Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Back in March of last year, Bloomberg reported,that Renaldo Santosa and his family, who collectively controlled ~75.5% of agri-play <a href="https://www.smartkarma.com/entities/japfa-ltd" target="_blank" data-smartkarma-citation="entities:15597:1" rel="noopener">Japfa Ltd (JAP SP)</a>, were considering taking Japfa private.</li>
<li>This was discussed in<a href="https://www.smartkarma.com/compose/insight/174028/%20https:/skr.ma/iKVsA" target="_blank" rel="noopener"> Japfa (JAP SP): Impressive Gain. But No Firm Offer</a>. Then crickets. </li>
<li>The family has now pitched an Offer of S$0.62/share, by way of  a Scheme, a 34.8% premium to undisturbed. That's probably enough to get this over the line. </li>
</ul>


Back in March of last year, Bloomberg reported,that Renaldo Santosa and his family, who collectively controlled ~75.5% of agri-play Japfa Ltd (JAP SP), were considering taking Japfa private.
This was discussed in Japfa (JAP SP): Impressive Gain. But No Firm Offer. Then crickets. 
The family has now pitched an Offer of S$0.62/share, by way of  a Scheme, a 34.8% premium to undisturbed. That's probably enough to get this over the line. 


Japfa (JAP SP): The Santosa Family (Finally) Makes A Move

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/japfa-ltd" target="_blank" data-smartkarma-citation="entities:15597:1" rel="noopener">Japfa Ltd (JAP SP)</a> disclosed privatisation through a scheme of arrangement from the Santosa family at S$0.62 per share, a 34.8% premium, to the undisturbed price of S$0.460.</li>
<li>While the offer is attractive compared to historical share price ranges, it is light compared to peer and historical multiples.</li>
<li>The offer has not been declared final. However, the irrevocable, the lack of a disinterested shareholder holding a blocking stake and moderate retail ownership minimises the vote risk.  </li>
</ul>



Japfa Ltd (JAP SP) disclosed privatisation through a scheme of arrangement from the Santosa family at S$0.62 per share, a 34.8% premium, to the undisturbed price of S$0.460.
While the offer is attractive compared to historical share price ranges, it is light compared to peer and historical multiples.
The offer has not been declared final. However, the irrevocable, the lack of a disinterested shareholder holding a blocking stake and moderate retail ownership minimises the vote risk.  


Japfa (JAP SP): Santosa Family’s S$0.62 Scheme Offer

<ul>
<li>Cuscaden Peak, the sponsor of <a href="https://www.smartkarma.com/entities/paragon-reit" target="_blank" data-smartkarma-citation="entities:5994:1" rel="noopener">Paragon REIT (PGNREIT SP)</a> and 61.5% shareholder, has offered S$0.98/unit, in cash; or S$1.003/unit, a 7% premium to NAV, when including FY24's S$0.0233/unit cash distribution.</li>
<li>The Offer is by way of a Scheme. The Offer price has NOT been declared final. A switch option into a voluntary Offer is afforded should a competing Offer emerge.</li>
<li>Looks pretty clean. Assuming mid-late May payment, pay up to S$0.97/share for a 4%/15% gross/annualised spread. It may trade tighter given the early distribution payment.</li>
</ul>


Cuscaden Peak, the sponsor of Paragon REIT (PGNREIT SP) and 61.5% shareholder, has offered S$0.98/unit, in cash; or S$1.003/unit, a 7% premium to NAV, when including FY24's S$0.0233/unit cash distribution.
The Offer is by way of a Scheme. The Offer price has NOT been declared final. A switch option into a voluntary Offer is afforded should a competing Offer emerge.
Looks pretty clean. Assuming mid-late May payment, pay up to S$0.97/share for a 4%/15% gross/annualised spread. It may trade tighter given the early distribution payment.


Paragon REIT (PGNREIT SP)'s Privatisation Offer

<ul>
<li>The precondition for the PAG privatisation offer for <a href="https://www.smartkarma.com/entities/shandong-fengxiang-co-ltd-h" target="_blank" data-smartkarma-citation="entities:29164:1" rel="noopener">Shandong Fengxiang (9977 HK)</a> is satisfied. The composite document will be despatched by 11 July. </li>
<li>Despite being a 39.9% discount to the IPO price, the offer is attractive compared to precedent transactions and peer multiples. </li>
<li>The scheme vote remains low-risk due to the irrevocables, the lack of protest votes at the recent AGM, and the signalling from PAG’s decision not to introduce a scrip offer. </li>
</ul>


The precondition for the PAG privatisation offer for Shandong Fengxiang (9977 HK) is satisfied. The composite document will be despatched by 11 July. 
Despite being a 39.9% discount to the IPO price, the offer is attractive compared to precedent transactions and peer multiples. 
The scheme vote remains low-risk due to the irrevocables, the lack of protest votes at the recent AGM, and the signalling from PAG’s decision not to introduce a scrip offer. 


Fengxiang (9977 HK): Precondition Satisfied

<ul>
<li>PAG has decided not to introduce the share alternative offer. Therefore, its offer for <a href="https://www.smartkarma.com/entities/shandong-fengxiang-co-ltd-h" target="_blank" data-smartkarma-citation="entities:29164:1" rel="noopener">Shandong Fengxiang (9977 HK)</a> will be all-cash at HK$2.00 per H share.</li>
<li>The recent Goldlion and Soundwill deal breaks have undoubtedly increased the vote risk, particularly as the blocking stake is below the HKEx substantial shareholder disclosure threshold. </li>
<li>The decision not to introduce the share alternative offer underscores PAG's confidence in the vote. The lack of protest votes at the recent AGM is helpful for the scheme vote. </li>
</ul>


PAG has decided not to introduce the share alternative offer. Therefore, its offer for Shandong Fengxiang (9977 HK) will be all-cash at HK$2.00 per H share.
The recent Goldlion and Soundwill deal breaks have undoubtedly increased the vote risk, particularly as the blocking stake is below the HKEx substantial shareholder disclosure threshold. 
The decision not to introduce the share alternative offer underscores PAG's confidence in the vote. The lack of protest votes at the recent AGM is helpful for the scheme vote. 


Fengxiang (9977 HK): No Share Alternative Offer

Singapore

Japfa Ltd. operates in the agricultural industry. The Company breeds and processes chicken, pork and beef. Japfa also operates dairy farms.

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Japfa Ltd (JAP SP)

Japfa (JAP SP): The Santosa Family (Finally) Makes A Move

Scheme Doc dispatched. 15th April Scheme Meeting. Payment on or around the 30th May. With a fair value range of S$0.53 to S$0.56/share, the IFA...

David Blennerhassett

Japfa (JAP SP): Santosa Family’s S$0.62 Scheme Offer

The offer is arguably light. However, the irrevocable, the lack of a disinterested shareholder holding a blocking stake and moderate retail...

Arun George

Paragon REIT (PGNREIT SP)'s Privatisation Offer

Looks pretty clean. A 7% premium to NAV and a roughly two-year high. If payment on or around late May, I'd pay up to S$0.97/share for a gross...

David Blennerhassett

Fengxiang (9977 HK): Precondition Satisfied

The composite document is out. The IFA opines that PAG’s offer (HK$2.00 per H share) is fair and reasonable. The vote is on 24 July. At the last...

Arun George

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Japfa (JAP SP): The Santosa Family (Finally) Makes A Move

Scheme Doc dispatched. 15th April Scheme Meeting. Payment on or around the 30th May. With a fair value range of S$0.53 to S$0.56/share, the IFA...

David Blennerhassett

Japfa (JAP SP): Santosa Family’s S$0.62 Scheme Offer

The offer is arguably light. However, the irrevocable, the lack of a disinterested shareholder holding a blocking stake and moderate retail...

Arun George

Paragon REIT (PGNREIT SP)'s Privatisation Offer

Looks pretty clean. A 7% premium to NAV and a roughly two-year high. If payment on or around late May, I'd pay up to S$0.97/share for a gross...

David Blennerhassett

Fengxiang (9977 HK): Precondition Satisfied

The composite document is out. The IFA opines that PAG’s offer (HK$2.00 per H share) is fair and reasonable. The vote is on 24 July. At the last...

Arun George

Fengxiang (9977 HK): No Share Alternative Offer

The decision not to introduce the share alternative offer underscores PAG's confidence in the vote. For an end-of-Nov payment, the gross/annualised...

Arun George