Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven


For the month of May, 11 new deals were discussed on Smartkarma with an overall announced deal size of ~US$7.3bn.



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




APN Property Group (APD AU) 
Property
0.2
Scheme
50%


APN Prop (APD AU): Dexus' Done Deal



Boral Ltd (BLD AU) 
Construction
4.8
Off-market
Nil


Boral Ltd (BLD AU): Seven's Nil Premium



Japara Healthcare (JHC AU) 
Healthcare
0.2
Scheme
30%


Japara Healthcare (JHC AU): Here Comes The Calvary


 



Hong Kong




Chong Hing Bank (1111 HK) 
Banking
0.2
Scheme
51.2%



Chong Hing Bank (1111 HK): Takeover Talk As Shares Pop
Chong Hing Bank (1111 HK): Yue Xiu's Offer Is Light



 



Japan




Aomori Bank (8342 JP) / Michinoku Bank (8350 JP) 
Bank
0.6
Merger



Aomori Bank &amp; Michinoku Bank Merger - Nothing To Write Home About Yet



EPS Holdings (4282 JP) 
Data/software
0.1
Tender Offer
35.5%


Another Too-Cheap MBO as Founder Takes Out EPS


 Locoguide (4497 JP) / Kufu (4399 JP)

Real estate
0.4
Merger



Locoguide (4497 JP) - Kufu (4399 JP): Merger Is a Done Deal



Maruka Machinery (7594 JP) / Furusato Industries (8087 JP) 
Trading
0.4
Merger



A Complex SmallCap Merger in Japan: Maruka (7594) And Furusato (8087)



Secom Joshinetsu (4342 JP) 
Security
0.3
Tender Offer
66.2%


Secom To Finally Buy Out Affiliate Secom Joshinetsu (4342)








Malaysia




Can-One Bhd (CAN MK) 
Manufacturing
0.1
MTO
15.8%


Can-One (CAN MK)? Yeoh Can Lah!



IHH Healthcare (IHH MK) 
Healthcare
N/A
N/A
N/A


IHH Healthcare (IHH MK): More Medicine For Mitsui?


Source: Smartkarma Insights






The above does not include BetMakers Technology Group (BET AU) lobbing a non-binding offer of A$4bn (A$1bn cash, $3bn scrip into BET) for Tabcorp Ltd (TAH AU)'s wagering and media division, and Apollo's prior tilt - Tabcorp (TAH AU): Apollo Shows Its Hand.

Nor does the table include the rumoured merger between  Angang Steel Co Ltd (H) (347 HK) and Bengang Steel (000761 CH) - Amalgamated Steel: Merging Angang &amp; Bengang As, Bs, and Hs.



The average premium for the new deals announced (or first discussed) in May was ~41%, with a year-to-date average of ~31% (78 deals). This compares to the average premium for all deals in 2020 (158 deals) and 2019 (145 deals) of 31% and 31.5% respectively. 




Summary of News in May 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)




3P Learning (3PL AU) 

No May update




Bingo Industries (BIN AU) 

1-May: Capital Group announced it has sold its entire 9.7% stake in Bingo Industries (BIN AU).




Crown Resorts (CWN AU) 

10-May: Crown Resorts: Blackstone &amp; Star Place Their Bets
17-May: Crown Says Blackstone's Bid Is Light. Undecided On Star
20-May: Crown Resorts Ltd: Blackstone Offer Rejected, Star Offer May Still Not Reflect True Forward Value




Galaxy Resources (GXY AU) 

No May update




Link Administration Holdings (LNK AU) 

27-May: Link Group (LNK AU): KKR Opens The Bidding For PEXA
31-May: Link Admin (LNK AU) Goes IPO Route For PEXA Afterall




Mainstream Group Holdings Ltd (MAI AU) 

2-May: Mainstream (MAI AU): More-Than-Double in Less than 2 Months After Apex Bump
6-May: Mainstream (MAI AU): Bidding War Continues as SS&amp;C Overbids for the 4th Time
14-May: Mainstream (MAI AU): +120% in ~2 Months but Bidding War Continues....




McPherson's Ltd (MCP AU) 

No May update




Mortgage Choice (MOC AU) 

26-Mau FIRB gives its approval



Primewest Group Ltd (PWG AU)

14-May: Target's Statement and Bidder's Statements were published. Primewest Group Ltd (PWG AU)'s Board has unanimously recommended shareholders to accept the Offer. 




Think Childcare (TNK AU) 

12-May: Think Childcare (TNK AU) has agreed to extend the Exclusivity Period with Busy Bees to 31st May 2021 (vs. original deadline of 14th May). This is still a non-binding deal with an expected completion date to be in 1Q CY22. 




Vitalharvest Freehold Trust (VTH AU) 

1-May: And so it goes - MAFM bumps its Offer for Vitalharvest Freehold Trust (VTH AU) to $1.26.
7-May: MAFM exercises a call option and acquires 16.2% of Vitalharvest Freehold Trust (VTH AU).
28-May Roc bumps its Offer for Vitalharvest Freehold Trust (VTH AU) to $1.29/share.  And says it will overbid any MAFM counter! 




Vocus Communications (VOC AU) 

10-May: Vocus Comms (VOC AU): MIRA/Aware's Done Deal
19-May: Vocus Comms (VOC AU): MIRA/​Aware’s Scheme Doc Despatched. EGM On 22 June










Hong Kong


Comments (with links to announcements &amp; insights)




Beijing Digital Telecom (6188 HK) 

1-May: Beijing Digital (6188 HK): Offer Now Open. IFA Says Fair
20-May: Beijing Digital Telecom (6188 HK)'s MGO is now unconditional in all respects. 




China Machinery Engineering (1829 HK) 

28-May: China Machinery Engineering (1829 HK): Movement In The Works?




China Traditional Chinese Medicine (570 HK) 

7-May: In its monthly update regarding a potential Offer, China Traditional Chinese Medicine (570 HK) says there is no update.




China Youzan Limited (8083 HK) 

10-May: China Youzan (8083 HK): Reality Check As Shares Rollover




Kerry Logistics Network (636 HK) 

4-May: Kerry Logistics Network (636 HK) will hold an EGM on the 26 May for shareholders to vote on the sale of the Hong Kong and Taiwan warehouse businesses to Kerry Holdings. 
26-May: At its SGM, Kerry Logistics Network (636 HK) shareholders overwhelmingly approved the sale of its Hong Kong, Taiwan warehouse business to Kerry Holdings.




New Century REIT (1275 HK) 

No May update




Rivera Holdings (281 HK) 

No April update




Sichuan Languang Justbon Service Group (2606 HK) 

3-May: Languang Justbon (2606 HK): Offer Now Open - For Up To Four Months










India


Comments (with links to insights)




Mphasis Ltd (MPHL IN) 

4-May: The Detailed Public Statement on Mphasis Ltd (MPHL IN) has been released. The Open Offer is scheduled tentatively to run from 18 June to 1 July, which means it is running Very Tight and the option is worth a bit less than I expected. But that just means there is more gamma. One could get big at the high Rs 1600s area. 




Vedanta Ltd (VEDL IN) 

4-May: Vedanta Now Caught Up With Peers - A Different Skew Ahead










Japan


Comments (with links to announcements &amp; insights)




BeNEXT Group (2154 JP) 
No May update



Cocokara Fine (3098 JP) 
No May update



Fuji Kosan Company (5009 JP) 
17-May:  Fuji Kosan Company (5009 JP) has responded to Aslead Strategic Value Fund's Tender Offer with its initial Target Opinion Statement which is "Opinion Withheld." This is because Fuji Kosan hasn't actually done anything yet - two weeks in. They have sent questions to Aslead, and Aslead has five business days to respond. This is slow-walking it. This tender offer is likely to be extended because of that.



Hitachi Metals (5486 JP) 

5-May: Hitachi Metals - Should I Stay or Should I Go Now?




Honshu Chemical Industry (4115 JP) 

13-May: Honshu Chemical (4115) Shareholders Perhaps One Day From a Wrong Price Takeover
16-May:: Honshu Chemical Shareholders Get the Short End of the Stick As The Board Is Ex-Gourd




Invesco Office J Reit (3298 JP) 

6-May:  Invesco Office OPPOSES Starwood Hostile Offer and Gets a Distinctly Beige Knight
11-May:  Starwood Bumps Terms, Lowers Threshold on Invesco Office
13-May:  Invesco Office's Terrible, Horrible, No Good Very Bad Day... Changes Things
20-May:  Invesco Office's Beige Knight (Deemed Dirty Gray By Markets) Suddenly Looks Brighter and Whiter
23-May:  Starwood Responds to Invesco Office's White Knight Proposal
24-May: Starwood has extended their Tender Offer on Invesco Office J Reit (3298 JP) from the 24th of May to 15th of June after the close of the 24th. They did not raise the price. This is basically the equivalent of Starwood calling Invesco's bluff. They can extend again if they want but they are going to make Invesco come out. They can change price later if they think it necessary.



Japan Asia (3751 JP)
No May update



Sawada Holdings (8699 JP) 

9-May:  Sawada Selldown Was NOT Done - Shareholder Structure Looks Different Now
23-May: Sawada Is A Different Stock Now
31-May:  Be Careful of Expectations on Sawada (8699)




Toshiba Corp (6502 JP) 

14-May: Toshiba – Shareholder Returns Trump Weak Guidance
17-May: Toshiba Results &amp; Shareholder Return - Possibly Big Impact Buyback Coming











New Zealand


Comments 




Tilt Renewables Ltd (TLT NZ) 

No May update











Singapore


Comments (with links to announcements)




Procurri Corporation (PROC SP) 

3-May: The Partial Offer has not become unconditional in all respects on the Closing Date and has therefore lapsed










Thailand


Comments




Intouch Holdings (INTUCH TB) 

No May update




Vinythai Public Co (VNT TB) 

No May update






Jardine Strategic Holdings / Event-Driven


For the month of March, 16 new deals were discussed on Smartkarma with an overall announced deal size of ~US$21bn.


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




Crown Resorts (CWN AU) 
Casino
6.3
Non-binding Scheme
36.8%


Crown Resorts (CWN AU): Blackstone Rolls the Dice



McPherson's Ltd (MCP AU) 
Cosmetics
0.1
On-Market
6.9%


McPherson (MCP AU): Unconditional On-Market Offer



Mainstream Group Holdings Ltd (MAI AU) 
Admin provider
0.2
Scheme
8.6%


Mainstream Group (MAI AU): Go-Shop Provision Makes It Interesting



Mortgage Choice (MOC AU) 
Mortgage broker
0.2
Scheme
66%



Mortgage Choice (MOC AU): REA's Scheme Offer









Hong Kong




China Youzan Limited (8083 HK) 
e-Commerce
4.3
Scheme
(30.2%)


China Youzan (8083 HK): Proposal Towards Relisting Youzan Tech








Japan




Funai Electric (6839 JP) 
Electronics
0.2
Tender Offer
25.2%


Funai Electric (6839 JP): Tender Offer Price Seems Light



IGNIS Ltd (3689 JP) 
Software
0.2
Tender Offer
52.12%


IGNIS (3689) MBO +63% Is Probably Too Light



Shoko Co Ltd (8090 JP) 
Trading co
0.1
Tender Offer
10.6%



Shoko (8090 JP) Tender Offer - Showa Denko Sells Too Cheap. Looks Bumpity Shoko (8090 JP) TOB:  Still Looks Bumpity




Takeei Corp (2151 JP)/ Rever Holdings Corp (5690 JP)

Staffing cos
0.5
Merger



Takeei (2151 JP) - Rever (5690 JP) Merger: TOPIX Event to Be Triggered








New Zealand




Tilt Renewables Ltd (TLT NZ) 
Energy
2.1
Scheme
99%


Tilt Renewables: Mercury/PowAr's Big Blow








Singapore




Global Cord Blood (CO US) 
Cord Blood
0.2
Pre-con proposal
65.4%


Global Cord Blood: Haitong Raids The Bank



Jardine Strategic Holdings (JS SP) 
Conglomerate
5.5
Amalgamation
20.2%



Jardine Matheson: Collapsing The Circularity
Jardine Strategic: What's Yours Is Mine
Jardine Strategic: SGM On The 12 April




Procurri Corporation (PROC SP) 
IT Hardware
0.1
Partial
32.7%


Procurri Corporation (PROC SP): Partial Tender Offers Scant Opportunity. Read more: https://skr.ma/FTYAh








Singapore Reinsurance (SRE SP) 
Reinsurance
0.2
Vol. Offer
17.8%


Singapore Reinsurance (SRE SP): Tender Offer Trading Tight








Thailand




Vinythai Public Co (VNT TB) 
Chemicals
0.3
Delisting Offer
57.8%


Vinythai (VNT TH): Delisting Offer From PTTGC








Philippines




2GO Group Inc (2GO PM) 
Logistics
0.2
MTO
30.49%


2GO Group (2GO PH): SMIC's MGO






Source: Smartkarma Insights





The average premium for the new deals announced (or first discussed) in March was ~33%, with a year-to-date average of ~32% (58 deals). This compares to the average premium for all deals in 2020 (158 deals) and 2019 (145 deals) of 31% and 31.5% respectively. 



Summary of News in March 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)




3P Learning (3PL AU) 

No March Update




Asaleo Care Ltd (AHY AU) 

No March Update




Bingo Industries (BIN AU) 

No March Update




Coca Cola Amatil (CCL AU) 

12-Mar: The Scheme booklet for Coca Cola Amatil (CCL AU) has been registered with ASIC. The Scheme Meeting will be held on the 16 April. 




Think Childcare (TNK AU) 

4-Mar: Think Childcare (TNK AU): Trading Through Terms. Should You Fold Now?




Vitalharvest Freehold Trust (VTH AU) 

11-Mar: Vitalharvest (VTH AU): Macquarie Ups Its Offer
18-Mar:Vitalharvest (VTH AU): Roc Blinks, And Bumps




Vocus Communications (VOC AU) 

10-Mar: Vocus Comms (VOC AU): MIRA/Aware's Done Deal




WPP AUNZ (WPP AU) 

18-Mar: WPP AUNZ (WPP AU)'s Scheme booklet registered with the ASIC. Scheme Meeting to be held on the 21 April. 










Hong Kong


Comments (with links to announcements &amp; insights)




Beijing Digital Telecom (6188 HK) 

No March update




Beijing Jingneng Clean Energy (579 HK) 

1-Mar: Beijing Jingneng (579 HK): And That's a Fail




China Logistics Property Holdings (1589 HK) 

No March update




China Machinery Engineering (1829 HK) 

3-Mar: PRC approval, a pre-condition, to the Offer remains outstanding in a monthly update from China Machinery Engineering (1829 HK).




HKC Holdings (190 HK) 

No March update. Despatch of Scheme Doc pushed out to 30 April 




I.T Ltd (999 HK) 

22-Mar: I.T. (999 HK): Scheme Meeting 16 April. IFA Says Fair




Kerry Logistics Network (636 HK) 

18-Mar: Kerry Properties (683 HK) said it would: "declare a special dividend to distribute approximately 25% to 30% of such net proceeds" from the sake of shares in Kerry Logistics Network (636 HK).




New Century REIT (1275 HK) 

18-Mar: Circular despatched. EGM on the 12 April




Polytec Asset Holdings (208 HK) 

No March update. Polytec Asset Holdings (208 HK)extended the despatch of the Scheme Doc to 16 April.




Rivera Holdings (281 HK) 

No March update. Scheme Doc pushed way out to 7 June 




Sichuan Languang Justbon Service Group (2606 HK) 

11-Mar: There are some subtle changes to the MOU terms announced by Sichuan Languang Justbon Service Group (2606 HK) last night.  
Share to be acquired include 115,090,200 H shares AND 750,000 domestic shares or 65.04% of shares out, up from 64.62% in the initial announcement.  
 The price per H shares will be RMB42.8546/share , up from RMB42.1105.
23-Mar: Languang Justbon (2606 HK): Be Wary Of Chasing The Delisting Bump




China Traditional Chinese Medicine (570 HK) 

1-Mar: An update to say there is no update.




Zhejiang New Century Hotel Management Group (1158 HK) 

No March update




Zhuhai Holdings Investment (908 HK) 

No March update. The despatch of the Scheme Doc for Zhuhai Holdings Investment (908 HK) has been pushed back to the 21 April.










India


Comments (with links to insights)




Engineers India (ENGR IN) 

No March update




INEOS Styrolution India Limited (INEOS IN) 

No March update




National Aluminium (NACL IN) 

No March update




Vedanta Ltd (VEDL IN) 

13-Mar: Vedanta (VEDL) Awaits Open Offer Revision. Now Less Event-y More Commodity-y
17-Mar: Vedanta (VEDL) Open Offer Raised in Price and Size!










Japan


Comments (with links to announcements &amp; insights)




Being Co Ltd (4734 JP) 
25-Mar: The Tender Offer for Being Co Ltd (4734 JP) was successful. The bidder now has 88+%.



BeNEXT Group (2154 JP) 
25-Mar: BeNEXT - Yumeshin Merger: FTSE Upweight Is a Positive Surprise




Cocokara Fine (3098 JP) 
10-Mar: Matsukiyo-Cocokara Situation Gets Its Activist Noise Started 1-Mar:MatsuKiyoCocokara Merger and Implied Forward Forecasts which followed MatsukiyoCocokara &amp; Co - The Merger




Dynac Holdings Corporation (2675 JP) 
No March update



Honshu Chemical Industry (4115 JP) 

No March update




Japan Asia (3751 JP) 

1-Mar: Japan Asia Group (3751) : Defense Against Hostile TOB Is Bad News
18-Mar: Murakami-San Launches New JAG (3751) Tender Offer




Maeda Road Construction Co (1883 JP) 

13-Mar: Maeda Corp (1824 JP) has bought 21.8113mm shares of Maeda Road Construction Co (1883 JP).The pro-ration is 60.2913754%




N Field Co Ltd (6077 JP) 

No March update




Sakai Ovex (3408 JP) 

8-Mar: Savai Ovex MBO - A Very Weak Bump
28-Mar: Sakai Ovex Tender Offer Fails But The Stock Gains an Activist




Sanken Electric (6707 JP) 

9-Mar: Effissimo, Sanken, and Allegro - Thinking About the Future
25-Mar: Effissimo Capital Management held 24.05mm shares prior to launching its tender offer and it appears it managed to buy 24.04mm shares in the Tender Offer. That gets them to 19.93%, up from 9.97%. 




Tokyo Rope Mfg (5981 JP) 

9-Mar: After all was said and done, the Tender Offer was completed, with Nippon Steel Corporation (5401 JP) getting to 19.9% after buying 1.625mm shares at JPY 1500/share. Pro-ration was quite high at 75.86%. 




Tsukui Corp (2398 JP) 

25-Mar: The Tsukui Corp (2398 JP) Tender Offer/MBO was completed successfully. The minimum hurdle was 29.316mm shares. The actual shares received in the Tender was 45.719mm or 64.07% of shares out. This will get squeezed out in the EGM as the non-tendering parties join with MBK and they have close to 90% together.




Unimat Retirement Community (9707 JP) 

26-Mar: the Unimat Retirement Community (9707 JP) Tender Offer was successful. The bidder got to 80.53%. An EGM will follow along with a squeezeout/delisting. The cowbell has not been very loud.










New Zealand


Comments (with links announcements)




Infratil Ltd (IFT NZ) 

No March update











Philippines


Comments (with links announcements)




Lopez Holdings (LPZ PM) 

19-Mar: The Tender Offer for Lopez Holdings (LPZ PM) closed on the 8 March. The accepted Tender Offer Shares were intended to be crossed through the PSE eight business days after the close of the Tender Offer Period or on 18 March. That has now taken place. The public float now stands at 29.32%. 











Singapore


Comments (with links to announcements &amp; insights)




CEI Limited (CEI SP) 

19-Mar: Offer declared unconditonal




GL Ltd (GLL SP) 

1-Mar: SIAS Questions GL Limited's Offer: More Bark Than Bite 15-Mar:  GL Limited: Guoco Bumps &amp; Declares Offer Unconditional 18-Mar: Guoco Group Ltd (53 HK) gets &gt;90% and will now move to compulsory acquire shares in GL Ltd (GLL SP).




Penguin International (PBS SP) 

24-Mar: Penguin International (PBS SP): Offer Extended, No Bump, Time to Unwind
26-Mar: 75% threshold surpassed: As at 6.00 p.m. (Singapore time) on 25 March 2021, the Offeror has gained control of 167,789,621 shares, representing approximately 76.21% of the total number of shares in the Company. 




Soilbuild Business Space REIT (SBREIT SP) 

11-Mar: Phew - that was close. 89.32% voted FOR but the headcount scrapped in at 56.56%.  Last day of trading in Soilbuild Business Space REIT (SBREIT SP) was the 26 March.










Taiwan


Comments (with links to announcements &amp; insights)




Jih Sun Financial (5820 TT) 

20-Mar: Jih Sun Financial Deal Down To The Wire
23-Mar: Jih Sun Tender Offer Successful - Now the Squeezeout






On the 29 March, Mortgage broker <a href="https://www.smartkarma.com/entities/mortgage-choice-ltd" target="_blank" data-smartkarma-citation="entities:10936:1" rel="noopener">Mortgage Choice (MOC AU)</a> <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02358216-2A1289623?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a> it had entered into a Scheme Implementation Agreement with <a href="https://www.smartkarma.com/entities/rea-group-ltd" target="_blank" data-smartkarma-citation="entities:699:1" rel="noopener">REA Group Ltd (REA AU)</a>.
The Offer consideration of $1.95/share is a 66% premium to last close. An interim dividend of A$0.04/share announced on the 18 February and to be paid on the 15 April will also be added. The ex-date was the <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02342822-2A1281136?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">25 February</a>.
MOC's directors unanimously recommend the Scheme. In addition, directors holding an aggregate of 12.7% out have confirmed they will vote in favour of the Scheme. 
Save for standard Scheme conditions and FIRB approval, the Scheme is not subject to due diligence or financing conditions.
This looks like a done deal.
More below the fold.

On the 29 March, Mortgage broker Mortgage Choice (MOC AU) announced it had entered into a Scheme Implementation Agreement with REA Group Ltd (REA AU).
The Offer consideration of $1.95/share is a 66% premium to last close. An interim dividend of A$0.04/share announced on the 18 February and to be paid on the 15 April will also be added. The ex-date was the 25 February.
MOC's directors unanimously recommend the Scheme. In addition, directors holding an aggregate of 12.7% out have confirmed they will vote in favour of the Scheme. 
Save for standard Scheme conditions and FIRB approval, the Scheme is not subject to due diligence or financing conditions.
This looks like a done deal.
More below the fold. 

Mortgage Choice (MOC AU): REA's Scheme Offer

Silver Point

Thomas J. Monaco

Independent Insight Provider

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

Equity Bottom-Up

Genworth Financial Inc Cl A / Equity Bottom-Up

*Poor Result Despite Mortgage Unit Gains: After the market close, Genworth Financial (GNW.US) [Genworth] reported 2Q20 adjusted earnings per share loss of USD 0.04, which was worse than consensus of USD 0.03 per share;* AXA Settlement Increases Risk: Post-2Q20, Genworth announced that it had agreed to a settlement with AXA (AXA.FP). Under the terms of the settlement, Genworth has agreed to pay AXA approximately USD 521 mn, with USD 125 mn payable on July 23, 2020 and the balance deferred to 2022. As such, post payment the stated USD 554 mn in cash on Genworth’s balance sheet dwindles by USD 125 mn or 22.5% to USD 429 mn, while restricted cash amounts to USD 59mm. Unfortunately, there appears to be no mention of a liability cap on AXA’s future PPI losses; and*China Oceanwide Wasting Time: Genworth’s transaction with China Oceanwide (715.HK) appears increasingly in doubt following the 15th extension on June 30, 2020 due to China Oceanwide’s continued inability to fund this transaction. China Oceanwide is required to provide evidence of deal funding by August 31st.

*Poor Result Despite Mortgage Unit Gains: After the market close, Genworth Financial (GNW.US) [Genworth] reported 2Q20 adjusted earnings per share loss of USD 0.04, which was worse than consensus of USD 0.03 per share;* AXA Settlement Increases Risk: Post-2Q20, Genworth announced that it had agreed to a settlement with AXA (AXA.FP). Under the terms of the settlement, Genworth has agreed to pay AXA approximately USD 521 mn, with USD 125 mn payable on July 23, 2020 and the balance deferred to 2022. As such, post payment the stated USD 554 mn in cash on Genworth’s balance sheet dwindles by USD 125 mn or 22.5% to USD 429 mn, while restricted cash amounts to USD 59mm. Unfortunately, there appears to be no mention of a liability cap on AXA’s future PPI losses; and*China Oceanwide Wasting Time: Genworth’s transaction with China Oceanwide (715.HK) appears increasingly in doubt following the 15th extension on June 30, 2020 due to China Oceanwide’s continued inability to fund this transaction. China Oceanwide is required to provide evidence of deal funding by August 31st. 

Genworth Financial – Big MI Print, Uncertainties Persist

<ul><li>
New York State Now In on the Act: Genworth Financial (GNW.US) [Genworth] disclosed that it has been discussing Genworth Life Insurance Company of New York (GLICNY) with the New York State Department of Financial Services (NYSDFS).  NYSDFS approval has expired, and it  has been informed Genworth a capital contribution to GLICNY is now required for sale.</li></ul><ul>
<li>
Change of Tune at Genworth: CEO seemingly changed his tune somewhat as Genworth is ready to move on from China Oceanwide with a “Plan B” if the NYSDFS fails to approve the deal by March 31. “Plan B” could involve the sale of either one or both of its U.S. and Australia mortgage insurance subsidiaries.</li>
<li>
Still Worth a Flyer:Both sides have demonstrated patience with the sale process, as demonstrated by each side's commitment to this transaction through 13 waivers of their options to walk away from the deal. Potential closing of Genworth's deal to be acquired by a Chinese financial holding group for $5.43 per share in cash.  Shares are trading almost 30% below the deal price. </li>
</ul>


New York State Now In on the Act: Genworth Financial (GNW.US) [Genworth] disclosed that it has been discussing Genworth Life Insurance Company of New York (GLICNY) with the New York State Department of Financial Services (NYSDFS).  NYSDFS approval has expired, and it  has been informed Genworth a capital contribution to GLICNY is now required for sale.

Change of Tune at Genworth: CEO seemingly changed his tune somewhat as Genworth is ready to move on from China Oceanwide with a “Plan B” if the NYSDFS fails to approve the deal by March 31. “Plan B” could involve the sale of either one or both of its U.S. and Australia mortgage insurance subsidiaries.

Still Worth a Flyer:Both sides have demonstrated patience with the sale process, as demonstrated by each side's commitment to this transaction through 13 waivers of their options to walk away from the deal. Potential closing of Genworth's deal to be acquired by a Chinese financial holding group for $5.43 per share in cash.  Shares are trading almost 30% below the deal price. 


Australia

Mortgage Choice Limited provides mortgage broking and related financial services.  The Company provides advice regarding mortgage products offered by its panel of lenders and service to residential mortgage consumers for both owner occupied and investment loans.

Mortgage Choice (MOC AU)

(Mostly) Asia M&A: May 2021 Roundup

The average premium for the new deals announced (or first discussed) in May was ~41%, with a year-to-date average of ~31% (78 deals).

David Blennerhassett

(Mostly) Asia M&A: March 2021 Roundup

The average premium for the new deals announced (or first discussed) in March was ~31%, with a year-to-date average of ~31% (57 deals).

David Blennerhassett