Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Canvest Environmental Protection Group / Event-Driven

Canvest Environmental Protection Group (0XC SW)

<ul>
<li>Since waste-to-energy play <a href="https://www.smartkarma.com/entities/canvest-environmental-protection-group-co-ltd" target="_blank" data-smartkarma-citation="entities:100:1" rel="noopener"><strong>Canvest Environmental Protection (1381 HK)</strong></a> announced a possible privatisation from <strong><a href="https://www.smartkarma.com/entities/grandblue-environment-co-a" target="_blank" data-smartkarma-citation="entities:17887:1" rel="noopener">Grandblue Environment (600323 CH)</a></strong> at $4.90/share (a 20.7% premium to undisturbed), shares are up just 6.4%. </li>
<li>There's a lot to pack in here, not the least being this is an <em>indicative</em> Pre-Conditional Offer.</li>
<li>But the fact the announcement mentions rolling over a specific number of shares of the controlling shareholders (7.23%), suggests negotiations are well advanced. So we explore.</li>
</ul>


Since waste-to-energy play Canvest Environmental Protection (1381 HK) announced a possible privatisation from Grandblue Environment (600323 CH) at $4.90/share (a 20.7% premium to undisturbed), shares are up just 6.4%. 
There's a lot to pack in here, not the least being this is an indicative Pre-Conditional Offer.
But the fact the announcement mentions rolling over a specific number of shares of the controlling shareholders (7.23%), suggests negotiations are well advanced. So we explore.


Canvest (1381 HK): Evaluating A Privatisation

<div>
<p>Back on the 27 July, wood flooring manufacturer <a href="https://www.smartkarma.com/entities/nature-home-holding-company" target="_blank" data-smartkarma-citation="entities:20543:1" rel="noopener">Nature Home Holding Company (2083 HK)</a> <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0727/2021072701813.pdf" target="_blank" rel="noopener">announced</a> an Offer from its founding shareholders, by way of a Scheme, at HK$1.70/share. The Offer Price will not be increased. <a href="https://www.smartkarma.com/entities/dehua-tb-new-decoration-a" target="_blank" data-smartkarma-citation="entities:4444:1" rel="noopener">Dehua Tb New Decoration A (002043 CH)</a> has given an irrevocable rollover undertaking for its 19.6% stake. </p>
</div>
<div>
<p>The Scheme Document was <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0913/2021091301428.pdf" target="_blank" rel="noopener">despatched</a> on the 14 September with the Court Meeting scheduled for the 6 October. Provided all resolutions pass, cheques are expected to be despatched on or before the 26 October.</p>
</div>
<div>
<p>The Offer looked done and the gross/annualised spread tightened into 2%/26.5% on the 19 September.</p>
<p>Then the wheels fell off, with the gross spread widening out to 38% as I type, and trading well below the undisturbed price.</p>
<p>Nature Homes had previously flagged concerns with outstanding trade receivables with <a href="https://www.smartkarma.com/entities/china-evergrande-group" target="_blank" data-smartkarma-citation="entities:479:1" rel="noopener">Evergrande Real Estate Group (3333 HK)</a>, and potentially the ubiquitous negative news surrounding China's second-largest developer is having a knock-on-affect. Plus there are a number of other factors at work that <em>could</em> be bucketed under buyer's remorse.</p>
<p>But the Offeror &amp; concert parties cannot simply walk away from this deal. Not without breaching the Takeover's Code. And which shareholder will <em>not</em> vote this through given where it is trading? </p>
</div>
<div>
<p>More below the fold.</p>
</div>


Back on the 27 July, wood flooring manufacturer Nature Home Holding Company (2083 HK) announced an Offer from its founding shareholders, by way of a Scheme, at HK$1.70/share. The Offer Price will not be increased. Dehua Tb New Decoration A (002043 CH) has given an irrevocable rollover undertaking for its 19.6% stake. 


The Scheme Document was despatched on the 14 September with the Court Meeting scheduled for the 6 October. Provided all resolutions pass, cheques are expected to be despatched on or before the 26 October.


The Offer looked done and the gross/annualised spread tightened into 2%/26.5% on the 19 September.
Then the wheels fell off, with the gross spread widening out to 38% as I type, and trading well below the undisturbed price.
Nature Homes had previously flagged concerns with outstanding trade receivables with Evergrande Real Estate Group (3333 HK), and potentially the ubiquitous negative news surrounding China's second-largest developer is having a knock-on-affect. Plus there are a number of other factors at work that could be bucketed under buyer's remorse.
But the Offeror &amp; concert parties cannot simply walk away from this deal. Not without breaching the Takeover's Code. And which shareholder will not vote this through given where it is trading? 


More below the fold.


Nature Home (2083 HK): Risk Aversity Sees Spread Blow Out

<div>
<p>Following its <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0719/2021071900227.pdf" target="_blank" rel="noopener">suspension</a> "<em>pursuant to the Code of Takeovers and Mergers</em>" on the 19 July, wood flooring manufacturer <a href="https://www.smartkarma.com/entities/nature-home-holding-company" target="_blank" data-smartkarma-citation="entities:20543:1" rel="noopener">Nature Home Holding Company (2083 HK)</a> <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0727/2021072701813.pdf" target="_blank" rel="noopener">announced</a> on the 27 July an Offer from its founding shareholders, by way of a Scheme, at HK$1.70/share, bang in line with my earlier estimate. <em>The Offer Price will not be increased</em>. Nature Home does not intend to declare any dividends during the Offer period.  <a href="https://www.smartkarma.com/entities/dehua-tb-new-decoration-a" target="_blank" data-smartkarma-citation="entities:4444:1" rel="noopener">Dehua Tb New Decoration A (002043 CH)</a> has given an irrevocable rollover undertaking for its 19.6% stake. </p>
</div>
<p>The Scheme Document was <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0913/2021091301428.pdf" target="_blank" rel="noopener">despatched</a> last night. The Court Meeting is scheduled for the 6 October and provided all resolutions pass, cheques are expected to be despatched on or before the 26 October.</p>
<div>
<p>This Offer still looks done. The IFA considers the terms to be fair and reasonable, but also flags uncertainty as to Nature Home's financial position and operating cash flow on account of its outstanding trade receivables with Evergrande. </p>
</div>
<div>
<p>More below the fold.</p>
</div>


Following its suspension "pursuant to the Code of Takeovers and Mergers" on the 19 July, wood flooring manufacturer Nature Home Holding Company (2083 HK) announced on the 27 July an Offer from its founding shareholders, by way of a Scheme, at HK$1.70/share, bang in line with my earlier estimate. The Offer Price will not be increased. Nature Home does not intend to declare any dividends during the Offer period.  Dehua Tb New Decoration A (002043 CH) has given an irrevocable rollover undertaking for its 19.6% stake. 

The Scheme Document was despatched last night. The Court Meeting is scheduled for the 6 October and provided all resolutions pass, cheques are expected to be despatched on or before the 26 October.

This Offer still looks done. The IFA considers the terms to be fair and reasonable, but also flags uncertainty as to Nature Home's financial position and operating cash flow on account of its outstanding trade receivables with Evergrande. 


More below the fold.


Nature Home (2083 HK): Scheme Doc Out. Court Meeting On 6 Oct. Evergrande Overhang

<div>
<p>After wood flooring manufacturer <a href="https://www.smartkarma.com/entities/nature-home-holding-company" target="_blank" data-smartkarma-citation="entities:20543:1" rel="noopener">Nature Home Holding Company (2083 HK)</a> was <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0719/2021071900227.pdf" target="_blank" rel="noopener">suspended</a> "<em>pursuant to the Code of Takeovers and Mergers</em>" on the 19 July, in <em><a href="https://skr.ma/cek8n" target="_blank" rel="noopener">Nature Home (2083 HK): Possible Takeover Target</a></em> I concluded if an Offer was to be tabled, it would likely be via a Scheme and at ~HK$1.70/share.</p>
<p>And this is exactly what transpired. </p>
<p>Late last night, Nature Home <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0727/2021072701813.pdf" target="_blank" rel="noopener">announced</a> an Offer from its founding shareholders, by way of a Scheme, at HK$1.70/share. The Offer Price will not be increased. Nature Home does not intend to declare any dividends during the Offer period. </p>
</div>
<div>
<a href="https://www.smartkarma.com/entities/dehua-tb-new-decoration-a" target="_blank" data-smartkarma-citation="entities:4444:1" rel="noopener">Dehua Tb New Decoration A (002043 CH)</a> has given an irrevocable rollover undertaking for its 19.6% stake. </div>
<div></div>
<div>
<p>Standard Scheme conditions apply. On account of the Rollover Agreement, Dehua does not form part of the independent shareholders who will vote on the merits of the Scheme.</p>
<p>This Offer looks done.</p>
</div>
<div>
<p>More below the fold.</p>
</div>


After wood flooring manufacturer Nature Home Holding Company (2083 HK) was suspended "pursuant to the Code of Takeovers and Mergers" on the 19 July, in Nature Home (2083 HK): Possible Takeover Target I concluded if an Offer was to be tabled, it would likely be via a Scheme and at ~HK$1.70/share.
And this is exactly what transpired. 
Late last night, Nature Home announced an Offer from its founding shareholders, by way of a Scheme, at HK$1.70/share. The Offer Price will not be increased. Nature Home does not intend to declare any dividends during the Offer period. 


Dehua Tb New Decoration A (002043 CH) has given an irrevocable rollover undertaking for its 19.6% stake. 


Standard Scheme conditions apply. On account of the Rollover Agreement, Dehua does not form part of the independent shareholders who will vote on the merits of the Scheme.
This Offer looks done.


More below the fold.


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.

<p><a href="https://www.smartkarma.com/entities/nature-home-holding-company" target="_blank" data-smartkarma-citation="entities:20543:1" rel="noopener">Nature Home Holding Company (2083 HK)</a> manufactures and sells flooring products and customised home decoration products. After market close on Tuesday, it announced a privatisation offer by way of a scheme of arrangement from New Modern Home Limited. The offeror will offer HK$1.70 cash per scheme share. The bid represents a premium of 39.3% over the closing price of HK$1.22 per share on the last full trading day (16 July 2021 prior to the trading halt). </p><p>The key condition precedents are the headcount test along with the scheme approved by at least 75% disinterested shareholders and &lt;10% rejection by all disinterested shareholders. As disinterested scheme shareholders represent 292.1 million shares or 21.20% of shares outstanding, the 10% blocking stake is 29.2 million shares or 2.12% of shares outstanding. No shareholder holds a blocking stake. </p><div class="content-highlight"><p>Post-privatisation, the offeror plans to re-list all or part of its businesses in the PRC which while refreshingly honest, may not sit well with some shareholders. Overall, we think the offer price is attractive and that the privatisation bid will be successful. </p></div>

Nature Home Holding Company (2083 HK) manufactures and sells flooring products and customised home decoration products. After market close on Tuesday, it announced a privatisation offer by way of a scheme of arrangement from New Modern Home Limited. The offeror will offer HK$1.70 cash per scheme share. The bid represents a premium of 39.3% over the closing price of HK$1.22 per share on the last full trading day (16 July 2021 prior to the trading halt). The key condition precedents are the headcount test along with the scheme approved by at least 75% disinterested shareholders and &lt;10% rejection by all disinterested shareholders. As disinterested scheme shareholders represent 292.1 million shares or 21.20% of shares outstanding, the 10% blocking stake is 29.2 million shares or 2.12% of shares outstanding. No shareholder holds a blocking stake. Post-privatisation, the offeror plans to re-list all or part of its businesses in the PRC which while refreshingly honest, may not sit well with some shareholders. Overall, we think the offer price is attractive and that the privatisation bid will be successful. 

Hong Kong

Nature Home Holding Company Limited is an investment holding company that manufactures and sells a variety of home decoration products. Its offerings include laminated, engineered, solid wood, bamboo, cork, WPC, and SPC flooring, as well as wooden doors, wardrobes, cabinets, and wallpaper. The company also engages in forestry management and the trading of timber and wood products. It was founded in 1995 and is headquartered in Foshan, People's Republic of China.

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Nature Home (2083 HK)

Canvest (1381 HK): Evaluating A Privatisation

Canvest Environmental Protection Group (1381 HK) announces a pre-con Offer from Grandblue Environment Co A (600323 CH) at $4.90/share (best &...

David Blennerhassett