Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven


For the month of December, 19 new deals were discussed on Smartkarma with an overall announced deal size of ~US$14bn.


Clicking on the company name in the table below will take you to the entity page where you can read the initial insight(s) written by Smartkarma contributors on these new deals and follow up discussions, or simply click on the insight link(s) below the name.






New Deals


Industry


Size (US$bn)


Type


Premium




Australia




Asaleo Care Ltd (AHY AU) 
Toiletries
0.3
Possible Scheme
24.7%


Asaleo (ASX: AHY)/Essity: Bottom Feeders







amaysim Australia (AYS AU) 
Mobile operator
0.2
Off-market takeover




Amaysim/WAM: A Question Of Franking Credits
Amaysim (AYS AU): A WAM RAM Stoush




WPP AUNZ (WPP AU) 
Marketing
0.1
Scheme
71%



WPP AUNZ: Mad Men At Work WPP AUNZ: More Mad Men At Work







Hong Kong




China Logistics Property (1589 HK) 
Logistics

Possible Offer



China Logistics (1589 HK): Possible Offer As Major Shareholders Seek Exit



Cowell E Holdings (1415 HK) 
Parts supplier
0.6
Possible MGO
2.98%


Cowell (1415 HK): "Maintain Listing" MGO



Huifu Payment Limited (1806 HK) 
Service provider
0.1
Scheme
26.8%



Huifu Payment (1806 HK): Scheme Offer
Huifu Payment (1806 HK): Early Withdrawal?




I.T Ltd (999 HK) 
Fashion
0.2
Scheme
54.6%


I.T. (999 HK): Management/CVC-Led Offer



SHK Hong Kong Industries (666 HK) 
Securities
0.1
Scheme
50.0%


SHK (666 HK): Allied Group Further Cleans House With Scheme Offer






Japan




Toa Oil Co Ltd (5008 JP) 
Refiner
0.2
Tender Offer
23%


Idemitsu Launches Lowball Tender Offer for Subsidiary Toa Oil (5008)










Malaysia




FGV Holdings Bhd (FGV MK) 
Palm Plantation
0.6
MTO
2.4%



FGV Holdings: Reading the Palm Fronds
FGV Holdings: Low-Ball MTO Triggered











New Zealand




Infratil Ltd (IFT NZ) 
Utilities
3.8
Possible Scheme
22.2%


Infratil (IFT NZ): Big Super's Infrastructure Grab






Philippines




Lopez Holdings (LPZ PM) 
Utilities
0.2
Vol. delisting
25%


Lopez Holdings (LPZ PM): Reverse Voluntary Delisting










Singapore




Hi P International (HIP SP) 
Manufacturing
0.2
Unconditional Offer
13.6%


Hi-P International: Unconditional Offer



Soilbuild Business Space REIT (SBREIT SP) 
REIT
0.4
Scheme



Soilbuild REIT: Offer From Blackstone/Lim Family










Taiwan




Jih Sun Financial (5820 TT) 
Finance
1.8
Tender Offer
18.7%


Fubon Financial Tender Offer for Jih Sun Financial



Thinflex Corp (3144 TT) 
Manufacturing
0.1
Partial Offer
7.15%


Arisawa (5208 JP) Partial Tender for ThinFlex (3144 TT)










Europe




Calisen PLC (1779730D LN) 
Energy
1.9
Cash Offer
26.3%


Recommended Private Equity Cash Offer



Recipharm AB (RECIB SS) 
Pharmaceuticals
2.8
Mandatory Offer
22.9%


Recipharm-EQT Takeout



Tele Columbus AG (TC1 GR) 
Fibre networks
0.5
Voluntary Offer
41.3%


Tele Columbus AG - Morgan Stanley Infrastructure Agreed Bid


Source: Smartkarma Insights 




The average premium for the new deals announced (or first discussed) in December was ~27% and the YTD average premium for all deals discussed on Smartkarma (158 all-in) is ~31%.  The average for all deals discussed on Smartkarma in 2019 (145 deals all-in) was, coincidentally, 31.5%.


The charts below provide a snapshot of deals YTD discussed on Smartkarma. Where the deal is a merger of equals or similar, I've assigned no premium.







Summary of News in December of Arb Situations On Smartkarma's Radar



(Again, click on the company names to take to you to the insights and/or discussion posts for a more comprehensive read-through on each situation. Where a new insight was written on these names in July, I've included a link, in bold, to that insight in italics.)






Australia


Comments (with links to announcements &amp; insights)




3P Learning (3PL AU) 

No December update




Cardinal Resources (CDV AU) 

23-Dec: Cardinal Resources: Shandong's Indicative Bump
24-Dec: Cardinal Resources (CDV AU). Exit Nord Gold, Enter Dongshan.




Coca Cola Amatil (CCL AU) 

No December update




DWS Ltd (DWS AU) 

24-Dec: Scheme effective




Link Administration Holdings (LNK AU) 

7-Dec: Link Admin (LNK AU): SS&amp;C Trumps PEP/Carlyle




Northern Star Resources (NST AU) 

10-Dec: Scheme book registered with ASIC for the Saracen Mineral Holdings (SAR AU) / Northern Star Resources (NST AU) merger. IFA says fair &amp; reasonable.




Regis Healthcare (REG AU) 

No December update




Think Childcare (TNK AU) 

No December update




Village Roadshow (VRL AU) 

4-Dec: BGH declares Offer for Village Roadshow (VRL AU) "best and final".   7-Dec: Both resolutions passed - 83.71% for Structure A and 84.95% for Structure B. Trading in Village Roadshow (VRL AU) to be suspended at the close of trading on the 16 December. 




Vitalharvest Freehold Trust (VTH AU) 

No December update











Hong Kong


Comments (with links to announcements &amp; insights)




Beijing Jingneng Clean Energy (579 HK) 

8-Dec: Beijing Jingneng Clean Energy (579 HK)'s composite doc delayed, as expected, to 31 Dec (on or before), from 8 Dec.
31-Dec: Composite doc is now out. THe H share class meeting is the 19 Feb. IFA says fair &amp; reasonable. 




Car Inc (699 HK) 
4-Dec: Car Inc (699 HK) has delayed the despatch of its Composite Doc to "within 7 days of fulfilment of the Pre-Conditions or 21 May 2021 (being 7 days following the No December update



CIMC-TianDa Holdings (445 HK) 
24-Dec: Scheme approved




Haier Electronics Group Co (1169 HK) 

10-Dec: StubWorld: Last Roll Of The Dice For Haier




Hengxing Gold Holding (2303 HK) 

22-Dec: Scheme Document has now been issued. The EGM is the 13 January. First day of dealing in the new SDGM H shares is the 5 February. IFA says fair &amp; reasonable.




Shanghai Prime Machinery H (2345 HK) 

5-Dec: Pre-cons fulfilled for the Shanghai Prime Machinery H (2345 HK) Offer. Composite Doc to be despatched on or before the 11 December. 
10-Dec: Offer doc despatched.




Sun Art Retail (6808 HK) 

18-Dec: The MGO for Sun Art Retail (6808 HK) has closed with Alibaba holding 83.37%. The free float has fallen to 15.8159%. Alibaba will take steps to restore the float. Shares will continue to trade. 












India


Comments (with links to insights)




Allcargo Logistics (AGLL IN) 

No December update




Hexaware Technologies (HEXW IN) 

No December update




INEOS Styrolution India Limited (INEOS IN) 

2-Dec: INEOS Styrolution India Limited (INEOS IN) has been on a tear since just before earnings on 10 November.  The stock is up nearly 40% since the beginning of November.  Standalone net profit rose 262%yoy in the quarter to Rs 35.84 crore. Sales were down 10%yoy to Rs 394.58 crore.











Japan


Comments (with links to insights)




Cocokara Fine (3098 JP) 
No December update



Honshu Chemical Industry (4115 JP) 

No December update




Imasen Electric Industrial (7266 JP) 

9-Dec: The results of the Imasen Electric Industrial (7266 JP) Tender Offer have been announced. 7.161mm shares were tendered against a 5.209mm share buy which means a 72.75% pro-ration. 




Japan Asia (3751 JP) 

11-Dec: City Index Eleventh is now 14.91% of the register at Japan Asia (3751 JP).




Joban Kaihatsu (1782 JP) 

25-Dec: The bidder for Joban Kaihatsu (1782 JP) announced a change in the end date for the Tender Offer, changing the end date from 28 December 2020 to 25 January 2021.  28-Dec: Today Black Clover Limited reported that they had increased their position in Joban Kaihatsu (1782 JP) to 10.97%. 




Kansai Mirai Financial (7321 JP) 

10-Dec: The Tender Offer for Kansai Mirai Financial (7321 JP), interestingly, ended up gaining more shares tendered than the minimum. 34.44mm showed up. The pro-ration is 100% so no issues there, but it likely means other cross-holders decided to take the cash.




Keihanshin Building (8818 JP) 

17-Dec:  UGS and Strategic extended their partial tender offer for Keihanshin Building (8818 JP) from 17 Dec 2020 to 12 Jan 2021. It is not clear why - if the shares fall a bit, they could get hit, otherwise this is destined to be unsuccessful. 




Kenedix Inc (4321 JP) 

7-Dec: Fidelity was a 9+% holder of Kenedix Inc (4321 JP)  prior to the Tender Offer being launched and today reported that they are a 0.92% holder triggered by a change effective on 30 November.




Medical &amp; Biological Laboratories (4557 JP) 

No December update




NTT Docomo Inc (9437 JP) 

2-Dec: The NTT Docomo Inc (9437 JP) selldown for TOPIX was expected to be 30-33mm shares. We saw 34.8mm shares on the day which is about 26-28mm shares more than normal. That should be the last of the Docomo selling by passive. From now until month-end it is basically just the residual and arbs selling to each other.




Shimachu Co Ltd (8184 JP) 

11-Dec: It appears that DCM Holdings (3050 JP) has not extended the Tender Offer for Shimachu Co Ltd (8184 JP) which they had extended until today.  That suggests they are done with their bid, or that they will go in partnership to launch a new one.  I expect it is the former.
14-Dec: DCM Holdings (3050 JP)'s Tender Offer lapses.  They needed 19+mm shares to succeed. They got 32,000.  Nothing done here.  It looks like Nitori Holdings (9843 JP)'s bid for Shimachu Co Ltd (8184 JP) goes through.
29-Dec: Nitori Holdings (9843 JP) today announced that it had successfully completed the Tender Offer for Shimachu Co Ltd (8184 JP), gaining 77.04% of the shares outstanding. 




Softbrain (4779 JP) 

No December update




Tohto Suisan (8038 JP) 

No December update




Tokyo Dome Corp (9681 JP) 

1-Dec: Tokyo Dome – Assessing the Realism of Oasis Estimates
3-Dec: ISS Takes Umbrage with Tokyo Dome, Recommends Booting the CEO from the Board
8-Dec: Oasis Agrees To Tender Tokyo Dome (9681) - This Changes Things
17-Dec: Mitsui Fudosan (8801 JP) announces Tender Agreement with Oasis on Tokyo Dome Corp (9681 JP) 




Yomiuri Land (9671 JP) 

No December update










Malaysia


Comments (with links to insights and announcements)




Batu Kawan Bhd (BAK MK) 

No December update











Singapore


Comments (with links to announcements)




ESR-REIT (EREIT SP) / Sabana Shari'ah Compliant Industrial REIT (SSREITR SP) 

6-Dec: Chalk one up for investors as the ESR-REIT (EREIT SP) / Sabana Shari’ah Compliant REIT (SSREIT SP) merger is voted down.













Thailand


Comments 




COL PCL (COL TB) 
No December update












Middle East


Comments 




Samba Financial Group (SAMBA AB) /
National Commercial Bank (NCB AB) 

No December update










Europe/UK


Comments (with links to announcements and insights)




Ahlstrom-Munksjo (AM1 FH) 
No December update



Altice NV A (ATC NA) 


16-Dec: Next Private increases offer price to EUR 5.35 Boussard &amp; Gavaudan, Diameter, Elliott, LB Partners, Lucerne, Sessa, Sheffield and Winterbrook commit to tender their Listed Shares under the Offer.




Aryzta AG (ARYN VX) 


No December update




CaixaBank SA (CABK SM) 
7-Dec: CaixaBank - Bankia: Merger Approval at the EGMs, Spread




Entra ASA (ENTRA NO) 

28-Dec: Entra - SBB - Castellum: Bidding War Heats Up




G4S PLC (GFS LN) 

2-Dec: GardaWorld has increased its offer for G4S PLC (GFS LN) to GBp 235/ share and has said that the new offer is final and will not be increased further.
8-Dec: G4S has agreed to a 245 pence per share takeover offer from U.S.-based Allied Universal, the companies said on Tuesday, days after Canada’s GardaWorld had sweetened its bid to 235 pence per share for the British company.
11-Dec: Allied Universal's Agreed Offer




Globalwafers (6488 TT) 
21-Dec: GlobalWafers Cash Offer




Play Communications SA (1P1 GR) 
No December update



RSA Insurance (RSA LN) 
No December update



Talktalk Telecom (TALK LN) 
No December update



William Hill (WMH LN) 
No December update





Last Week in Event SPACE: Haier, Tokyo Dome, Cowell, Infratil, Link Admin, Sapporo/Asahi, Mcdonald's

After shares were <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/1210/2020121000121.pdf" target="_blank" rel="noopener">suspended</a> before trading yesterday pursuant to the Hong Kong Code on Takeovers and Mergers, camera modules for mobile devices player <a href="https://www.smartkarma.com/entities/cowell-e-holdings-inc" target="_blank" data-smartkarma-citation="entities:336:1" rel="noopener">Cowell E Holdings (1415 HK)</a> has now <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/1210/2020121000859.pdf" target="_blank" rel="noopener">announced</a> Kwak Joung Hwan,  founder and current Executive Chairman of the company, has entered into a SPA with Luxvision Innovation to sell his 44.87% stake.
Should the SPA complete  - and the SPA has limited conditions - a mandatory general offer (MGO) would be triggered at the same price under the SPA, or HK$5.87/share, a 2.98% premium to last close, but a 52.2% premium to the average close over the past three months.
The key condition to the MGO is Luxvision holding 50% of the voting rights of Cowell at the close of the Offer. No irrevocables have been given.
It is not Luxvision's intention to delist the company. This is a change of control as Kwak exits.  Expect shares to trade around the Offer price. The price has not been declared final.
More below the fold.

After shares were suspended before trading yesterday pursuant to the Hong Kong Code on Takeovers and Mergers, camera modules for mobile devices player Cowell E Holdings (1415 HK) has now announced Kwak Joung Hwan,  founder and current Executive Chairman of the company, has entered into a SPA with Luxvision Innovation to sell his 44.87% stake.
Should the SPA complete  - and the SPA has limited conditions - a mandatory general offer (MGO) would be triggered at the same price under the SPA, or HK$5.87/share, a 2.98% premium to last close, but a 52.2% premium to the average close over the past three months.
The key condition to the MGO is Luxvision holding 50% of the voting rights of Cowell at the close of the Offer. No irrevocables have been given.
It is not Luxvision's intention to delist the company. This is a change of control as Kwak exits.  Expect shares to trade around the Offer price. The price has not been declared final.
More below the fold.

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.

<a href="https://www.smartkarma.com/entities/cowell-e-holdings-inc" target="_blank" data-smartkarma-citation="entities:336:1" rel="noopener">Cowell E Holdings (1415 HK)</a> is a major supplier of camera modules for mobile devices to leading mobile device manufacturers such as <a href="https://www.smartkarma.com/entities/apple-inc" target="_blank" data-smartkarma-citation="entities:666:1" rel="noopener">Apple Inc (AAPL US)</a>. On Thursday after market close, Cowell announced a sale and purchase agreement (SPA) and a possible mandatory conditional cash offer. As the offeror will acquire more than 30% of the voting rights because of the SPA, the Takeovers Code requires the offeror to make a mandatory conditional cash offer for all the issued shares. The offer price of HK$5.87 per share, which is in line to SPA price, is a 2.98% premium to the last trading price of HK$5.70 per share (9 December prior to the trading halt). <div class="content-highlight">The offer is conditional on the offeror and concert parties holding more than 50% of the voting rights. Post the SPA completion, the offeror will hold 44.87% of the outstanding shares and voting rights. In combination with a reasonable price, we think that offer will fulfil the completion condition and become unconditional. </div>

Cowell E Holdings (1415 HK) is a major supplier of camera modules for mobile devices to leading mobile device manufacturers such as Apple Inc (AAPL US). On Thursday after market close, Cowell announced a sale and purchase agreement (SPA) and a possible mandatory conditional cash offer. As the offeror will acquire more than 30% of the voting rights because of the SPA, the Takeovers Code requires the offeror to make a mandatory conditional cash offer for all the issued shares. The offer price of HK$5.87 per share, which is in line to SPA price, is a 2.98% premium to the last trading price of HK$5.70 per share (9 December prior to the trading halt). The offer is conditional on the offeror and concert parties holding more than 50% of the voting rights. Post the SPA completion, the offeror will hold 44.87% of the outstanding shares and voting rights. In combination with a reasonable price, we think that offer will fulfil the completion condition and become unconditional. 

Cowell E Holdings’ Possible Mandatory Conditional Cash Offer

When investors are chucking in the towel, including the event space (RV, risk arb etc.), it's time for some old school perspective.
In this insight, I look at <a href="https://en.wikipedia.org/wiki/Benjamin_Graham" target="_blank" rel="noopener">Benjamin Graham</a>'s Net Nets, or working capital (current assets less current liabilities), then subtract any debt not included in current liabilities. To make it simple, I use current assets less total liabilities.
This set of data is what Graham would deem stocks priced for liquidation.
I calculate 1,087 stocks trading below their net current asset value (NCAV) across Japan, Hong Kong, Korea, Australia, Taiwan and Singapore.
That number declines to 114 for stocks which trade &gt;US1$mn/day (3-month basis), and just 20 trading &gt;US$5mn/day.
A rundown of those stocks is shown below.

When investors are chucking in the towel, including the event space (RV, risk arb etc.), it's time for some old school perspective.
In this insight, I look at Benjamin Graham's Net Nets, or working capital (current assets less current liabilities), then subtract any debt not included in current liabilities. To make it simple, I use current assets less total liabilities.
This set of data is what Graham would deem stocks priced for liquidation.
I calculate 1,087 stocks trading below their net current asset value (NCAV) across Japan, Hong Kong, Korea, Australia, Taiwan and Singapore.
That number declines to 114 for stocks which trade &gt;US1$mn/day (3-month basis), and just 20 trading &gt;US$5mn/day.
A rundown of those stocks is shown below.

China

Cowell e Holdings is a supplier of precision optical modules and components for electronic mobile devices, including smartphones, multimedia tablets, and smart driving systems. The company specializes in the design, development, manufacturing, and sale of these optical modules and camera components. It was founded in 2006 and is headquartered in Dongguan, China.

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Cowell e (1415 HK)

(Mostly) Asia M&A: 2020 Roundup

The average premium for the 19 new deals discussed on Smartkarma in December was ~27% and the YTD average premium for all 158 deals is ~31%. The...

David Blennerhassett

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The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Cowell (1415 HK): "Maintain Listing" MGO

Buy Cowell close to terms. This deal could potentially turn unconditional well before the sale and purchase agremeent long-stop.

David Blennerhassett

Cowell E Holdings’ Possible Mandatory Conditional Cash Offer

Cowell announced a possible mandatory conditional cash offer at HK$5.87 per share. In combination with a reasonable price, we think that offer will...

Arun George

Asia-Pac Stocks Priced For Liquidation

When investors are chucking in the towel, including the event space (RV, risk arb etc.), it's time for some old school perspective. In this...

David Blennerhassett

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