Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Since announcing <a href="https://www.smartkarma.com/entities/hsbc-holdings-plc" target="_blank" data-smartkarma-citation="entities:516:1" rel="noopener">HSBC (5 HK)</a>'s Offer, <a href="https://www.smartkarma.com/entities/hang-seng-bank-ltd" target="_blank" data-smartkarma-citation="entities:24:1" rel="noopener">Hang Seng Bank (11 HK)</a> has traded tight-ish to terms, at a ~3.9% gross spread (including dividends). Or ~10% annualised if a five month offramp.</li>
<li>Annualised spreads for clean liquid deals in Asia-Pac, do tend to widen after day 1. Meaning, the gross spread remains roughly static as investors hit their full quota early on.  </li>
<li>HSBC shareholders are questioning the deal merits. For Hang Seng minorities, this is a great exit. Inside this report, I take a deeper dive into Hong Kong bank takeover precedents.
</li>
</ul>


Since announcing HSBC (5 HK)'s Offer, Hang Seng Bank (11 HK) has traded tight-ish to terms, at a ~3.9% gross spread (including dividends). Or ~10% annualised if a five month offramp.
Annualised spreads for clean liquid deals in Asia-Pac, do tend to widen after day 1. Meaning, the gross spread remains roughly static as investors hit their full quota early on.  
HSBC shareholders are questioning the deal merits. For Hang Seng minorities, this is a great exit. Inside this report, I take a deeper dive into Hong Kong bank takeover precedents.



Hang Seng (11 HK)'s Offer: HSBC Investors Are Not Sold On The Strategic Benefits

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hang-seng-bank-ltd" target="_blank" data-smartkarma-citation="entities:24:1" rel="noopener">Hang Seng Bank (11 HK)</a> has announced an Offer from controlling parent (63.3551%), <a href="https://www.smartkarma.com/entities/hsbc-holdings-plc" target="_blank" data-smartkarma-citation="entities:516:1" rel="noopener">HSBC Holdings (5 HK)</a>, by way of a Scheme, in a HK$106bn (US$13.6bn) deal. </li>
<li>The Scheme Consideration is HK$155/share, a 30.3% premium to last close. The price is final. A "third interim dividend" will be added. Optically, the price is bang on.</li>
<li>The long stop for conditions is the 30th September 2026. I think this transaction can be wrapped up in around five months. </li>
</ul>



Hang Seng Bank (11 HK) has announced an Offer from controlling parent (63.3551%), HSBC Holdings (5 HK), by way of a Scheme, in a HK$106bn (US$13.6bn) deal. 
The Scheme Consideration is HK$155/share, a 30.3% premium to last close. The price is final. A "third interim dividend" will be added. Optically, the price is bang on.
The long stop for conditions is the 30th September 2026. I think this transaction can be wrapped up in around five months. 


HSBC (5 HK)'s Clean Offer for Hang Seng (11 HK)'s Minorities

<ul>
<li>Back on the 5 January, <a href="https://www.smartkarma.com/entities/first-abu-dhabi-bank-pjsc-630e9462-f2e9-436d-8e18-d66080630fa0" target="_blank" data-smartkarma-citation="entities:28946:1" rel="noopener">First Abu Dhabi Bank (FAB DH)</a> said it had considered a bid for <a href="https://www.smartkarma.com/entities/standard-chartered-plc" target="_blank" data-smartkarma-citation="entities:193:1" rel="noopener">Standard Chartered (STAN LN/2888 HK)</a>,  but was no longer evaluating an Offer.</li>
<li>Such a statement kickstarts a six-month cooling-off period whereby FAB is restricted from reloading. This means all deal work must cease.  Unless another bidder emerges or STAN's board approves. </li>
<li>In a curious development, STAN's shares popped ~11% yesterday, on no apparent news.</li>
</ul>


Back on the 5 January, First Abu Dhabi Bank (FAB DH) said it had considered a bid for Standard Chartered (STAN LN/2888 HK),  but was no longer evaluating an Offer.
Such a statement kickstarts a six-month cooling-off period whereby FAB is restricted from reloading. This means all deal work must cease.  Unless another bidder emerges or STAN's board approves. 
In a curious development, STAN's shares popped ~11% yesterday, on no apparent news.


Standard Chartered: Has FAB Gone Cold Or Just Cooling Off?

Independent Research, Turtles all the way down

Turtles all the way down

Independent Research

Writing short articles about mis-priced boring stocks around the world.

Equity Bottom-Up

<ul><li>In this post I tracked my performance on stock mentioned in my blog, and I would like to officially close some ideas here.</li><li>I will start doing that from now on. Something I did privately but not on the blog publicly.</li><li>Either because they have worked out and upside is no more attractive, or because the facts have changed.</li></ul>

In this post I tracked my performance on stock mentioned in my blog, and I would like to officially close some ideas here.I will start doing that from now on. Something I did privately but not on the blog publicly.Either because they have worked out and upside is no more attractive, or because the facts have changed.

<ul>
<li>Flexible printed board player <a href="https://www.smartkarma.com/entities/akm-industrial-co-ltd" target="_blank" data-smartkarma-citation="entities:7206:1" rel="noopener">AKM Industrial (1639 HK)</a> has announced the pre-conditions attached to the Scheme have now been fulfilled.</li>
<li>The despatch of the Scheme Document has been delayed until the 10 June. </li>
<li>Trading at a gross/annualised spread of 2.5/9.6%, including the FY21 final dividend, and payment in early August.</li>
</ul>


Flexible printed board player AKM Industrial (1639 HK) has announced the pre-conditions attached to the Scheme have now been fulfilled.
The despatch of the Scheme Document has been delayed until the 10 June. 
Trading at a gross/annualised spread of 2.5/9.6%, including the FY21 final dividend, and payment in early August.


AKM (1639 HK): Pre-Cons Fulfilled; Possible Early August Payment

Hong Kong

Chong Hing Bank Limited provides banking and related services.  It operates branches in Hong Kong, China, and the United States.

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Chong Hing Bank (1111 HK)

Hang Seng (11 HK)'s Offer: HSBC Investors Are Not Sold On The Strategic Benefits

Hang Seng Bank (11 HK) has announced that the Scheme Doc dispatch will be pushed out to the 17 December 2025, a little under a week ahead of my...

David Blennerhassett

HSBC (5 HK)'s Clean Offer for Hang Seng (11 HK)'s Minorities

Assuming five months to wrap this, pay up to HK$148/share for a 15% annualised return. Including the third interim dividend of HK$1.20/share.

David Blennerhassett

Standard Chartered: Has FAB Gone Cold Or Just Cooling Off?

STAN remains cheap after its recent price run-up. Any change of control development is five months away. If at all. I'd still look to get involved...

David Blennerhassett

Closing Some Idea's

In this post I tracked my performance on stock mentioned in my blog, and I would like to officially close some ideas here. I will start doing that...

Turtles all the way down

AKM (1639 HK): Pre-Cons Fulfilled; Possible Early August Payment

This transaction is all stitched up. Play the spread here. At HK$1.79/share as I type, AKM is currently trading at a gross/annualised spread of...

David Blennerhassett

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