Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven


For the month of October, 18 new deals (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$10bn.



Clicking on the company name in the table below will take you to the entity page where you can read the initial insight(s) written by Smartkarma contributors on these new deals and follow-up discussions, or simply click on the insight link(s) below the name.







New Deals


Industry


Size (US$bn)


Type


Premium




Australia




Apollo Consolidated (AOP AU) 
Gold
0.1
Off-market Takeover
27%


Ramelius (RMS AU) Adds Apollo To Its Portfolio



Aventus Group (AVN AU) 
Real estate
0.3
Scheme
N/A


HomeCo Daily Needs REIT (HDN AU) To Merge with Aventus (AVN AU) In Self-Takeunder



Cashrewards (CRW AU) 
Online shopping
0.1
Scheme
19.5%


Cashrewards (CRW AU)'s Offer Is 34% Below Last December's IPO



Class Ltd (CL1 AU) 
Cloud accounting
0.3
Scheme
71.6%


Class - Hub24: Scheme Trading Wide



Irongate Group (IAP AU) 
Real estate
0.7
Scheme
10%


Irongate (IAP AU): 360 Capital's Tilt Reminiscent Of ARA/Cromwell Stoush



Intega Group Ltd (ITG AU) 
Construction
0.3
Scheme
95%


Intega (ITG AU) Enters Scheme With Kiwa



Over the Wire Holdings Ltd (OTW AU) 
Telco/It provider
0.3
Scheme
15%


 Over The Wire (OTW AU): The Latest Aussie IT Play



Senex Energy (SXY AU) 
Gas producer
0.6
Off-market Takeover
40%


 Senex (SXY AU): Posco's Looming Offer



Hong Kong




Ausnutria Dairy Corp (1717 HK) 
Infant formula
0.7
MGO
13.67%


Yili's Pre-Conditional Offer &amp; Ausnutria (1717 HK)'s Crowded Register



Chinese Estates Holdings (127 HK) 
Real estate
0.3
Scheme
37.9%


Chinese Estates (127 HK): $4.00/Share Offer



Cp Pokphand (43 HK) 
Agri play
0.9
Scheme
19.79%


C.P. Pokphand (43 HK): Privatisation Offer From CP Foods



Dragon Crown Group (935 HK) 
Chemical storage
0.2
Pre-con Offer
8.475


Dragon Crown (935 HK)'s VGO Is A Done Deal



Yorkey Optical International Cayman (2788 HK) 
Optics
0.1
Scheme
54.4%



Yorkey Optical (2788 HK)'s Scheme: What Will Webb Do? Yorkey Optical (2788 HK): Webb Bumps... Will Asia Optical? Yorkey Optical (2788 HK): Time To Buy




Japan




Ebook Initiative Japan Co Ltd (3658 JP) 
Digital books
0.2
Tender Offer
4.6%


E-Book Initiative (3658 JP) Tender Offer Takeout - This One Needs Cowbell Too



Pipedo HD Inc (3919 JP) 
Info platform
0.1
Tender Offer
N/A


 Pipedo HD (3919 JP): Advantage Partners MBO




Singapore




ESR-REIT (EREIT SP) /ARA LOGOS (ALLT SP)

Property
1.0
Scheme
N/A


ARA Logos (ALLT SP) To Merge with ESR-REIT (EREIT SP)



Singapore Press Holdings (SPH SP) 
Conglomerate
2.5
Scheme
10%


SPH Lobang - Holders So Shiok, Bidders So Kiasu. This May Not Be The End



Taiwan




IBF Financial (2889 TT) / Entie Commercial Bank (2849 TT) 
Finance
1.2
Share swap
N/A


20-Oct: EnTie (2849 TT) - IBF (2889 TT): US$1.2bn Cash &amp; Scrip Deal Far From Done



Source: Smartkarma Insights






The average premium for the new deals announced (or first discussed) in October was ~30%, with a year-to-date average of ~32% (139 deals &amp; total deal size of US$259bn).
This compares to the average premium for all deals in 2020 (158 deals) and 2019 (145 deals) of 31% and 31.5% respectively.




Offer Premium Summary





     




2019


2020


2021 YTD



Australia
33.0%
32.4%
36.0%


Hong Kong
25.2%
34.7%
32.2%


Japan
44.0%
35.2%
27.4%


ROW
29.1%
24.2%
32.5%


Average
31.5%
31.1%
32.2%



Source: Smartkarma Insights









Summary of News in October of Arb Situations On Smartkarma's Radar



(Again, click on the company names to take to you to the insights and/or discussion posts for a more comprehensive read-through on each situation)






Australia


Comments (with links to announcements &amp; insights)




1300 Smiles Ltd (ONT AU) 

13-Oct Scheme Booklet registered with ASIC. Scheme meeting to be held on the 12 November.




5G Networks Ltd/Australia (5GN AU) / Webcentral (WCG AU) 

1-Oct: The Federal Court of Australia has approved the convening of Scheme Meeting and distribution of Scheme Booklet. The Scheme Meeting will be held virtually at 10:00am (Melbourne time) on Monday, 8 November 2021. Indicative Timeline is shown in the image below.




Afterpay Touch (APT AU) 

No October update




Ale Property (LEP AU) 

20-Oct: Ale Property (LEP AU) is suspended "pending release of a judgement of the Supreme Court of Victoria in relation to the 2018 Rent Determinations as advised by ASX announcement on 19 October 2021". Some background on this can be found on page 12 of the 2021 annual report. According to Philip Cheetham, Head Of Listed Investor Relations at Charter Hall Long Wale Reit (CLW AU):"The outcome of this litigation does not form a defeating condition or alter our bid for LEP."




Ausnet Services (AST AU) 

15-Oct: Ausnet Services (AST AU) announces that it proposes to engage with APA Group (APA AU) on its indicative, non-binding and conditional proposal. This follows the decision and final orders announced by the Takeovers Panel in response to the application previously submitted by APA.  25-Oct: Ausnet Services (AST AU) has announced that they have granted due diligence access to APA Group (APA AU) and have been granted reverse due diligence access.  29-Oct: AusNet (AST AU): ACCC Commences Informal Review




Australian Pharmaceutical Industries (API AU) 

7-Oct: Pursuant to an undertaking agreement with Washington H. Soul Pattinson and Co. Ltd (SOL AU), Wesfarmers Ltd (WES AU) has now taken a 19.3% stake in Australian Pharmaceutical Industries (API AU).




Empired Ltd (EPD AU) 

25-Oct: Empired Ltd (EPD AU) shareholders approved the Scheme. Implementation is the 16 November.




iCar Asia Ltd (ICQ AU) 

19-Oct: ICar (ICQ AU) &amp; Carsome Enter Into Scheme




Huon Aquaculture (HUO AU) 

29-Oct: Huon Aquaculture (HUO AU) shareholders overwhelmingly supported the Scheme. The implementation date is expected to be the 17 November. 




Japara Healthcare (JHC AU) 

21-Oct: Japara Healthcare (JHC AU) shareholders approve the Scheme. The implementation date is the 5 November. 




Oil Search Ltd (OSH AU) 

29-Oct: Oil Search Ltd (OSH AU)'s first court hearing is expected to take place on the 10 November in place of 27 October as previously announced. 




Rhipe Ltd (RHP AU) 

11-Oct: Rhipe Ltd (RHP AU)'s shareholders approve the Scheme. Shares to be suspended at the close of trading on the 14 October. 




Smartgroup Corp (SIQ AU) 

25-Oct: Smartgroup Corp (SIQ AU) have announced that the TPG and Potentia consortium have decided not to proceed with the acquisition at A$10.35/share and have revised their proposal to A$9.25/share.




Spark Infrastructure (SKI AU) 

21-Oct: Spark (SKI AU): Scheme Booklet Out. Meeting On The 22 November




Sydney Airport (SYD AU) 

7-Oct: Australia's ACCC is now seeking views on the proposed acquisition of Sydney Airport (SYD AU) by the Sydney Aviation Alliance. Responses are required to be submitted by the 28 October. 










Hong Kong


Comments (with links to announcements &amp; insights)




China Youzan Limited (8083 HK) 

1-Oct: The Offeror and China Youzan (8083 HK) announced they are preparing the Scheme doc.  20 Oct: Well, not quite yet. The despatch date has been pushed o the 31 December from 19 October previously. 




Golden Throat Holdings (6896 HK) 

29-Oct: Golden Throat (6896 HK): Scheme Doc Out. Court Meeting On 30 November




Nature Home Holding Company (2083 HK) 

14-Sep: Nature Home (2083 HK): Scheme Doc Out. Court Meeting On 6 Oct. Evergrande Overhang
28-Sep: Nature Home (2083 HK): Risk Aversity Sees Spread Blow Out




Suchuang Gas Corp (1430 HK) 

29-Oct: Suchuang Gas Corp (1430 HK)'s Scheme Doc has been delayed until the 29 December. 










India


Comments 




Adani Power (ADANI IN) 

No October update




Mphasis Ltd (MPHL IN) 

No October update










Japan


Comments (with links to announcements &amp; insights)




Ebook Initiative Japan Co Ltd (3658 JP) 

No October update




Hitachi Metals (5486 JP) 

No October update




Kansai Super Market (9919 JP) 

No October update




Maxvalu Nishinihon (8287 JP) / Fuji Co Ltd (8278 JP) 

No October update




Nippo Corp (1881 JP) 

7-Oct: The Nikkei (English and Japanese) is out with an article saying that ENEOS Holdings (5020 JP) has agreed to buy JRE from GS and GIC. 




Pipedo HD Inc (3919 JP) 

No October update




Shinsei Bank (8303 JP) 

21-Oct: Shinsei Objects to SBI Tender - Offers "Requirements" To Approve 27-Oct: Shinsei TOB: A Complicated Game of 🐓 Nobody Has Thought About?










Malaysia


Comments 




Daibochi Plastic &amp; Packaging Industry (DPP MK) 
15-Oct: The independent advisor recommends the unconditional offer for Daibochi Plastic &amp; Packaging Industry (DPP MK). 25-Oct: Daibochi (DPP MK)'s Offer has been extended to the 8 November. 



Ijm Plantations (IJMP MK) 
1 Oct: Ijm Plantations (IJMP MK)'s IFA recommends Offer to shareholders.  7-Oct: Ijm Plantations (IJMP MK)'s Offer has been extended to the 25 October.   25-Oct: Ijm Plantations (IJMP MK) extends the closing date of its Offer to the 18 November.



MMC Corp Bhd (MMC MK) 
No October update











Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

Independent, Fundamental Quantitative Research

Propitious Research

Fully independent, fundamental and quantitative equity research, focused on companies in the Telecommunication, Media, Technology, Internet and Healthcare sectors in the Global Emerging Markets. Idea generation focused on Quality stocks, trading below their intrinsic Value, with sound Corporate Governance.

Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/vipshop-holdings-ltd-adr" target="_blank" data-smartkarma-citation="entities:1088:1" rel="noopener">Vipshop Holdings (VIPS US)</a> has had an exceptionally volatile 12 months of trading. Following a &gt;200% share price surge between October 2020 and March 2021, the share price has corrected 77%, wiping out nearly $24bn in market value. The significant sell-off, coupled with less severe earnings expectation downgrades (-18%) from the sell-side, has resulted in Vipshop de-rating from a peak forward PE ratio of 25.3x to only 6.9x, which is the cheapest the stock has ever been. 
In this insight, we take a closer look at the meaningful market events which have driven the sell-off in Vipshop as well as the short- and longer-term earnings outlook for the company. 
Going into their 3Q21 reporting period, Vipshop is facing an exceptionally high growth base set in the comparative period as well as macro-economic headwinds due to a slowing Chinese economy and retail spending, which could result in the continuation of the earnings downgrade cycle over the short- to medium-term. However, trading on an estimated 5.3x ex-cash forward PE ratio likely implies that the buy-side has factored most of this in and we are nearing the point of peak pessimism.

Vipshop Holdings (VIPS US) has had an exceptionally volatile 12 months of trading. Following a &gt;200% share price surge between October 2020 and March 2021, the share price has corrected 77%, wiping out nearly $24bn in market value. The significant sell-off, coupled with less severe earnings expectation downgrades (-18%) from the sell-side, has resulted in Vipshop de-rating from a peak forward PE ratio of 25.3x to only 6.9x, which is the cheapest the stock has ever been. 
In this insight, we take a closer look at the meaningful market events which have driven the sell-off in Vipshop as well as the short- and longer-term earnings outlook for the company. 
Going into their 3Q21 reporting period, Vipshop is facing an exceptionally high growth base set in the comparative period as well as macro-economic headwinds due to a slowing Chinese economy and retail spending, which could result in the continuation of the earnings downgrade cycle over the short- to medium-term. However, trading on an estimated 5.3x ex-cash forward PE ratio likely implies that the buy-side has factored most of this in and we are nearing the point of peak pessimism.

Last Week in Event SPACE: Matheson, Naspers/Prosus, China Conch, Vedanta, Aussie Pharma, Toshiba


For the month of September, 9 new deals (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$14bn.



Clicking on the company name in the table below will take you to the entity page where you can read the initial insight(s) written by Smartkarma contributors on these new deals and follow-up discussions, or simply click on the insight link(s) below the name.







New Deals


Industry


Size (US$bn)


Type


Premium




Australia




Ausnet Services (AST AU) 
Transmission
7.0
Scheme
31%



AusNet Services (AST AU) Opens Its Books to Brookfield
AusNet Services (AST AU): Spurned APA Trumps Brookfield's Proposal
AusNet (AST AU): APA Elevates Tussle With Brookfield And Taps Takeover Panel




Ale Property (LEP AU) 
Pub properties
0.8
Scheme
N/A


ALE-Charter Hall: A Post-Lockdown Bet on Australian Pubs



Smartgroup Corp (SIQ AU) 
Employee services
1.0
Scheme
31.7%


Smartgroup (SIQ AU): Indicative Offer From TPG/Potential Capital/Aware Super



Japan




Maxvalu Nishinihon (8287 JP) / Fuji Co Ltd (8278 JP) 
Supermarkets
1.6
Merger
N/A


Fuji (8278) &amp; Maxvalu Nishinihon (8287): Aeon Family Supermarket Integration



Nippo Corp (1881 JP) 
Contractor
2.0
Tender Offer
13.8%



ENEOS To Steamroll Nippo (1881 JP) Minorities
NIPPO (1881 JP) Gets Some Cowbell - It Probably Needs More




Shinsei Bank (8303 JP) 
Financial
1.0
Hostile Offer
38.9%



SBI (8473) Launches a HOSTILE Tender Offer on Shinsei Bank (8303)!
Shinsei Bank - Valuations
Shinsei Looks To A Poison Pill, But Probably Not Really
Shinsei To Launch a Poison Pill; SBI Plays Coy, So We Wait SBI &amp; Shinsei Talking Past Each Other  




Malaysia




Scientex Bhd (SCI MK) 
Real estate
0.1
VTO
12.97%


Scientex - Daibochi: Unconditional Voluntary Take-Over Offer



Singapore








Roxy Pacific Holdings (ROXY SP) 
Real estate
0.3
Offer
19.8%


Roxy-Pacific (ROXY SP): Pre-Conditional Offer Led By Founder



US




iClick Interactive Asia Group (ICLK US) 
Online marketer
0.6
Merger
19%


IClick (ICLK US): PAG &amp; Oasis Shake The Trees


Source: Smartkarma Insights






The average premium for the new deals announced (or first discussed) in September was ~24%, with a year-to-date average of ~32% (121 deals &amp; total deal size of US$249bn).
This compares to the average premium for all deals in 2020 (158 deals) and 2019 (145 deals) of 31% and 31.5% respectively.



Offer Premium Summary




     




2019


2020


2021 YTD



Australia
33.0%
32.4%
34.9%


Hong Kong
25.2%
34.7%
33.9%


Japan
44.0%
35.2%
28.4%


ROW
29.1%
24.2%
33.1%


Average
31.5%
31.1%
32.4%



Source: Smartkarma Insights








Summary of News in September of Arb Situations On Smartkarma's Radar


(Again, click on the company names to take to you to the insights and/or discussion posts for a more comprehensive read-through on each situation)






Australia


Comments (with links to announcements &amp; insights)




1300 Smiles Ltd (ONT AU) 

No September update




5G Networks Ltd/Australia (5GN AU) / Webcentral (WCG AU) 

No September update




Afterpay Touch (APT AU) 

No September update




Australian Pharmaceutical Industries (API AU) 

17-Sep:  Aussie Pharma (API AU): Wesfarmer's Sweetened (Yet Indicative) Offer
27-Sep: Aussie Pharma (API AU): Sigma's Rival Bid (Just) Edges Wesfarmers
Sigma Healthcare (SIG AU)'s corporate affairs manager said due diligence can commence immediately. As API indicated that Sigma's NBIO was capable of being superior, it opened up access. So much for exclusive DD.




Empired Ltd (EPD AU) 

25-Sep: Empired (EPD AU): Scheme Booklet Out. Meeting On The 25 October




Hansen Technologies (HSN AU) 

5-Sep: And it's a no deal - BGH withdraws its proposal for Hansen Technologies (HSN AU).
 
"Having conducted extensive due diligence inquiries in relation to the company, BGH has not notified Hansen of any issue which Hansen considers material in the context of Hansen’s current operations and strategy. BGH Capital has advised the company that it continues to see Hansen as a highly effective organisation with an outstanding management team and strong prospects."




iCar Asia Ltd (ICQ AU) 

9-Sep: Carsome has requested an extension of the exclusivity period under the process deed with iCar Asia Ltd (ICQ AU), such that the exclusivity period is extended initially to the 30 September, then to automatically to the 30 October provided Casome has completed DD by the 30 Sept. Ithe board is currently minded to agree to this request.




Huon Aquaculture (HUO AU) 

23-Sep: Huon Aquaculture (HUO AU)'s Scheme Booklet is out. The Scheme Meeting will take place on the 29 October, with expected implementation on the 8 November.  28-Sep: The effective date under JBS' Offer has been changed to the 3 November from 4 November previously. 




Iress Ltd (IRE AU) 

16-Sep: Another deal failure. EGT and Iress Ltd (IRE AU) have been unable to agree to a transaction. 




Japara Healthcare (JHC AU) 

18-Sep: Japara Healthcare (JHC AU): 21st October Scheme Meeting




Mainstream Group Holdings Ltd (MAI AU) 
No September update



Milton Corp Ltd (MLT AU) 

3-Sep: Marvelous Milton Merger Mapping Mabbled: Ratio Done, Now For The Hard Part
17-Sep: Marvelous Milton and WHSP (SOL AU) Index Event Prepositioning Analysis




Oil Search Ltd (OSH AU) 

10-Sep: Oil Search/Santos: PNG a Potential Party Pooper




Rhipe Ltd (RHP AU) 

9-Sep: Rhipe (RHP AU): Done Deal As Scheme Booklet Dispatched




Spark Infrastructure (SKI AU) 

No September update




Sydney Airport (SYD AU) 

13-Sep:  Sydney Airport (SYD AU): Consortium Ups Bid And Granted Due Diligence




Think Childcare (TNK AU) 

29-Sep: Shareholders approved the Scheme




Youfoodz Holdings (YFZ AU) 

2-Sep: Youfoodz Holdings (YFZ AU) announced that the Federal court of Australia has approved the convening of Scheme Meeting and despatch of Scheme Booklet. The Scheme Meeting will be conducted as a virtual meeting (video conference) at 10.00 am (Sydney time) on Friday, 8th October 2021.










Hong Kong


Comments (with links to announcements &amp; insights)




Beijing Capital Land Ltd H (2868 HK) 

23-Sep: Beijing Capital Land Ltd H (2868 HK) H shareholders overwhelmingly approve the merger. The last day of trading in shares is today - the 24th.  Payment is expected on or before the 8 November. 




China Youzan Limited (8083 HK) 

No September update




Golden Throat Holdings (6896 HK) 

1-Sep: As expected, Golden Throat Holdings (6896 HK) has pushed out the dispatch date for the Scheme Dochemnt to the 19 October (on or before). 



Kerry Logistics Network (636 HK)

16-Sep: Partial closes for Kerry Logistics Network (636 HK) - 89.6% pro-ration. Not bad. 




Nature Home Holding Company (2083 HK) 

14-Sep: Nature Home (2083 HK): Scheme Doc Out. Court Meeting On 6 Oct. Evergrande Overhang
28-Sep: Nature Home (2083 HK): Risk Aversity Sees Spread Blow Out




Suchuang Gas Corp (1430 HK) 

27-Sep: Shares suspended for some reason.




Soho China Ltd (410 HK) 

10-Sep: Another deal break.










India


Comments 




Adani Power (ADANI IN) 

No September update




Mphasis Ltd (MPHL IN) 

No September update










Japan


Comments (with links to announcements &amp; insights)




GCA Corporation (2174 JP) 

9-Sep: Houlihan Lokey Bumps the GCA Offer - A Whopping 1.3%!!!
28-Sep: The Houlihan Lokey (HLI US) takeout of GCA Corporation (2174 JP) is on its way. The Tender Offer Result was just announced and HLI has 89.58%. That means there will be an EGM and squeezeout. 




Hitachi Metals (5486 JP) 

No September update




Sakai Ovex (3408 JP) 
9-Sep: The Sakai Ovex (3408 JP) Tender Offer has been completed successfully. 
The bidders did not get as much as I thought they might, but the top owner has 77.27%.  That means the squeezeout will go through an EGM and this will be delisted maybe a month after the EGM.










Malaysia


Comments 




Ijm Plantations (IJMP MK) 
No September update



MMC Corp Bhd (MMC MK) 
22-Sep: MMC Corp (MMC MK): This Is A Buy








New Zealand


Comments 




Z Energy Ltd (ZEL NZ) 
27-Sep: Z Energy Ltd (ZEL NZ) announced that the original four-week exclusivity period with Ampol has been extended by a further two weeks.









Taiwan


Comments (with links to insights &amp; announcements)




China Development Financial (2883 TT) / China Life Insurance (2823 TT)

No September update












(Mostly) Asia M&A: September 2021 Roundup

iClick Interactive Asia Group / Event-Driven

In recent years,  it has become common practice for Chinese "tech" companies listed in the US to be privatised, on the expectation of being relisted on the Mainland (where often higher multiples are assigned) or Hong Kong. Following the passing of the <a href="https://en.wikipedia.org/wiki/Holding_Foreign_Companies_Accountable_Act" target="_blank" rel="noopener">Holding Foreign Companies Accountable Act</a> last year, there is an added impetus to take these companies private. Or at the very least, seek a dual listing in Hong Kong.
More often than not, these takeovers are initiated by the controlling shareholders. Which makes this latest non-binding proposal for <a href="https://www.smartkarma.com/entities/iclick-interactive-asia-group-limited" target="_blank" data-smartkarma-citation="entities:27314:1" rel="noopener">iClick Interactive Asia Group (ICLK US)</a> a little unusual.
iClick <a href="https://ir.i-click.com/2021-09-24-iClick-Interactive-Asia-Group-Limited-Announces-Receipt-of-a-Preliminary-Non-Binding-Indicative-Proposal-to-Acquire-the-Company" target="_blank" rel="noopener">announced</a> on the 24 September it had received a preliminary indicative proposal from PAG Pegasus Fund and Oasis Management to acquire all of its outstanding shares for US$6.75 per ADS, in cash.
That's a 19% premium to last close, yet 63% below its all-time high close of US$18.30 in February last year, and 16% below its $8/share IPO price in December 2018.
Should a firm Offer unfold, this long-form merger would require two-thirds majority approval from all shareholders.
Sammy Hsieh, the chairman of the board of directors and co-founder, Jian Tang, iClick's CEO, and co-founder, collectively own 4,385,078 Class B ordinary shares, which due to their super-voting rights, is equivalent to ~62% of the voting power. This proposal is a non-starter without the support of either Hsieh or Tang.
In addition, <a href="https://www.smartkarma.com/entities/baozun" target="_blank" data-smartkarma-citation="entities:29712:1" rel="noopener">Baozun (9991 HK)</a> controls a further 10% of the voting power. Should all three side with the buyer consortium, this deal is done. 
But I doubt this will be the outcome. A more likely scenario is the consortium's low-balled Offer is a means to triggering a response from a key player, such as <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a>, to make a counteroffer.
More below the fold.

In recent years,  it has become common practice for Chinese "tech" companies listed in the US to be privatised, on the expectation of being relisted on the Mainland (where often higher multiples are assigned) or Hong Kong. Following the passing of the Holding Foreign Companies Accountable Act last year, there is an added impetus to take these companies private. Or at the very least, seek a dual listing in Hong Kong.
More often than not, these takeovers are initiated by the controlling shareholders. Which makes this latest non-binding proposal for iClick Interactive Asia Group (ICLK US) a little unusual.
iClick announced on the 24 September it had received a preliminary indicative proposal from PAG Pegasus Fund and Oasis Management to acquire all of its outstanding shares for US$6.75 per ADS, in cash.
That's a 19% premium to last close, yet 63% below its all-time high close of US$18.30 in February last year, and 16% below its $8/share IPO price in December 2018.
Should a firm Offer unfold, this long-form merger would require two-thirds majority approval from all shareholders.
Sammy Hsieh, the chairman of the board of directors and co-founder, Jian Tang, iClick's CEO, and co-founder, collectively own 4,385,078 Class B ordinary shares, which due to their super-voting rights, is equivalent to ~62% of the voting power. This proposal is a non-starter without the support of either Hsieh or Tang.
In addition, Baozun (9991 HK) controls a further 10% of the voting power. Should all three side with the buyer consortium, this deal is done. 
But I doubt this will be the outcome. A more likely scenario is the consortium's low-balled Offer is a means to triggering a response from a key player, such as Tencent (700 HK), to make a counteroffer.
More below the fold.

IClick(ICLK US): PAG & Oasis Shake The Trees

China

JOYY Inc. operates a global social media platform. The Company offers platform which enables users to interact with each other in real time through online live media by creating, sharing, and enjoying a vast range of entertainment content and activities. JOYY serves customers in China.

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JOYY (YY US)

(Mostly) Asia M&A: October 2021 Roundup

The average premium for the new deals announced (or first discussed) in October was ~30%, with a year-to-date average of ~32% (138 deals & total...

David Blennerhassett

Vipshop: Cheapest It Has Ever Been

In this insight, we take a closer look at the meaningful market events which have driven the sell-off in Vipshop as well as the short- and longer...

Wium Malan, CFA

Last Week in Event SPACE: Matheson, Naspers/Prosus, China Conch, Vedanta, Aussie Pharma, Toshiba

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

(Mostly) Asia M&A: September 2021 Roundup

For the month of September, 9 new deals were discussed on Smartkarma with an announced deal size of ~US$14bn. The average premium in September was...

David Blennerhassett

IClick(ICLK US): PAG & Oasis Shake The Trees

Buying around here is probably going to have limited downside. I think PAG/Oasis' intent is to shake out potential suitors - including the co...

David Blennerhassett

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52-week Range

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