Index Rebal Trades & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal Trades & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

On 24th August 2020, India-based integrated logistics company <a href="https://www.smartkarma.com/entities/allcargo-logistics-ltd" target="_blank" data-smartkarma-citation="entities:10602:1" rel="noopener">Allcargo Logistics (AGLL IN)</a> announced they had received a “<a href="https://www.bseindia.com/xml-data/corpfiling/AttachHis/9bf60829-9be9-4e37-b6c2-234cc3203040.pdf" target="_blank" rel="noopener">Delisting Proposal Letter</a>" from members of its Promoter Group (Shashi Kiran Shetty and Talentos Entertainment Private Limited). A board meeting was convened on 27th August and a Merchant Banker (Inga Ventures) was appointed to carry out due diligence. On 5th September, the board approved the Offer after reviewing the Merchant Banker's due diligence report. These events were discussed in my previous insight <a href="https://www.smartkarma.com/insights/allcargo-logistics-agll-in-indian-delisting-offer-trading-cheap" target="_blank" data-smartkarma-citation="insights:43137" rel="noopener">Allcargo Logistics (AGLL IN): Indian Delisting Offer Trading Cheap</a>. After market-close on 22nd October, the company <a href="https://www.bseindia.com/stock-share-price/allcargo-logistics-ltd/allcargo/532749/voting-results/" target="_blank" rel="noopener">announced</a> the voting results for the delisting offer which confirmed that the shareholders have approved the transaction. Below is a closer look at the voting results and their potential implications regarding the probability of Deal Completion.

On 24th August 2020, India-based integrated logistics company Allcargo Logistics (AGLL IN) announced they had received a “Delisting Proposal Letter" from members of its Promoter Group (Shashi Kiran Shetty and Talentos Entertainment Private Limited). A board meeting was convened on 27th August and a Merchant Banker (Inga Ventures) was appointed to carry out due diligence. On 5th September, the board approved the Offer after reviewing the Merchant Banker's due diligence report. These events were discussed in my previous insight Allcargo Logistics (AGLL IN): Indian Delisting Offer Trading Cheap. After market-close on 22nd October, the company announced the voting results for the delisting offer which confirmed that the shareholders have approved the transaction. Below is a closer look at the voting results and their potential implications regarding the probability of Deal Completion. 

Allcargo Logistics (AGLL IN): Shareholder Vote Encouraging. Buying Opportunity.

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

This morning, Baring - the Bidder for <a href="https://www.smartkarma.com/entities/hexaware-technologies-ltd" target="_blank" data-smartkarma-citation="entities:7882:1" rel="noopener">Hexaware Technologies (HEXW IN)</a> (also known as HT Global IT Solutions Holdings Limited) announced that they had accepted the Discovered Price of Rs. 475/share. <div class="content-remarks">Those who followed Smartkarma advice and bought the week after shares jumped to limit up on Day1 earned a return of about 50% in USD terms (48% in INR terms and about 2.5% in the FX cross).</div>The Acquirer will now purchase 87,286,523 shares - 91.16% of the fully paid up capital - which is the number of shares validly tendered at or below the Discovered Price in the Reverse Book Build portion of the Delisting Offer. Shares accepted will have the consideration paid on or before 30 September 2020. Section 20 of the <a href="https://www.bseindia.com/xml-data/corpfiling/AttachHis/486ec4be-8eea-4549-8302-90ab70254072.pdf" target="_blank" rel="noopener">Letter of Offer</a> published on 6 September suggests payment on 29 September 2020 though the amended schedule published 15 September makes it 30 September. Those shares which have not been taken up, which should amount to just under 2.3mm shares, will be returned to shareholders as per Paragraph 17 of the <a href="https://www.bseindia.com/xml-data/corpfiling/AttachHis/486ec4be-8eea-4549-8302-90ab70254072.pdf" target="_blank" rel="noopener">Letter of Offer</a> published on 6 September, and Section 20 of the same document, <a href="https://www.bseindia.com/xml-data/corpfiling/AttachHis/D937142A-F84B-40FD-83B4-92443D696743-202611.pdf" target="_blank" rel="noopener">as amended on 15 September</a>, suggests that shares will be returned to investors on the 30th. That leaves 8.84% of the company in limbo. The shares will be delisted on a date to be announced later. Expect it to be in the not distant future. There will be a process for a subsequent Exit Offer.  That means there will be a residual opportunity to trade the risk arb for about 26.5mm shares worth about US$170mm at terms.More below the fold.

This morning, Baring - the Bidder for Hexaware Technologies (HEXW IN) (also known as HT Global IT Solutions Holdings Limited) announced that they had accepted the Discovered Price of Rs. 475/share. Those who followed Smartkarma advice and bought the week after shares jumped to limit up on Day1 earned a return of about 50% in USD terms (48% in INR terms and about 2.5% in the FX cross).The Acquirer will now purchase 87,286,523 shares - 91.16% of the fully paid up capital - which is the number of shares validly tendered at or below the Discovered Price in the Reverse Book Build portion of the Delisting Offer. Shares accepted will have the consideration paid on or before 30 September 2020. Section 20 of the Letter of Offer published on 6 September suggests payment on 29 September 2020 though the amended schedule published 15 September makes it 30 September. Those shares which have not been taken up, which should amount to just under 2.3mm shares, will be returned to shareholders as per Paragraph 17 of the Letter of Offer published on 6 September, and Section 20 of the same document, as amended on 15 September, suggests that shares will be returned to investors on the 30th. That leaves 8.84% of the company in limbo. The shares will be delisted on a date to be announced later. Expect it to be in the not distant future. There will be a process for a subsequent Exit Offer.  That means there will be a residual opportunity to trade the risk arb for about 26.5mm shares worth about US$170mm at terms.More below the fold.

Hexaware Tech Done at INR 475. Now For The Residual

<a href="https://www.smartkarma.com/entities/hexaware-technologies-ltd" target="_blank" data-smartkarma-citation="entities:7882:1" rel="noopener">Hexaware Technologies (HEXW IN)</a> took it down to the wire. The Reverse Book Build got to the 90.0% threshold at a little past 2:30pm local time, and small shareholders continued putting in offers until 5pm local time. It looks, from a combination of the <a href="https://www.bseindia.com/markets/publicIssues/BSEBidDetails_ACQ.aspx?flag=ec&amp;Scripcode=5222" target="_blank" rel="noopener">BSE data</a> and <a href="https://www.nseindia.com/market-data/tender-issue-information?symbol=HEXAWARE&amp;type=Active" target="_blank" rel="noopener">NSE data</a> that we have a Discovered Price. Now we wait. More comment below the fold.

Hexaware Technologies (HEXW IN) took it down to the wire. The Reverse Book Build got to the 90.0% threshold at a little past 2:30pm local time, and small shareholders continued putting in offers until 5pm local time. It looks, from a combination of the BSE data and NSE data that we have a Discovered Price. Now we wait. More comment below the fold. 

Hexaware Exit Offer Reverse Book Build Gets 90% & Discovered Price - Now We Wait

On Thursday 3 September at mid-day, <a href="https://www.smartkarma.com/entities/hexaware-technologies-ltd" target="_blank" data-smartkarma-citation="entities:7882:1" rel="noopener">Hexaware Technologies (HEXW IN)</a> announced that the Exchange had granted <a href="https://www.bseindia.com/xml-data/corpfiling/AttachHis/5ee986c3-fb2e-479d-bf32-3bbdde0f94c4.pdf" target="_blank" rel="noopener">In-Principle Approval</a> the day before. Hexaware's <a href="https://www.bseindia.com/xml-data/corpfiling/AttachHis/5ee986c3-fb2e-479d-bf32-3bbdde0f94c4.pdf" target="_blank" rel="noopener">Public Announcement</a> went out on the 3rd. 
The completion of the <a href="https://www.bseindia.com/xml-data/corpfiling/AttachLive/486ec4be-8eea-4549-8302-90ab70254072.pdf" target="_blank" rel="noopener">Despatch of the Offer Letter</a> was announced on 6 September.
The Reverse Book Build Auction will open on the 9th of September and close on the 15th.  The last possible day to announce a counter-offer would be the 17th of September. Settlement would be expected to be the 29 September. 
It's on. 
I see Mooar Gainz here.
<hr>
<table class="table table-striped">
<tbody>
<tr>
<td colspan="3" style="width: 724.8px;">
<h3>Relevant Insights To Date</h3>
</td>
</tr>
<tr>
<td style="width: 72px;">Date</td>
<td style="width: 134.4px;">Theme or Ticker</td>
<td style="width: 476.8px;">Insight Title</td>
</tr>
<tr>
<td style="width: 72px;">2019</td>
<td style="width: 134.4px;">Indian M&amp;A Guide</td>
<td style="width: 476.8px;">
<a href="https://www.smartkarma.com/insights/quiddity-india-m-a-guide-2019" target="_blank" data-smartkarma-citation="insights:30885" rel="noopener">Quiddity India M&amp;A Guide 2019</a> </td>
</tr>
<tr>
<td style="width: 72px;">24 May 2020</td>
<td style="width: 134.4px;">Delisting Offers</td>
<td style="width: 476.8px;">
<a href="https://www.smartkarma.com/insights/indian-delisting-exit-offers-know-your-process-and-the-games-played" target="_blank" data-smartkarma-citation="insights:39683" rel="noopener">Indian Delisting/Exit Offers - Know Your Process and The Games Played</a> </td>
</tr>
<tr>
<td style="width: 72px;">19 Jun 2020</td>
<td style="width: 134.4px;">Failed Exit Offers</td>
<td style="width: 476.8px;">
<a href="https://www.smartkarma.com/insights/failed-exit-offers-in-india-lessons-for-vedl-adani-and-hexw" target="_blank" data-smartkarma-citation="insights:40492" rel="noopener">Failed Exit Offers in India: Lessons for VEDL, ADANI, and HEXW?</a> </td>
</tr>
<tr>
<td style="width: 72px;">8 Jun 2020</td>
<td style="width: 134.4px;">Hexaware Tech</td>
<td style="width: 476.8px;">
<a href="https://www.smartkarma.com/insights/hexaware-delisting-proposal-this-could-go-higher" target="_blank" data-smartkarma-citation="insights:40116" rel="noopener">Hexaware Delisting Proposal - This Could Go Higher</a> </td>
</tr>
<tr>
<td style="width: 72px;">11 Jun 2020</td>
<td style="width: 134.4px;">Hexaware Tech</td>
<td style="width: 476.8px;">
<a href="https://www.smartkarma.com/insights/hexaware-dips-and-doodles-in-the-delisting-proposal-process" target="_blank" data-smartkarma-citation="insights:40219" rel="noopener">Hexaware:  Dips and Doodles in the Delisting Proposal Process</a> </td>
</tr>
</tbody>
</table>

On Thursday 3 September at mid-day, Hexaware Technologies (HEXW IN) announced that the Exchange had granted In-Principle Approval the day before. Hexaware's Public Announcement went out on the 3rd. 
The completion of the Despatch of the Offer Letter was announced on 6 September.
The Reverse Book Build Auction will open on the 9th of September and close on the 15th.  The last possible day to announce a counter-offer would be the 17th of September. Settlement would be expected to be the 29 September. 
It's on. 
I see Mooar Gainz here.





Relevant Insights To Date



Date
Theme or Ticker
Insight Title


2019
Indian M&amp;A Guide

Quiddity India M&amp;A Guide 2019 


24 May 2020
Delisting Offers

Indian Delisting/Exit Offers - Know Your Process and The Games Played 


19 Jun 2020
Failed Exit Offers

Failed Exit Offers in India: Lessons for VEDL, ADANI, and HEXW? 


8 Jun 2020
Hexaware Tech

Hexaware Delisting Proposal - This Could Go Higher 


11 Jun 2020
Hexaware Tech

Hexaware:  Dips and Doodles in the Delisting Proposal Process 




Hexaware Technologies Reverse Book Build Auction - It's On

INEOS Styrolution India Limited / Event-Driven

The Reverse Book Build process for the Delisting Offer of <a href="https://www.smartkarma.com/entities/ineos-styrolution-india-limited" target="_blank" data-smartkarma-citation="entities:1868:1" rel="noopener">INEOS Styrolution India Limited (INEOS IN)</a> is now complete. The Offer-to-Buy Acquisition Window (which is really an Offer to Sell reverse auction window) closed today with 2,918,055 shares offered in 1,877 offers across 192 different price points ranging from INR 419 - the Floor Price - to INR 4,190 which is ten times the Floor Price. The total submitted is 66.37% of the float.Only 60.00002% was required to form a Discovered Price.Now the question is whether the buyer, INEOS, will agree to the Discovered Price and complete the transaction, or whether they will reject it. IF they reject it, they have two days to propose a Counter Offer.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/147/410/original/Screenshot%202020-07-22%20at%209.24.52%20PM.png?1595424394" class="editor-image img-responsive" data-smartkarma-image-id="147410"></figure>As the (yellow) chart above shows, in the final minutes of trading today, shares popped sharply (from INR 810 to INR 885) as it looked more and more like there would be a Discovered Price well above the recent trading price.There are no announcements yet. So now we wait.More below.<hr>The setup in this case was described in <a href="https://www.smartkarma.com/insights/ineos-styrolution-india-a-tiny-delisting-to-watch-how-the-rbb-sausage-is-made" target="_blank" data-smartkarma-citation="insights:41251" rel="noopener">INEOS Styrolution India - A Tiny Delisting to Watch How the RBB Sausage Is Made</a> and these situations are described in greater detail in <a href="https://www.smartkarma.com/insights/indian-delisting-exit-offers-know-your-process-and-the-games-played" target="_blank" data-smartkarma-citation="insights:39683" rel="noopener">Indian Delisting/Exit Offers - Know Your Process and The Games Played</a> and <a href="https://www.smartkarma.com/insights/failed-exit-offers-in-india-lessons-for-vedl-adani-and-hexw" target="_blank" data-smartkarma-citation="insights:40492" rel="noopener">Failed Exit Offers in India: Lessons for VEDL, ADANI, and HEXW?</a>. An Indian M&amp;A Guide is available <a href="https://www.smartkarma.com/insights/quiddity-india-m-a-guide-2019" target="_blank" rel="noopener">here</a>.

The Reverse Book Build process for the Delisting Offer of INEOS Styrolution India Limited (INEOS IN) is now complete. The Offer-to-Buy Acquisition Window (which is really an Offer to Sell reverse auction window) closed today with 2,918,055 shares offered in 1,877 offers across 192 different price points ranging from INR 419 - the Floor Price - to INR 4,190 which is ten times the Floor Price. The total submitted is 66.37% of the float.Only 60.00002% was required to form a Discovered Price.Now the question is whether the buyer, INEOS, will agree to the Discovered Price and complete the transaction, or whether they will reject it. IF they reject it, they have two days to propose a Counter Offer.As the (yellow) chart above shows, in the final minutes of trading today, shares popped sharply (from INR 810 to INR 885) as it looked more and more like there would be a Discovered Price well above the recent trading price.There are no announcements yet. So now we wait.More below.The setup in this case was described in INEOS Styrolution India - A Tiny Delisting to Watch How the RBB Sausage Is Made and these situations are described in greater detail in Indian Delisting/Exit Offers - Know Your Process and The Games Played and Failed Exit Offers in India: Lessons for VEDL, ADANI, and HEXW?. An Indian M&amp;A Guide is available here.  

INEOS Styrolution - Looks Like We Have a Price. Now We Wait For The Promoter's Answer

India

Hexaware Technologies Limited specializes in providing its clients with management and technology solutions in the enterprise applications software area. The Company also operates as an offshore-based vendor for the ERP and CRM software products of PeopleSoft, Inc. of U.S.A.

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Hexaware Technologies (HEXW IN)

Allcargo Logistics (AGLL IN): Shareholder Vote Encouraging. Buying Opportunity.

The Allcargo Logistics Delisting Proposal has passed its shareholder vote and appears on track. Timing from now could be a few months to longer....

Janaghan Jeyakumar, CFA

Hexaware Tech Done at INR 475. Now For The Residual

This morning, The Bidder for Hexaware Technologies (HEXW IN)

Travis Lundy

Hexaware Exit Offer Reverse Book Build Gets 90% & Discovered Price - Now We Wait

Hexaware Technologies (HEXW IN) took it down to the

Travis Lundy

Hexaware Technologies Reverse Book Build Auction - It's On

On Thu

Travis Lundy

INEOS Styrolution - Looks Like We Have a Price. Now We Wait For The Promoter's Answer

The Reverse Book Build process for the Delisting Offer of INEOS Styrolution India Limited (INEOS IN) is now complete. The Offer-to-Buy Acquisition...

Travis Lundy

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