Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>The Scheme Document for <strong><a href="https://www.smartkarma.com/entities/cp-pokphand-co-ltd" target="_blank" data-smartkarma-citation="entities:10135:1" rel="noopener">Cp Pokphand (43 HK)</a></strong> (CPP) has been dispatched. The Scheme Meeting will take place on the 15 December. </li>
<li>
<a href="https://www.smartkarma.com/entities/charoen-pokphand-foods-public-company-limited" target="_blank" data-smartkarma-citation="entities:16131:1" rel="noopener"><strong>CP FOODS (CPF TB)</strong></a> and <strong><a href="https://www.smartkarma.com/entities/itochu-corp" target="_blank" data-smartkarma-citation="entities:18448:1" rel="noopener">Itochu Corp (8001 JP)</a></strong> with 49.74% and 25% of shares out respectively are offering HK$1.15/share for CPP, a leading agri-food conglomerate in China and Vietnam. </li>
<li>The Independent Financial Adviser (Ballas Capital) considers the Scheme to be fair and reasonable. Assuming the Scheme gets up, payment is the 25 January, on or before.</li>
</ul>


The Scheme Document for Cp Pokphand (43 HK) (CPP) has been dispatched. The Scheme Meeting will take place on the 15 December. 

CP FOODS (CPF TB) and Itochu Corp (8001 JP) with 49.74% and 25% of shares out respectively are offering HK$1.15/share for CPP, a leading agri-food conglomerate in China and Vietnam. 
The Independent Financial Adviser (Ballas Capital) considers the Scheme to be fair and reasonable. Assuming the Scheme gets up, payment is the 25 January, on or before.


C.P. Pokphand (43 HK): Scheme Doc Out. Meeting on 15 December

<div>
<p>After being <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0927/2021092700107.pdf" target="_blank" rel="noopener">suspended</a> on the 27 September pursuant to the Hong Kong Code on Takeovers and Mergers, <a href="https://www.smartkarma.com/entities/cp-pokphand-co-ltd" target="_blank" data-smartkarma-citation="entities:10135:1" rel="noopener">Cp Pokphand (43 HK)</a> ("CPP"), a leading agri-food conglomerate in China and Vietnam, has now announced an Offer, by way of a Scheme, from <a href="https://www.smartkarma.com/entities/charoen-pokphand-foods-public-company-limited" target="_blank" data-smartkarma-citation="entities:16131:1" rel="noopener">CP Foods (CPF TB)</a>.</p>
<p>The consideration is $1.15/share, a 19.79% premium to last close. The Offer price will NOT be increased.</p>
<p>CPF holds 49.74% and <a href="https://www.smartkarma.com/entities/itochu-corp" target="_blank" data-smartkarma-citation="entities:18448:1" rel="noopener">Itochu Corp (8001 JP)</a> 25%. Itochu has entered into a rollover agreement with CPF such that upon successful completion of the Scheme, CPF will hold 75% and Itochu 25%. </p>
<p>The Offer premium is a trifle light to that consistently seen in Hong Kong M&amp;A deals in recent years. Nevertheless, this all looks stitched up and should trade tight when shares resume trading on Monday.</p>
<p>More below the fold. </p>
</div>
<div>
<p></p>
</div>


After being suspended on the 27 September pursuant to the Hong Kong Code on Takeovers and Mergers, Cp Pokphand (43 HK) ("CPP"), a leading agri-food conglomerate in China and Vietnam, has now announced an Offer, by way of a Scheme, from CP Foods (CPF TB).
The consideration is $1.15/share, a 19.79% premium to last close. The Offer price will NOT be increased.
CPF holds 49.74% and Itochu Corp (8001 JP) 25%. Itochu has entered into a rollover agreement with CPF such that upon successful completion of the Scheme, CPF will hold 75% and Itochu 25%. 
The Offer premium is a trifle light to that consistently seen in Hong Kong M&amp;A deals in recent years. Nevertheless, this all looks stitched up and should trade tight when shares resume trading on Monday.
More below the fold. 





C.P. Pokphand (43 HK): Privatisation Offer From CP Foods

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.

<p><a href="https://www.smartkarma.com/entities/cp-pokphand-co-ltd" target="_blank" data-smartkarma-citation="entities:10135:1" rel="noopener">Cp Pokphand (43 HK)</a> (CPP) is a leading agri-food conglomerate in China and Vietnam. After market close on Thursday, it announced a privatisation offer by way of a scheme of arrangement from <a href="https://www.smartkarma.com/entities/charoen-pokphand-foods-public-company-limited" target="_blank" data-smartkarma-citation="entities:16131:1" rel="noopener">CP FOODS (CPF TB)</a>, the largest shareholder (49.74% of the outstanding shares). The offeror will offer HK$1.15 in cash for each scheme share. The bid represents a premium of 19.79% over the closing price of HK$0.96 per share on the last trading date (24 September prior to the trading halt). </p><p>For good measure, CPP also released a statement outlining a profit warning. CPP noted that the net profit would decline -75% YoY in 8M21, which marks a deterioration to the net profit decline of -50% YoY in 1H21. The profit warning was attributed mainly to a poor performance in China caused by lower poultry and swine prices. CPP notes that poultry and swine prices in China and swine prices in Vietnam will have fallen further in September. </p><div class="content-highlight"><p>The key condition precedents are the headcount test along with the scheme approved by at least 75% disinterested shareholders and &lt;10% rejection by all disinterested shareholders. As disinterested scheme shareholders represent 5,958.8 million shares or 24.75% of shares outstanding, the 10% blocking stake is 595.9 million shares or 2.48% of shares outstanding. No shareholder holds a blocking stake. Overall, we think the offer price is attractive and that the privatisation bid will be successful. </p></div>

Cp Pokphand (43 HK) (CPP) is a leading agri-food conglomerate in China and Vietnam. After market close on Thursday, it announced a privatisation offer by way of a scheme of arrangement from CP FOODS (CPF TB), the largest shareholder (49.74% of the outstanding shares). The offeror will offer HK$1.15 in cash for each scheme share. The bid represents a premium of 19.79% over the closing price of HK$0.96 per share on the last trading date (24 September prior to the trading halt). For good measure, CPP also released a statement outlining a profit warning. CPP noted that the net profit would decline -75% YoY in 8M21, which marks a deterioration to the net profit decline of -50% YoY in 1H21. The profit warning was attributed mainly to a poor performance in China caused by lower poultry and swine prices. CPP notes that poultry and swine prices in China and swine prices in Vietnam will have fallen further in September. The key condition precedents are the headcount test along with the scheme approved by at least 75% disinterested shareholders and &lt;10% rejection by all disinterested shareholders. As disinterested scheme shareholders represent 5,958.8 million shares or 24.75% of shares outstanding, the 10% blocking stake is 595.9 million shares or 2.48% of shares outstanding. No shareholder holds a blocking stake. Overall, we think the offer price is attractive and that the privatisation bid will be successful. 

C.P. Pokphand’s Privatisation Bid from CPF

<p><a href="https://www.smartkarma.com/entities/cp-pokphand-co-ltd" target="_blank" data-smartkarma-citation="entities:10135:1" rel="noopener">Cp Pokphand (43 HK)</a> ("CPP") a leading agri-food conglomerate in China and Vietnam, is currently <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0927/2021092700107.pdf" target="_blank" rel="noopener">suspended</a> pursuant to the Hong Kong Code on Takeovers and Mergers. There is, as yet, no further details forthcoming.</p>
<div>
<p><a href="https://www.smartkarma.com/entities/charoen-pokphand-foods-public-company-limited" target="_blank" data-smartkarma-citation="entities:16131:1" rel="noopener">CP FOODS (CPF TB)</a> (54%) and <a href="https://www.smartkarma.com/entities/itochu-corp" target="_blank" data-smartkarma-citation="entities:18448:1" rel="noopener">Itochu Corp (8001 JP)</a> (25%) collectively control <a href="https://di.hkex.com.hk/di/NSAllSSList.aspx?sa2=as&amp;sid=64&amp;corpn=C.+P.+Pokphand+Co.+Ltd.&amp;sd=28/09/2014&amp;ed=28/09/2021&amp;cid=0&amp;sa1=cl&amp;scsd=28%2f09%2f2014&amp;sced=28%2f09%2f2021&amp;sc=43&amp;src=MAIN&amp;lang=EN&amp;g_lang=en&amp;" target="_blank" rel="noopener">79%</a> of CPP.</p>
</div>
<div>
<p>This insight provides some background information on CPP, and also speculates on a fair price should a firm Offer unfold. </p>
</div>

Cp Pokphand (43 HK) ("CPP") a leading agri-food conglomerate in China and Vietnam, is currently suspended pursuant to the Hong Kong Code on Takeovers and Mergers. There is, as yet, no further details forthcoming.

CP FOODS (CPF TB) (54%) and Itochu Corp (8001 JP) (25%) collectively control 79% of CPP.


This insight provides some background information on CPP, and also speculates on a fair price should a firm Offer unfold. 


C.P. Pokphand (43 HK): Suspended Pursuant To Takeovers Code

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Index Rebalance

<p>Hang Seng Indexes Company (HSIL) reviews the constituents of the Hang Seng Composite Index (HSCI) on a half yearly basis in March and September with data cut-off dates as of the end of December and June. The review announcement for the September 2021 review should be made on 13 August and will be effective after the close of trading on 3 September.</p><p>Although there are almost no assets indexed to the HSCI, the index forms the basis of stocks that are eligible for Southbound Stock Connect. Stocks that are included in the HSCI and subsequently included in the Stock Connect program get inflows from mainland investors.</p><p>We see 28 potential inclusions to the HSCI at the rebalance and 15 potential deletions, plus another 7 close deletions. Only 10 of the potential deletions will be removed from Southbound Stock Connect buy list since the other deletions are either not a part of Stock Connect currently or have listed A-shares.</p><p>The inclusions to the HSCI outperformed the deletions at the March rebalance from review cut-off to announcement of the changes before giving by some of the gains to implementation and then some more for the 1 month post the implementation of the changes.</p>

Hang Seng Indexes Company (HSIL) reviews the constituents of the Hang Seng Composite Index (HSCI) on a half yearly basis in March and September with data cut-off dates as of the end of December and June. The review announcement for the September 2021 review should be made on 13 August and will be effective after the close of trading on 3 September.Although there are almost no assets indexed to the HSCI, the index forms the basis of stocks that are eligible for Southbound Stock Connect. Stocks that are included in the HSCI and subsequently included in the Stock Connect program get inflows from mainland investors.We see 28 potential inclusions to the HSCI at the rebalance and 15 potential deletions, plus another 7 close deletions. Only 10 of the potential deletions will be removed from Southbound Stock Connect buy list since the other deletions are either not a part of Stock Connect currently or have listed A-shares.The inclusions to the HSCI outperformed the deletions at the March rebalance from review cut-off to announcement of the changes before giving by some of the gains to implementation and then some more for the 1 month post the implementation of the changes.

HSCI Index Rebalance & Stock Connect: Expected Changes in September

Hong Kong

CP Pokphand is an investment holding company and a leading agri-food conglomerate operating in China and Vietnam. It specializes in the manufacture and sale of animal feed products, the breeding, farming, and sale of livestock and aquatic animals, and the production and sale of value-added processed food products. The company is based in Hong Kong, Hong Kong, and was founded in 1979.

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CP Pokphand (CPKPF US)

C.P. Pokphand (43 HK): Scheme Doc Out. Meeting on 15 December

This still looks a pretty clean deal. I'd be paying up to and around $1.12/share which is ~3.6%/15% gross/annualised spread.

David Blennerhassett

C.P. Pokphand (43 HK): Privatisation Offer From CP Foods

This looks pretty clean. Assuming mid-Feb completion, I'd be paying up to and around $1.11/share which is ~5.8%/16.5 gross/annualised spread, when...

David Blennerhassett

C.P. Pokphand’s Privatisation Bid from CPF

CPP announced a privatisation offer from CPF at HK$1.15 cash for each scheme share. Overall, we think the offer price is attractive and that the...

Arun George

C.P. Pokphand (43 HK): Suspended Pursuant To Takeovers Code

I think you could simply use the unaffected price of HK$0.96 and multiply it by the 30% premium widely seen in M&A transactions around the region...

David Blennerhassett

HSCI Index Rebalance & Stock Connect: Expected Changes in September

Currently we see 28 potential inclusions & 22 deletions from the HSCI at the Sep rebalance. Most of the inclusions will join Stock Connect while...

Brian Freitas

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