Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

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<li>Conglomerate <strong><a href="https://www.smartkarma.com/entities/guoco-group-ltd" target="_blank" data-smartkarma-citation="entities:5290:1" rel="noopener">Guoco Group (53 HK)</a></strong> has fielded three privatisation Offers from Guoline (the Quek family) over the past twenty years. </li>
<li>Elliott Advisors, then holding 9.72% of shares out, backed the most recent Offer of HK$135/share in November 2018; but it was voted down at a Scheme Meeting. </li>
<li>Elliott has now, surprisingly, exited. This <em>may</em> open the door for a fourth Offer. Shares popped 14% on the news.  </li>
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Conglomerate Guoco Group (53 HK) has fielded three privatisation Offers from Guoline (the Quek family) over the past twenty years. 
Elliott Advisors, then holding 9.72% of shares out, backed the most recent Offer of HK$135/share in November 2018; but it was voted down at a Scheme Meeting. 
Elliott has now, surprisingly, exited. This may open the door for a fourth Offer. Shares popped 14% on the news.  


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<p>Singaporean property play <a href="https://www.smartkarma.com/entities/singhaiyi-group-ltd" target="_blank" data-smartkarma-citation="entities:19307:1" rel="noopener">SingHaiyi (SHG SP)</a> has announced a <a href="https://links.sgx.com/FileOpen/Offer_Announcement.ashx?App=Announcement&amp;FileID=689919" target="_blank" rel="noopener">voluntary conditional cash Offer</a> from Gordan and Celine Tang, who control 75.56% of shares out. </p>
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<p>The Offer Price of S$0.117/share is an 8.3% premium to last close and 0.78x P/NAV. The acceptance condition is 90%, including the Tang's stake, although the Tang's reserve the right to reduce this to 50%. Family members with 2.81% have given an irrecoverable to tender into the Offer taking the accumulated holding to 78.37%. Save for the acceptance condition, the Offer is unconditional in all other respects.</p>
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<p>This appears a relatively listless Offer premium, however, it pitches SingHaiyi around a multi-year high. The Offer has not been declared final.</p>
<p>The entire construct is reminiscent of the Offer from <a href="https://www.smartkarma.com/entities/guoco-group-ltd" target="_blank" data-smartkarma-citation="entities:5290:1" rel="noopener">Guoco Group Ltd (53 HK)</a> for <a href="https://www.smartkarma.com/entities/gl-ltd" target="_blank" data-smartkarma-citation="entities:2540:1" rel="noopener">GL Ltd (GLL SP)</a> - <em><a href="https://skr.ma/SdJKh" target="_blank" rel="noopener">GL Limited (GLL SP): Privatisation Offer Renews Interest In Guoco</a></em> - which was successfully completed after terms were bumped. </p>
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<p>As always, more below the fold.</p>
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Singaporean property play SingHaiyi (SHG SP) has announced a voluntary conditional cash Offer from Gordan and Celine Tang, who control 75.56% of shares out. 


The Offer Price of S$0.117/share is an 8.3% premium to last close and 0.78x P/NAV. The acceptance condition is 90%, including the Tang's stake, although the Tang's reserve the right to reduce this to 50%. Family members with 2.81% have given an irrecoverable to tender into the Offer taking the accumulated holding to 78.37%. Save for the acceptance condition, the Offer is unconditional in all other respects.


This appears a relatively listless Offer premium, however, it pitches SingHaiyi around a multi-year high. The Offer has not been declared final.
The entire construct is reminiscent of the Offer from Guoco Group Ltd (53 HK) for GL Ltd (GLL SP) - GL Limited (GLL SP): Privatisation Offer Renews Interest In Guoco - which was successfully completed after terms were bumped. 


As always, more below the fold.


SingHaiyi Group (SHG SP): Tang's Conditional Offer

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<p>This week in StubWorld ...</p>
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<p>Following Yue Xiu's privatization Offer for <a href="https://www.smartkarma.com/entities/chong-hing-bank-ltd" target="_blank" data-smartkarma-citation="entities:344:1" rel="noopener">Chong Hing Bank (1111 HK)</a>, Hong Kong's remaining  "family"-owned banks, such as <a href="https://www.smartkarma.com/entities/bank-of-east-asia-ltd" target="_blank" data-smartkarma-citation="entities:341:1" rel="noopener">Bank of East Asia (23 HK)</a> (BEA), are back in focus. <a href="https://www.smartkarma.com/entities/guoco-group-ltd" target="_blank" data-smartkarma-citation="entities:5290:1" rel="noopener">Guoco Group Ltd (53 HK)</a> is trading cheap to its historical NAV discount range, and the 14.94% holding in BEA accounts for 15% of its NAV.</p>
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<p>Preceding my comments on Guoco are the weekly setup/unwind tables for Asia-Pacific Holdcos.</p>
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<p>These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.</p>
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This week in StubWorld ...



Following Yue Xiu's privatization Offer for Chong Hing Bank (1111 HK), Hong Kong's remaining  "family"-owned banks, such as Bank of East Asia (23 HK) (BEA), are back in focus. Guoco Group Ltd (53 HK) is trading cheap to its historical NAV discount range, and the 14.94% holding in BEA accounts for 15% of its NAV.



Preceding my comments on Guoco are the weekly setup/unwind tables for Asia-Pacific Holdcos.


These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.


StubWorld: Guoco/BEA Into Focus Post Chong Hing Bank Bid

Research from SooChow CSSD Capital Markets (Asia), SCCM Asia Research

SCCM Asia Research

Research from SooChow CSSD Capital Markets (Asia)

Thematic (Sector/Industry)

<h2>Singapore</h2><h3><a href="https://www.smartkarma.com/entities/frasers-centrepoint-trust" target="_blank" data-smartkarma-citation="entities:2870" rel="noopener">Frasers Centrepoint Trust (FCT SP)</a> to sell YewTee Point for S$220m; 75% upside from original purchase price</h3><p>FCT will divest YewTee Point for S$220m, having entered into a sale-and-purchase agreement with an unrelated third party. The transaction is expected to be completed on 28May21. The sales proceed will be used to repay debts and lower gearing level. The Choa Chu Kang mall was valued at S$200m by Savills as at 31Jan21. On a pro-forma FY20 (Sep20) basis, the DPU dilution is 2.33% and NAV would rise by 0.8%. The divestment is in line with the manager’s proactive portfolio management strategy to optimise the trust's portfolio composition. Upon completion of the divestment, FCT's retail portfolio will comprise nine retail properties, all located in the suburbs of Singapore.</p><p>Comments: The S$220m offer price is ~16% higher than the latest book value (as at end FY20) and translates to S$2,986psf (based on NLA). It also represents a significant 75% upside from purchase price of S$125.7m in 2010.</p>

SingaporeFrasers Centrepoint Trust (FCT SP) to sell YewTee Point for S$220m; 75% upside from original purchase priceFCT will divest YewTee Point for S$220m, having entered into a sale-and-purchase agreement with an unrelated third party. The transaction is expected to be completed on 28May21. The sales proceed will be used to repay debts and lower gearing level. The Choa Chu Kang mall was valued at S$200m by Savills as at 31Jan21. On a pro-forma FY20 (Sep20) basis, the DPU dilution is 2.33% and NAV would rise by 0.8%. The divestment is in line with the manager’s proactive portfolio management strategy to optimise the trust's portfolio composition. Upon completion of the divestment, FCT's retail portfolio will comprise nine retail properties, all located in the suburbs of Singapore.Comments: The S$220m offer price is ~16% higher than the latest book value (as at end FY20) and translates to S$2,986psf (based on NLA). It also represents a significant 75% upside from purchase price of S$125.7m in 2010.

ASEAN Builder's Scoop - FCT to Sell YewTee Point; Activists at SSREIT Asked ESR to Buy Assets

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<p>Back on the 15 January, <a href="https://www.smartkarma.com/entities/guoco-group-ltd" target="_blank" data-smartkarma-citation="entities:5290:1" rel="noopener">Guoco Group Ltd (53 HK)</a> made a <a href="https://links.sgx.com/FileOpen/Offer%20Announcement.ashx?App=Announcement&amp;FileID=645181" target="_blank" rel="noopener">voluntary conditional cash Offer</a> for 70.84%-held <a href="https://www.smartkarma.com/entities/gl-ltd" target="_blank" data-smartkarma-citation="entities:2540:1" rel="noopener">GL Ltd (GLL SP)</a>. The Offer Price of S$0.70/share was a 25% premium to last close and 0.73x P/NAV. The Offer carried an acceptance condition of 90%, including Guoco's stake, which could be reduced to 50%. </p>
<p>It was a lacklustre Offer. The IFA agreed in the <a href="https://links.sgx.com/FileOpen/Revised_Offeree_Circular.ashx?App=Announcement&amp;FileID=648639" target="_blank" rel="noopener">Circular</a>, and said the Offer was not fair; but still opined it was reasonable. The Securities Investors Association (Singapore) (SIAS) <a href="https://sias.org.sg/latest-updates/letter-to-guocoleisure-holdings-limited-appeal-on-behalf-of-minority-shareholders-of-gl-limited/" target="_blank" rel="noopener">chimed in</a>, saying it thought the Offer was low-balled.</p>
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<p>Historically, Guoco have had a tendency to be frugal in their privatisation Offers. In its 2005 attempt to take GLL private back in 2005, it <em>did</em> bump its Offer to $1.25/share from S$1.20.</p>
<h3>The New News</h3>
<p>Guoco has now <a href="https://links.sgx.com/FileOpen/Dealings%20Disclosure%20and%20Revision%20of%20Offer%20Price%20Announcement.ashx?App=Announcement&amp;FileID=651983" target="_blank" rel="noopener">bumped the Offer</a> by 14.3% to S$0.80/share. The Offer consideration is final and the Offer declared unconditional in all respects.</p>
<p>Guoco has 83.4% in the bag, including its own 72.96% stake. The revised Offer terms fall outside the fair value range from the IFA, but there's probably enough here to test the 90% acceptance level, and afford Guoco the right to compulsory acquire shares. </p>
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<p>As always, more below the fold.</p>
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Back on the 15 January, Guoco Group Ltd (53 HK) made a voluntary conditional cash Offer for 70.84%-held GL Ltd (GLL SP). The Offer Price of S$0.70/share was a 25% premium to last close and 0.73x P/NAV. The Offer carried an acceptance condition of 90%, including Guoco's stake, which could be reduced to 50%. 
It was a lacklustre Offer. The IFA agreed in the Circular, and said the Offer was not fair; but still opined it was reasonable. The Securities Investors Association (Singapore) (SIAS) chimed in, saying it thought the Offer was low-balled.

Historically, Guoco have had a tendency to be frugal in their privatisation Offers. In its 2005 attempt to take GLL private back in 2005, it did bump its Offer to $1.25/share from S$1.20.
The New News
Guoco has now bumped the Offer by 14.3% to S$0.80/share. The Offer consideration is final and the Offer declared unconditional in all respects.
Guoco has 83.4% in the bag, including its own 72.96% stake. The revised Offer terms fall outside the fair value range from the IFA, but there's probably enough here to test the 90% acceptance level, and afford Guoco the right to compulsory acquire shares. 

As always, more below the fold.














GL Limited: Guoco Bumps & Declares Offer Unconditional

Singapore

GL Limited is an investment holding company.  The Company holds investments in the areas of hotels and resorts, and portfolio investments. GL also invests in property for residential and tourism purposes.

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GL Ltd (GLL SP)

Guoco (53 HK): Fourth Time's A Charm?

I like Guoco Group (53 HK) here either as a potential privatisation play from the Quek family or simply as a deep value play.

David Blennerhassett

SingHaiyi Group (SHG SP): Tang's Conditional Offer

The Offer has not been declared final. I think there's probably enough here to get the deal over the line. I would not chase this much through...

David Blennerhassett

StubWorld: Guoco/BEA Into Focus Post Chong Hing Bank Bid

Following the privatization Offer for Chong Hing, Bank of East Asia is back in focus. Guoco is trading cheap to its historical NAV discount range,...

David Blennerhassett

ASEAN Builder's Scoop - FCT to Sell YewTee Point; Activists at SSREIT Asked ESR to Buy Assets

Activists at SSREIT asked ESR to buy its assets; GLL to be acquired and delisted; Sheng Tai-IWG expands workspace in Melaka

SCCM Asia Research

GL Limited: Guoco Bumps & Declares Offer Unconditional

This will trade tight to, if not to terms. This is a done deal. If this trades a spread or two below terms, get involved. I still like Guoco here,...

David Blennerhassett

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