Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>
<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> has <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2022/0818/2022081800161.pdf" target="_blank" rel="noopener">announced</a> 1H22 net profit of HK$97mn compared to  HK$60mn in 1H21.</li>
<li>Of interest is the declaration of an interim dividend of HK$0.085/share.</li>
<li>The ex-dividend date is the 20 September. Whether you get the dividend plus the Offer Price depends when the Offer closes (or is extended), and/or whether the Offer turns Unconditional.</li>
</ul>



Giordano International (709 HK) has announced 1H22 net profit of HK$97mn compared to  HK$60mn in 1H21.
Of interest is the declaration of an interim dividend of HK$0.085/share.
The ex-dividend date is the 20 September. Whether you get the dividend plus the Offer Price depends when the Offer closes (or is extended), and/or whether the Offer turns Unconditional.


Giordano (709 HK): Interim Divy - But Perhaps Not If You Tender

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>
<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>’s 1H22 net profit of HK$97 million was within the HK$91-101 million positive profit range. The IFA noted that interims do not change its advice.</li>
<li>The Board surprisingly declared an interim dividend of HK$0.085 per share. As the ex-div falls after the final closing date, shareholders who accept the offer will not receive the dividend. </li>
<li>The incrementally positive outlook and dividend highlight Giordano’s value. The results have pushed our deal break/intrinsic value to align with the VGO price. </li>
</ul>



Giordano International (709 HK)’s 1H22 net profit of HK$97 million was within the HK$91-101 million positive profit range. The IFA noted that interims do not change its advice.
The Board surprisingly declared an interim dividend of HK$0.085 per share. As the ex-div falls after the final closing date, shareholders who accept the offer will not receive the dividend. 
The incrementally positive outlook and dividend highlight Giordano’s value. The results have pushed our deal break/intrinsic value to align with the VGO price. 


Giordano’s Improving Outlook and Surprising Dividend Provide Deal-Break Support

<ul>
<li>
<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>’s voluntary conditional from the Cheng Yu Tung family (24.57% of outstanding shares) at HK$1.88 per share is open with a first closing date of 5 September.</li>
<li>Crucially, the offeror will not increase the offer price. In combination with an ongoing retail recovery, the low-ball offer has little chance of meeting the 50%+ minimum acceptance threshold.</li>
<li>While the IFA says the offer is fair and reasonable, key directors will not accept the offer. A deal break implies, at most, another 10% downside to the last close.</li>
</ul>



Giordano International (709 HK)’s voluntary conditional from the Cheng Yu Tung family (24.57% of outstanding shares) at HK$1.88 per share is open with a first closing date of 5 September.
Crucially, the offeror will not increase the offer price. In combination with an ongoing retail recovery, the low-ball offer has little chance of meeting the 50%+ minimum acceptance threshold.
While the IFA says the offer is fair and reasonable, key directors will not accept the offer. A deal break implies, at most, another 10% downside to the last close.


Giordano’s Conditional Offer Open, Price Declared Final, Unlikely to Meet 50%+ Voting Threshold

<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

<ul>
<li>We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Indonesia, Malaysia, Thailand and Chinese ADRs.</li>
<li>The highest spreads are <a href="https://www.smartkarma.com/entities/21-vianet-group-inc-adr" target="_blank" data-smartkarma-citation="entities:8489:1" rel="noopener">21Vianet Group (VNET US)</a>, <a href="https://www.smartkarma.com/entities/alliance-aviation-services-ltd" target="_blank" data-smartkarma-citation="entities:20401:1" rel="noopener">Alliance Aviation Services (AQZ AU)</a>, <a href="https://www.smartkarma.com/entities/narhex-life-sciences-ltd" target="_blank" data-smartkarma-citation="entities:9728:1" rel="noopener">Resapp Health (RAP AU)</a>, <a href="https://www.smartkarma.com/entities/ramsay-health-care-ltd" target="_blank" data-smartkarma-citation="entities:673:1" rel="noopener">Ramsay Health Care (RHC AU)</a>, <a href="https://www.smartkarma.com/entities/yashili-international-holdings-ltd" target="_blank" data-smartkarma-citation="entities:3397:1" rel="noopener">Yashili International Holdings (1230 HK)</a>, Link Admin. </li>
<li>Lowest gross spreads are <a href="https://www.smartkarma.com/entities/hwa-hong-corp-ltd" target="_blank" data-smartkarma-citation="entities:6648:1" rel="noopener">Hwa Hong Corp (HWAH SP)</a>, <a href="https://www.smartkarma.com/entities/excelpoint-technology-ltd" target="_blank" data-smartkarma-citation="entities:1774:1" rel="noopener">Excelpoint Technology (EXLP SP)</a>, <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>, <a href="https://www.smartkarma.com/entities/mydeal-com-au-ltd" target="_blank" data-smartkarma-citation="entities:30939:1" rel="noopener">MyDeal.com.au Ltd (MYD AU)</a>, <a href="https://www.smartkarma.com/entities/cocoaland-holdings-bhd" target="_blank" data-smartkarma-citation="entities:493:1" rel="noopener">Cocoaland Holdings (COLA MK)</a>, <a href="https://www.smartkarma.com/entities/maca-ltd" target="_blank" data-smartkarma-citation="entities:11390:1" rel="noopener">MACA Ltd (MLD AU)</a>. </li>
</ul>


We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Indonesia, Malaysia, Thailand and Chinese ADRs.
The highest spreads are 21Vianet Group (VNET US), Alliance Aviation Services (AQZ AU), Resapp Health (RAP AU), Ramsay Health Care (RHC AU), Yashili International Holdings (1230 HK), Link Admin. 
Lowest gross spreads are Hwa Hong Corp (HWAH SP), Excelpoint Technology (EXLP SP), Giordano International (709 HK), MyDeal.com.au Ltd (MYD AU), Cocoaland Holdings (COLA MK), MACA Ltd (MLD AU). 


Merger Arb Mondays (01 Aug) - Genex, Yashili, Link Admin, VNET, Ramsay, Alliance Aviation

Hong Kong

Giordano is an international retailer specializing in men's, women's, and children's apparel and accessories. The company offers a wide range of fashion-oriented clothing and accessories under brands such as Giordano, Giordano Junior, Giordano Ladies, and BSX, through its retail, distribution, and wholesale operations. Giordano was founded in Hong Kong in 1981.

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Giordano (709 HK)

Giordano (709 HK): Interim Divy - But Perhaps Not If You Tender

The downside is limited here. If you buy here or lower, you are effectively buying for the back-end, not the Offer. I view the arb as risky...

David Blennerhassett

Giordano’s Improving Outlook and Surprising Dividend Provide Deal-Break Support

The declining gross spread does not reflect an increased probability of an unconditional offer but Giordano’s rising intrinsic value, which is...

Arun George

Giordano’s Conditional Offer Open, Price Declared Final, Unlikely to Meet 50%+ Voting Threshold

As the offeror will not increase the offer price, there is little chance of meeting the 50%+ minimum acceptance threshold. A deal break implies, at...

Arun George

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

Merger Arb Mondays (01 Aug) - Genex, Yashili, Link Admin, VNET, Ramsay, Alliance Aviation

This week, the highest gross spreads are VNET (55.0%), Alliance Aviation (47.5%), ResApp (27.0%), Ramsay (24.7%), Yashili (10.1%), Link Admin...

Arun George

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