Blue Lotus Non US Internet research, Blue Lotus Research Institute

Ying Pan

Blue Lotus Non US Internet research

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

Thematic (Sector/Industry)

<ul>
<li>
Online Travel: Korea and Japan eased tourist visa for Chinese. TRIP.com saw traffic gains in C4Q24;</li>
<li>
Internet Platform: Scalping on government consumption vouchers in Shanghai will shift future programs to major Internet platforms;</li>
<li>
Online game: December game code approval was both big and commercial. NetEase and Tencent games were included.</li>
</ul>



Online Travel: Korea and Japan eased tourist visa for Chinese. TRIP.com saw traffic gains in C4Q24;

Internet Platform: Scalping on government consumption vouchers in Shanghai will shift future programs to major Internet platforms;

Online game: December game code approval was both big and commercial. NetEase and Tencent games were included.


China Internet Weekly Wrap (52/​2024): Visa Free Entry, Social Gift Sending & E-Commerce Tax

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>In officially decided cases concerning dissentient shareholders in privatised US-listed China plays, the uplift to the merger price versus time value of money and legal costs, is less than ideal. </li>
<li>The outcome for each case will turn on the underlying facts. But it would appear <a href="https://www.smartkarma.com/entities/ikang-healthcare-group-adr" target="_blank" data-smartkarma-citation="entities:741:1" rel="noopener">iKang Healthcare Group (ADR) (KANG US)</a> is following a similar trend.  </li>
<li>Reportedly the uplift to the iKang merger price is just 10%. Dissenters can still lodge an appeal.</li>
</ul>


In officially decided cases concerning dissentient shareholders in privatised US-listed China plays, the uplift to the merger price versus time value of money and legal costs, is less than ideal. 
The outcome for each case will turn on the underlying facts. But it would appear iKang Healthcare Group (ADR) (KANG US) is following a similar trend.  
Reportedly the uplift to the iKang merger price is just 10%. Dissenters can still lodge an appeal.


IKang Healthcare (KANG US): Another Setback For Dissenters

Articles from Caixin Global, Caixin Global

Caixin Global

Articles from Caixin Global

Caixin is a media group dedicated to providing financial and business news through periodicals, online content, mobile apps, conferences, books and TV/video programs. Caixin aims to blaze a trail that helps traditional media prosper in the new media age through integrated multimedia platforms.

News from Caixin

Cross Asset Strategy

<ul><li>China-Middle East /: Historic Middle East summits cap Xi’s year-end diplomatic push</li><li>Covid-19 /: China ends quarantine requirement for inbound travelers despite surge in Covid-19 cases</li><li>Fraud /: Fuyuan Beauty Salon’s chairman gets 16-year sentence for fundraising fraud</li></ul>

China-Middle East /: Historic Middle East summits cap Xi’s year-end diplomatic pushCovid-19 /: China ends quarantine requirement for inbound travelers despite surge in Covid-19 casesFraud /: Fuyuan Beauty Salon’s chairman gets 16-year sentence for fundraising fraud

CX Daily: Historic Middle East Summits Cap Xi’s Year-End Diplomatic Push

Event-Driven

As discussed in <a href="https://skr.ma/yN7Jw" target="_blank" rel="noopener">Jardine Matheson: Strategic Buyout Done</a>, after <a href="https://www.smartkarma.com/entities/jardine-strategic-holdings-ltd" target="_blank" data-smartkarma-citation="entities:15081:1" rel="noopener">Jardine Strategic Holdings (JS SP)</a> shareholders <a href="https://links.sgx.com/FileOpen/JSH.ashx?App=Announcement&amp;FileID=659247" target="_blank" rel="noopener">voted through</a>, as expected, the Offer from <a href="https://www.smartkarma.com/entities/jardine-matheson-holdings-ltd" target="_blank" data-smartkarma-citation="entities:19718:1" rel="noopener">Jardine Matheson Holdings (JM SP)</a>, after the vote, Matheson said a number of shareholders in Strategic voted against the acquisition, but also that:
<div>
<blockquote>
a large number of shares voted against the resolution were held by investors who were not shareholders at the time of the announcement of the Acquisition on 8 March 2021. Some investors have indicated an intention to apply to the Court in Bermuda to appraise the fair value of their shares, in accordance with the process described in the shareholder circular issued by Jardine Strategic in connection with the Acquisition.
</blockquote>
</div>
I initially wrote "Matheson appears to be suggesting that those who held shares before the announcement, and those who held after, potentially have different cases to argue."
But after consulting with my colleague <a href="https://www.smartkarma.com/profiles/travis-lundy" target="_blank" data-smartkarma-citation="accounts:25" rel="noopener">Travis Lundy</a>, I omitted this line, as it was effectively moot.
Matheson would have singled out these short-term investors - hedge funds - irrespectively. Yet, such a statement is irrelevant. All shareholders, as at the record date of the Special General Meeting, have the same rights to be treated fairly and rights to dissension.
I note some recent commentary in the media addressing Matheson's oblique reference to hedge funds, so I'll provide some commentary sourced from legal references.
Of greater importance is what these dissenters will cost Matheson at the end of the day.
More below the fold.
<hr>
I've extensively dealt with appraisal rights in the Cayman Islands in past insights, which can also provide guidance as to how dissension may be interpreted in Bermuda (where Strategic is incorporated):
<a href="https://skr.ma/TDg1T" target="_blank" rel="noopener">Homecoming For Chinese Companies: Appraisal Rights &amp; Fair Value</a>
<a href="https://skr.ma/Hy3JW" target="_blank" rel="noopener">Trina Solar: Appraisal Rights Judgment Another Setback for Dissenters</a>
<a href="https://skr.ma/H7E1t" target="_blank" rel="noopener">Changyou (CYOU US): Short-Form Merger Dissent Now Permitted</a>

As discussed in Jardine Matheson: Strategic Buyout Done, after Jardine Strategic Holdings (JS SP) shareholders voted through, as expected, the Offer from Jardine Matheson Holdings (JM SP), after the vote, Matheson said a number of shareholders in Strategic voted against the acquisition, but also that:


a large number of shares voted against the resolution were held by investors who were not shareholders at the time of the announcement of the Acquisition on 8 March 2021. Some investors have indicated an intention to apply to the Court in Bermuda to appraise the fair value of their shares, in accordance with the process described in the shareholder circular issued by Jardine Strategic in connection with the Acquisition.


I initially wrote "Matheson appears to be suggesting that those who held shares before the announcement, and those who held after, potentially have different cases to argue."
But after consulting with my colleague Travis Lundy, I omitted this line, as it was effectively moot.
Matheson would have singled out these short-term investors - hedge funds - irrespectively. Yet, such a statement is irrelevant. All shareholders, as at the record date of the Special General Meeting, have the same rights to be treated fairly and rights to dissension.
I note some recent commentary in the media addressing Matheson's oblique reference to hedge funds, so I'll provide some commentary sourced from legal references.
Of greater importance is what these dissenters will cost Matheson at the end of the day.
More below the fold.

I've extensively dealt with appraisal rights in the Cayman Islands in past insights, which can also provide guidance as to how dissension may be interpreted in Bermuda (where Strategic is incorporated):
Homecoming For Chinese Companies: Appraisal Rights &amp; Fair Value
Trina Solar: Appraisal Rights Judgment Another Setback for Dissenters
Changyou (CYOU US): Short-Form Merger Dissent Now Permitted

<div>
Back on the 6 July, <a href="https://www.smartkarma.com/entities/sina-corp-china" target="_blank" data-smartkarma-citation="entities:22691:1" rel="noopener">Sina Corp (Class A) (SINA US)</a> <a href="http://ir.sina.com/index.php/static-files/69e95aee-2729-457f-be56-73628090b8ea" target="_blank" rel="noopener">announced</a> the receipt of a preliminary non-binding “going private” proposal from New Wave MMXV - a company controlled by its chairman/CEO Charles Chao - at US$41/share,  a ~20% premium to the average closing price during the 30 trading days prior to the announcement.
Yesterday, SINA announced it had <a href="http://ir.sina.com/static-files/de1ddd0f-354f-42de-9b33-b1bc414ab1b4" target="_blank" rel="noopener">entered</a> into an Agreement and Plan of Merger with New Wave pursuant to which New Wave will acquire all of the outstanding ordinary shares not owned at US$43.30/share (an 18.1% premium to the undisturbed price).
Despite the 5.6% bump to the initial non-binding proposal, the Offer price still looks light. However, Chao/New Wave controls ~61% of the voting power, and the merger requires two-thirds approval.
The merger is expected to close in the 1Q21. 
</div>
<div>
As always, more below the fold.
</div>


Back on the 6 July, Sina Corp (Class A) (SINA US) announced the receipt of a preliminary non-binding “going private” proposal from New Wave MMXV - a company controlled by its chairman/CEO Charles Chao - at US$41/share,  a ~20% premium to the average closing price during the 30 trading days prior to the announcement.
Yesterday, SINA announced it had entered into an Agreement and Plan of Merger with New Wave pursuant to which New Wave will acquire all of the outstanding ordinary shares not owned at US$43.30/share (an 18.1% premium to the undisturbed price).
Despite the 5.6% bump to the initial non-binding proposal, the Offer price still looks light. However, Chao/New Wave controls ~61% of the voting power, and the merger requires two-thirds approval.
The merger is expected to close in the 1Q21. 


As always, more below the fold.


China

Qunar Cayman Islands Limited operates a search-based commerce platform. The Company provides travel product information from thousands of travel services providers in one location. Qunar Cayman Islands offers its services in China.

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Qunar Cayman Islands (QUNR US)

IKang Healthcare (KANG US): Another Setback For Dissenters

In officially decided cases concerning dissentient shareholders in privatised US-listed China plays, the uplift to the takeover price versus time...

David Blennerhassett

CX Daily: Historic Middle East Summits Cap Xi’s Year-End Diplomatic Push

Historic Middle East summits cap Xi’s year-end diplomatic push. China ends quarantine requirement for inbound travelers. Fuyuan Beauty Salon’s...

Caixin Global

Jardine Matheson: Lessons in Dissent

At a 13% discount to NAV, this not attractive for a complicated holding company structure. In all likelihood, near-term news may focus on these...

David Blennerhassett

SINA Corp: Offer Firmed. Price Sweetened

Sina Corp (Class A) (SINA US) looks sets to join the growing list of Chinese companies seeking to delist in the US and relist, ostensibly in Hong...

David Blennerhassett

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52-week Range

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China Internet Weekly Wrap (52/​2024): Visa Free Entry, Social Gift Sending & E-Commerce Tax

​Korea and Japan ease tourist visa for Chinese, Shanghai government vouchers likely shift to major Internet platforms; NetEase and Tencent games...

Blue Lotus Research Institute

IKang Healthcare (KANG US): Another Setback For Dissenters

In officially decided cases concerning dissentient shareholders in privatised US-listed China plays, the uplift to the takeover price versus time...

David Blennerhassett

CX Daily: Historic Middle East Summits Cap Xi’s Year-End Diplomatic Push

Historic Middle East summits cap Xi’s year-end diplomatic push. China ends quarantine requirement for inbound travelers. Fuyuan Beauty Salon’s...

Caixin Global

Jardine Matheson: Lessons in Dissent

At a 13% discount to NAV, this not attractive for a complicated holding company structure. In all likelihood, near-term news may focus on these...

David Blennerhassett

SINA Corp: Offer Firmed. Price Sweetened

Sina Corp (Class A) (SINA US) looks sets to join the growing list of Chinese companies seeking to delist in the US and relist, ostensibly in Hong...

David Blennerhassett

China Internet Weekly Wrap (52/2024): Visa Free Entry, Social Gift Sending & E-Commerce Tax

Korea and Japan ease tourist visa for Chinese, Shanghai government vouchers likely shift to major Internet platforms; NetEase and Tencent games...