terms on concerns retail investors could disrupt the headcount test.</li>
</ul>


China's State Administration for Market Supervision has unconditionally approved Razer Inc (1337 HK)'s privatisation. 
Provided all other regulatory approvals are obtained, the key condition to the Scheme completing is the shareholder vote. 
Trading wide to terms on concerns retail investors could disrupt the headcount test.


Razer Inc (1337 HK): SAMR Done. Now For The Vote

<ul>
<li>The gross spread to the HK$2.82 per share offer has retouched the high of 23%. The headcount test is a key challenge as some minorities voice displeasure over the price.  </li>
<li>Based on the unaffected price of HK$1.81 and at the last close of HK$2.30, the deal probability retouched lows of 48.5%. A 65% deal probability would imply HK$2.47 per share. </li>
<li>In the event of a failed deal, <a href="https://www.smartkarma.com/entities/razer-inc" target="_blank" data-smartkarma-citation="entities:24380:1" rel="noopener">Razer Inc (1337 HK)</a>’s strong fundamentals provide solid valuation support. Our SoTP valuation is HK$2.96 per share, 5% higher than the privatisation price.</li>
</ul>


The gross spread to the HK$2.82 per share offer has retouched the high of 23%. The headcount test is a key challenge as some minorities voice displeasure over the price.  
Based on the unaffected price of HK$1.81 and at the last close of HK$2.30, the deal probability retouched lows of 48.5%. A 65% deal probability would imply HK$2.47 per share. 
In the event of a failed deal, Razer Inc (1337 HK)’s strong fundamentals provide solid valuation support. Our SoTP valuation is HK$2.96 per share, 5% higher than the privatisation price.


Hong Kong

Chinese Estates Holdings Limited, through its subsidiaries, invests in and develops real estate properties.  The Company also invests in securities and provides brokerage and money lending services.

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Chinese Estates Holdings (127 HK)

Giordano (709 HK): Offer Doc Out. Terms Declared Final

The downside is probably limited here. I'd expect shares to trade down today given the terms have been declared final. If you buy here or lower,...

David Blennerhassett

Razer’s Offer Risk/Reward Ahead of the 26 April Scheme Meeting

The amended Cayman Islands Act is yet to become law increasing the odds that the headcount test remains. We are hesitant to be long this trade into...

Arun George

Razer Inc (1337 HK): Pre-Conditions Done

The key concern is that retail investors who bought at the IPO, will disrupt the headcount vote. I'd buy here, and buy up to $2.70/share or 4.4%...

David Blennerhassett

Razer Inc (1337 HK): SAMR Done. Now For The Vote

I think this has been oversold. Your downside to the undisturbed price is 17% versus 29% upside. I'd buy here, and buy up to ~$2.60/share or 8.5%...

David Blennerhassett

Razer's Offer Spread Risk/Reward

The gross spread to the HK$2.82 per share offer has retouched the high of 23%. In the event of a failed deal, the strong fundamentals provide solid...

Arun George

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52-week Range

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Giordano (709 HK): Offer Doc Out. Terms Declared Final

The downside is probably limited here. I'd expect shares to trade down today given the terms have been declared final. If you buy here or lower,...

David Blennerhassett

Razer’s Offer Risk/Reward Ahead of the 26 April Scheme Meeting

The amended Cayman Islands Act is yet to become law increasing the odds that the headcount test remains. We are hesitant to be long this trade into...

Arun George

Razer Inc (1337 HK): Pre-Conditions Done

The key concern is that retail investors who bought at the IPO, will disrupt the headcount vote. I'd buy here, and buy up to $2.70/share or 4.4%...

David Blennerhassett

Razer Inc (1337 HK): SAMR Done. Now For The Vote

I think this has been oversold. Your downside to the undisturbed price is 17% versus 29% upside. I'd buy here, and buy up to ~$2.60/share or 8.5%...

David Blennerhassett

Razer's Offer Spread Risk/​Reward

The gross spread to the HK$2.82 per share offer has retouched the high of 23%. In the event of a failed deal, the strong fundamentals provide solid...

Arun George

Razer's Offer Spread Risk/Reward