IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

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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.

Event-Driven

China Vast Industrial Urban Development / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-vast-industrial-urban-development-company-limited" target="_blank" data-smartkarma-citation="entities:3212:1" rel="noopener">China Vast Industrial Urban Development (6166 HK)</a>'s scheme document is out with the court meeting scheduled for 23 November. The IFA considers the offer to be fair and reasonable. </li>
<li>Key conditions include approval by at least 75% of independent shareholders (&lt;10% rejection). Shareholders with blocking stakes either provided irrecovables or will likely support the offer.</li>
<li>The offer is not great but headcount test is not applicable. At last close and for the 14 December payment, the gross and annualised spread is 0.8% and 6.7%, respectively.</li>
</ul>



China Vast Industrial Urban Development (6166 HK)'s scheme document is out with the court meeting scheduled for 23 November. The IFA considers the offer to be fair and reasonable. 
Key conditions include approval by at least 75% of independent shareholders (&lt;10% rejection). Shareholders with blocking stakes either provided irrecovables or will likely support the offer.
The offer is not great but headcount test is not applicable. At last close and for the 14 December payment, the gross and annualised spread is 0.8% and 6.7%, respectively.


Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Lifestyle International Holdings / Event-Driven

<ul>
<li>Back on the 5 August, Thomas Yau, <strong><a href="https://www.smartkarma.com/entities/lifestyle-international-holdings-ltd" target="_blank" data-smartkarma-citation="entities:112:1" rel="noopener">Lifestyle International Holdings (1212 HK)</a></strong>'s controlling shareholder, tabled a Scheme at HK$5/share, a 62.3% premium to last close.  </li>
<li>The Scheme Doc is now out with the Court Meeting on the 21st of November. The outcome of this transaction will pivot off the reassessed net asset value of HK$10.60/share.</li>
<li>Trading at a gross spread of 9.6% using yesterday's close, reflecting the perceived opportunistic nature of the Offer. Yet Hong Kong's 2018 visitor glory days remain a long way off. </li>
</ul>


Back on the 5 August, Thomas Yau, Lifestyle International Holdings (1212 HK)'s controlling shareholder, tabled a Scheme at HK$5/share, a 62.3% premium to last close.  
The Scheme Doc is now out with the Court Meeting on the 21st of November. The outcome of this transaction will pivot off the reassessed net asset value of HK$10.60/share.
Trading at a gross spread of 9.6% using yesterday's close, reflecting the perceived opportunistic nature of the Offer. Yet Hong Kong's 2018 visitor glory days remain a long way off. 


Lifestyle (1212 HK): Timing Is Everything As Shareholders Go To Vote on 21 Nov

<ul>
<li>The <a href="https://www.smartkarma.com/entities/lifestyle-international-holdings-ltd" target="_blank" data-smartkarma-citation="entities:112:1" rel="noopener">Lifestyle International Holdings (1212 HK)</a> scheme document is out with the court meeting scheduled for 21 November. The IFA considers the HK$5.00 offer to be fair and reasonable. </li>
<li>Key conditions include approval by at least 75% of independent shareholders (&lt;10% rejection). Headcount test not applicable. No shareholder holds a blocking stake.</li>
<li>The offer is light but likely to succeed. At last close and for a 30 December payment, the gross and annualised spread to the offer is 9.6% and 65.7%, respectively.</li>
</ul>


The Lifestyle International Holdings (1212 HK) scheme document is out with the court meeting scheduled for 21 November. The IFA considers the HK$5.00 offer to be fair and reasonable. 
Key conditions include approval by at least 75% of independent shareholders (&lt;10% rejection). Headcount test not applicable. No shareholder holds a blocking stake.
The offer is light but likely to succeed. At last close and for a 30 December payment, the gross and annualised spread to the offer is 9.6% and 65.7%, respectively.


Lifestyle International’s Court Meeting on 21 November

<ul>
<li>The Scheme Document for <a href="https://www.smartkarma.com/entities/chinese-estates-holdings-limited" target="_blank" data-smartkarma-citation="entities:20954:1" rel="noopener">Chinese Estates Holdings (127 HK)</a> has been <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/1123/2021112301050.pdf" target="_blank" rel="noopener">dispatched</a>. The Scheme Meeting will take place on the 17 December. </li>
<li>Founder, Joseph Lau, and his wife Chan Hoi Wan, who control 74.99% of shares out, are offering HK$4.00/share for Chinese Estates, a leading property developer in Hong Kong.</li>
<li>The Independent Financial Adviser (Gram Capital) considers the Scheme to be fair and reasonable. Assuming the Scheme gets up, payment is on or before the 19 January 2022.</li>
</ul>


The Scheme Document for Chinese Estates Holdings (127 HK) has been dispatched. The Scheme Meeting will take place on the 17 December. 
Founder, Joseph Lau, and his wife Chan Hoi Wan, who control 74.99% of shares out, are offering HK$4.00/share for Chinese Estates, a leading property developer in Hong Kong.
The Independent Financial Adviser (Gram Capital) considers the Scheme to be fair and reasonable. Assuming the Scheme gets up, payment is on or before the 19 January 2022.


Chinese Estates (127 HK): Scheme Doc Out. Meeting on 17 December

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<div>
<p>After <a href="https://www.smartkarma.com/entities/polytec-asset-holdings-ltd" target="_blank" data-smartkarma-citation="entities:13322:1" rel="noopener">Polytec Asset Holdings (208 HK)</a>'s shares were <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0118/2021011800179.pdf" target="_blank" rel="noopener">suspended</a> ahead of trading on the 18 January "<em>pursuant to The Codes on Takeovers and Mergers which constitute inside information of the Company</em>", Polytec has now <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0121/2021012101027.pdf" target="_blank" rel="noopener">announced</a> a proposed privatisation by way of Scheme from Intellinsight Holdings Limited, a vehicle wholly-owned by Or Wai Sheun, Polytec's chairman.</p>
</div>
<div>
<p>The Offer price is HK$1.50/share, a 61.29% premium to last close, and a 72.55% premium to the average closing price over the previous 30 trading days, and a decade+ high. <strong>The Offer price will not be increased</strong>. No dividend has been declared, nor is one expected to be declared during the Offer period. </p>
</div>
<p>The Offeror - Intellinsight Holdings Limited  - holds 2,389.9mn shares of 53.84% of shares out. Excluding an additional 0.67% of shares out held by concert parties, leaves 2,019.1mn shares or 45.49% of shares out held by Independent shareholders.</p>
</div>
<div>
<p>Key Scheme conditions include at least 75% of Independent Shares voting FOR &amp; not more than 10% of the votes attached to ALL the Independent Shares against. Therefore the blocking stake is 201.9mn shares, or 4.549% of shares out. No single shareholder has declared such a stake. No irrevocables have been given.</p>
</div>
<div>
<p>The headcount test applies as Polytec is Cayman incorporated. </p>
</div>
<div>
<p>This deal looks done.</p>
</div>
<div>
<p>As always, more below the fold. </p>
</div>



After Polytec Asset Holdings (208 HK)'s shares were suspended ahead of trading on the 18 January "pursuant to The Codes on Takeovers and Mergers which constitute inside information of the Company", Polytec has now announced a proposed privatisation by way of Scheme from Intellinsight Holdings Limited, a vehicle wholly-owned by Or Wai Sheun, Polytec's chairman.


The Offer price is HK$1.50/share, a 61.29% premium to last close, and a 72.55% premium to the average closing price over the previous 30 trading days, and a decade+ high. The Offer price will not be increased. No dividend has been declared, nor is one expected to be declared during the Offer period. 

The Offeror - Intellinsight Holdings Limited  - holds 2,389.9mn shares of 53.84% of shares out. Excluding an additional 0.67% of shares out held by concert parties, leaves 2,019.1mn shares or 45.49% of shares out held by Independent shareholders.


Key Scheme conditions include at least 75% of Independent Shares voting FOR &amp; not more than 10% of the votes attached to ALL the Independent Shares against. Therefore the blocking stake is 201.9mn shares, or 4.549% of shares out. No single shareholder has declared such a stake. No irrevocables have been given.


The headcount test applies as Polytec is Cayman incorporated. 


This deal looks done.


As always, more below the fold. 


Polytec Asset (208 HK): Offer By Way Of A Scheme

Hong Kong

Polytec Asset Holdings Limited invests in and trades securities.  The Company also invests in, develops, and trades properties.  In addition, Polytec Asset manufactures ice and provides cold storage and related services.

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Polytec Asset Holdings (208 HK)

China VAST’s Vote on 23 November

The offer is not great but this is a done deal. At the last close and for the 14 December payment, the annualised spread is 6.7%.

Arun George

Lifestyle (1212 HK): Timing Is Everything As Shareholders Go To Vote on 21 Nov

Expect Lifestyle to trade wide-ish to terms given the vote risk. But on balance, I think Yau has got the timing just right.

David Blennerhassett

Lifestyle International’s Court Meeting on 21 November

The offer is light but there is no headcount test. No shareholder holds a blocking stake. At the last close, the gross spread to the offer is 9.6%.

Arun George

Chinese Estates (127 HK): Scheme Doc Out. Meeting on 17 December

A gross/annualised spread 8.1%/66.2% is not unattractive. But I'd expect pushback due to low liquidity and heading into year-end.

David Blennerhassett

Polytec Asset (208 HK): Offer By Way Of A Scheme

0.5x P/B for a PRC/Macau property play is a total bargain. Yet Polytec has perennially traded at a significant discount to book. Buy here - $1.43...

David Blennerhassett

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