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.

Event-Driven

<ul>
<li>The <a href="https://www.smartkarma.com/entities/first-media-tbk-pt" target="_blank" data-smartkarma-citation="entities:11826:1" rel="noopener">First Media (KBLV IJ)</a> EGM on 8 June approved the sale of <a href="https://www.smartkarma.com/entities/link-net-tbk-pt" target="_blank" data-smartkarma-citation="entities:1050:1" rel="noopener">Link Net (LINK IJ)</a> shares to Axiata Investments and <a href="https://www.smartkarma.com/entities/xl-axiata-tbk-pt" target="_blank" data-smartkarma-citation="entities:15028:1" rel="noopener">XL Axiata (EXCL IJ)</a>. </li>
<li>The conditions precedent for the sale purchase agreement (SPA) to sell 66.03% of Link Net shares to Axiata Investments and XL Axiata are satisfied. The completion date is 2Q.</li>
<li>The subsequent MTO completes in 3Q. At the last close, the gross and annualised spread of the MTO price for a 3Q completion is 5.3% and 16.8%, respectively.</li>
</ul>


The First Media (KBLV IJ) EGM on 8 June approved the sale of Link Net (LINK IJ) shares to Axiata Investments and XL Axiata (EXCL IJ). 
The conditions precedent for the sale purchase agreement (SPA) to sell 66.03% of Link Net shares to Axiata Investments and XL Axiata are satisfied. The completion date is 2Q.
The subsequent MTO completes in 3Q. At the last close, the gross and annualised spread of the MTO price for a 3Q completion is 5.3% and 16.8%, respectively.


First Media’s EGM Approval Paves the Way for the Link MTO at IDR4,800

<ul>
<li>The <a href="https://www.smartkarma.com/entities/axiata-group-berhad" target="_blank" data-smartkarma-citation="entities:944:1" rel="noopener">Axiata Group (AXIATA MK)</a> EGM narrowly approved the ordinary resolution relating to the proposed acquisition of <a href="https://www.smartkarma.com/entities/link-net-tbk-pt" target="_blank" data-smartkarma-citation="entities:1050:1" rel="noopener">Link Net (LINK IJ)</a> shares and the proposed MTO. </li>
<li>The next catalyst is the <a href="https://www.smartkarma.com/entities/first-media-tbk-pt" target="_blank" data-smartkarma-citation="entities:11826:1" rel="noopener">First Media (KBLV IJ)</a>’s EGM to approve the transaction on 6 June. The proposed MTO at IDR4,800 per share is targeted to complete by 3Q. </li>
<li>BNM regulatory approval was received on 12 April. At the last close, the gross and annualised spread of the MTO price for a 3Q completion is 4.6% and 13.1%, respectively.</li>
</ul>


The Axiata Group (AXIATA MK) EGM narrowly approved the ordinary resolution relating to the proposed acquisition of Link Net (LINK IJ) shares and the proposed MTO. 
The next catalyst is the First Media (KBLV IJ)’s EGM to approve the transaction on 6 June. The proposed MTO at IDR4,800 per share is targeted to complete by 3Q. 
BNM regulatory approval was received on 12 April. At the last close, the gross and annualised spread of the MTO price for a 3Q completion is 4.6% and 13.1%, respectively.


Axiata Gains Approval for the Link Net MTO; Next up Is First Media’s EGM on 6 June

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

Converge Information and Commu / Equity Capital Markets

<ul>
<li>Warburg Pincus, aims to raise around US$138m via selling its 3.6% in Converge ICT (CICT). The sale will be accompanied by a company buyback and a private transaction.</li>
<li>Warburg had earlier sold in the IPO and then in Nov 21, and this trade will be a cleanup.</li>
<li>In this note, we will run the deal through our ECM framework.</li>
</ul>


Warburg Pincus, aims to raise around US$138m via selling its 3.6% in Converge ICT (CICT). The sale will be accompanied by a company buyback and a private transaction.
Warburg had earlier sold in the IPO and then in Nov 21, and this trade will be a cleanup.
In this note, we will run the deal through our ECM framework.


Converge ICT Placement - Clean-Up and Buyback, Just in Time for the Index Inclusion

<ul>
<li>
<a href="https://www.bloomberg.com/news/articles/2022-05-18/hong-kong-telco-hkbn-said-to-draw-interest-from-stonepeak-pag" target="_blank" rel="noopener">Bloomberg reported</a><a href="https://www.smartkarma.com/entities/kkr-co-inc" target="_blank" data-smartkarma-citation="entities:27333:1" rel="noopener">KKR &amp; Co Inc (KKR US)</a> and PAG are carrying out due diligence on <a href="https://www.smartkarma.com/entities/hkbn-ltd" target="_blank" data-smartkarma-citation="entities:289:1" rel="noopener">HKBN Ltd (1310 HK)</a>, with a view to launching a privatisation bid.</li>
<li>HKBN has a relatively concentrated shareholder register which suggests a requirement for a high takeover premium.</li>
<li>Precedent transactions suggest a privatisation forward EV/EBITDA multiple of at least 10x, implying a minimum offer price of HK$11.80 per share, a 23% premium to the last close. </li>
</ul>



Bloomberg reportedKKR &amp; Co Inc (KKR US) and PAG are carrying out due diligence on HKBN Ltd (1310 HK), with a view to launching a privatisation bid.
HKBN has a relatively concentrated shareholder register which suggests a requirement for a high takeover premium.
Precedent transactions suggest a privatisation forward EV/EBITDA multiple of at least 10x, implying a minimum offer price of HK$11.80 per share, a 23% premium to the last close. 


<ul>
<li>At the last close prices, <a href="https://www.smartkarma.com/entities/total-access-communication" target="_blank" data-smartkarma-citation="entities:948:1" rel="noopener">Total Access Communication (DTAC TB)</a> and <a href="https://www.smartkarma.com/entities/true-corp-pcl" target="_blank" data-smartkarma-citation="entities:8:1" rel="noopener">True Corp Pcl (TRUE TB)</a>’s gross spread to the dividend-adjusted VTO price is 5.6% and 11.1%, respectively.  </li>
<li>The merger has received DTAC and True shareholder approvals. The merger hinges on regulatory approval.</li>
<li>The LONG True and SHORT DTAC trade is attractive, with the current spread of 5.5% trading above the average spread since the merger announcement of 3.4% (ex. transaction costs).</li>
</ul>


At the last close prices, Total Access Communication (DTAC TB) and True Corp Pcl (TRUE TB)’s gross spread to the dividend-adjusted VTO price is 5.6% and 11.1%, respectively.  
The merger has received DTAC and True shareholder approvals. The merger hinges on regulatory approval.
The LONG True and SHORT DTAC trade is attractive, with the current spread of 5.5% trading above the average spread since the merger announcement of 3.4% (ex. transaction costs).


Philippines

Globe Telecom, Inc. provides wireless application protocol services and digital wireless communication services via GSM network. The Company also offers service which allows users access to a wide range of information and services via a user-friendly menu. In addition, Globe  provides wire line voice and data services.

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Globe Telecom (GLO PM)

First Media’s EGM Approval Paves the Way for the Link MTO at IDR4,800

Conditions precedent for the SPA are satisfied. At the last close, the annualised spread of the MTO price for a 3Q completion is 16.8%.

Arun George

Axiata Gains Approval for the Link Net MTO; Next up Is First Media’s EGM on 6 June

The MTO was narrowly approved at the Axiata EGM. The next catalyst is the First Media EGM on 6 June. At the last close, the annualised spread of...

Arun George

Converge ICT Placement - Clean-Up and Buyback, Just in Time for the Index Inclusion

Warburg Pincus, aims to raise around US$138m via selling its 3.6% in Converge ICT (CICT). The sale will be accompanied by a company buyback and a...

Sumeet Singh

HKBN in the Crosshairs of KKR and PAG

Bloomberg reported that KKR and PAG could launch a privatisation bid. Precedent transactions suggest a privatisation forward EV/EBITDA multiple of...

Arun George

DTAC/True Merger VTO Risk/Reward

The DTAC/True merger hinges on regulatory approval. The LONG True and SHORT DTAC trade is attractive, with the current spread to the div-adjusted...

Arun George

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