Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Back on the 17 February, <a href="https://www.smartkarma.com/entities/aag-energy-holdings-ltd" target="_blank" data-smartkarma-citation="entities:501:1" rel="noopener">AAG Energy Holdings (2686 HK)</a> announced an underwhelming Offer of HK$1.85/share (declared final) by way of a Scheme from major shareholder <a href="https://www.smartkarma.com/entities/xinjiang-xintai-natural-gas-a" target="_blank" data-smartkarma-citation="entities:27036:1" rel="noopener">Xinjiang Xintai (603393 CH)</a>.</li>
<li>Yesterday, Xinjiang Xintai shareholders approved the proposal. This was expected - it's a total bargain. </li>
<li>AAG shareholders will likely get to vote on the Scheme in early May. They should vote it down.</li>
</ul>


Back on the 17 February, AAG Energy Holdings (2686 HK) announced an underwhelming Offer of HK$1.85/share (declared final) by way of a Scheme from major shareholder Xinjiang Xintai (603393 CH).
Yesterday, Xinjiang Xintai shareholders approved the proposal. This was expected - it's a total bargain. 
AAG shareholders will likely get to vote on the Scheme in early May. They should vote it down.


AAG Energy (2686 HK): Pre-Cons Done. Still A Rubbish Offer

<ul>
<li>On the 17 February, <a href="https://www.smartkarma.com/entities/aag-energy-holdings-ltd" target="_blank" data-smartkarma-citation="entities:501:1" rel="noopener">AAG Energy Holdings (2686 HK)</a> announced an Offer of HK$1.85/share (declared final) by way of a Scheme from major shareholder <a href="https://www.smartkarma.com/entities/xinjiang-xintai-natural-gas-a" target="_blank" data-smartkarma-citation="entities:27036:1" rel="noopener">Xinjiang Xintai Natural Gas (603393 CH).</a>
</li>
<li>At a 10.1% premium to undisturbed and just a 2.2% premium over the highest closing price of HK$1.81/share in the past year, the Consideration price was unreasonable. </li>
<li>FY22 numbers are now out, which further illustrates the Offer price's inadequacy. AAG's trailing PER and EV/EBITDA are  3.6x and 1.4x. Net cash accounts for 41% of AAG's market cap.</li>
</ul>


On the 17 February, AAG Energy Holdings (2686 HK) announced an Offer of HK$1.85/share (declared final) by way of a Scheme from major shareholder Xinjiang Xintai Natural Gas (603393 CH).

At a 10.1% premium to undisturbed and just a 2.2% premium over the highest closing price of HK$1.81/share in the past year, the Consideration price was unreasonable. 
FY22 numbers are now out, which further illustrates the Offer price's inadequacy. AAG's trailing PER and EV/EBITDA are  3.6x and 1.4x. Net cash accounts for 41% of AAG's market cap.


AAG Energy (2686 HK): Full-Year Results Lay Bare Xinjiang Xintai's Low-Balled Offer

<ul>
<li>On the 14 May 2018, coalbed methane producer <a href="https://www.smartkarma.com/entities/aag-energy-holdings-ltd" target="_blank" data-smartkarma-citation="entities:501:1" rel="noopener">AAG Energy Holdings (2686 HK)</a> announced a partial offer (50.5%) from <a href="https://www.smartkarma.com/entities/xinjiang-xintai-natural-gas-a" target="_blank" data-smartkarma-citation="entities:27036:1" rel="noopener">Xinjiang Xintai Natural Gas (603393 CH)</a> at HK$1.75/share. </li>
<li>Xinjiang Xintai has returned to the pit with a $1.85/share Offer by way of a Scheme. The Cancellation Price will NOT be increased.</li>
<li>This is hardly a knockout price, at a 10.1% premium to undisturbed; and just a 2.2% premium over the highest closing price of HK$1.81/share in the past year.</li>
</ul>


On the 14 May 2018, coalbed methane producer AAG Energy Holdings (2686 HK) announced a partial offer (50.5%) from Xinjiang Xintai Natural Gas (603393 CH) at HK$1.75/share. 
Xinjiang Xintai has returned to the pit with a $1.85/share Offer by way of a Scheme. The Cancellation Price will NOT be increased.
This is hardly a knockout price, at a 10.1% premium to undisturbed; and just a 2.2% premium over the highest closing price of HK$1.81/share in the past year.


AAG Energy (2686 HK): Xinjiang Xintai 's Underwhelming Scheme Offer

<ul>
<li>Back on the 14 May 2018, <a href="https://www.smartkarma.com/entities/aag-energy-holdings-ltd" target="_blank" data-smartkarma-citation="entities:501:1" rel="noopener">AAG Energy Holdings (2686 HK)</a> <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2018/0514/ltn201805141016.pdf" target="_blank" rel="noopener">announced</a> a partial offer (50.5%) from <a href="https://www.smartkarma.com/entities/xinjiang-xintai-natural-gas-a" target="_blank" data-smartkarma-citation="entities:27036:1" rel="noopener">Xinjiang Xintai Natural Gas (603393 CH)</a> at HK$1.75/share. </li>
<li>This morning AAG was suspended pursuant to Hong Kong Code on Takeovers and Mergers.</li>
<li>I expect a Scheme Offer from Xinjiang Xintai, which currently holds 56.98%. Potentially, <a href="https://www.smartkarma.com/entities/fosun-international-ltd" target="_blank" data-smartkarma-citation="entities:433:1" rel="noopener">Fosun (656 HK)</a> has returned to the well.</li>
</ul>


Back on the 14 May 2018, AAG Energy Holdings (2686 HK) announced a partial offer (50.5%) from Xinjiang Xintai Natural Gas (603393 CH) at HK$1.75/share. 
This morning AAG was suspended pursuant to Hong Kong Code on Takeovers and Mergers.
I expect a Scheme Offer from Xinjiang Xintai, which currently holds 56.98%. Potentially, Fosun (656 HK) has returned to the well.


AAG Energy (2686 HK) Suspended: Xinjiang Xintai Offer?

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.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/beach-energy-ltd" target="_blank" data-smartkarma-citation="entities:795:1" rel="noopener">Beach Energy (BPT AU)</a>’s all-cash proposal is A$0.20 per share and <a href="https://www.smartkarma.com/entities/strike-energy-ltd" target="_blank" data-smartkarma-citation="entities:12473:1" rel="noopener">Strike Energy (STX AU)</a>’s all-scrip proposal is 0.775x STX shares per <a href="https://www.smartkarma.com/entities/warrego-energy-ltd-082ab214-f4bb-4224-b321-8977486cd661" target="_blank" data-smartkarma-citation="entities:7808:1" rel="noopener">Petrel Energy (WGO AU)</a> share. </li>
<li>BPT’s all-cash offer provides value certainty. On the other hand, STX’s all-scrip offer lets shareholders get exposure to 100% interest in the West Erregulla project.</li>
<li>Both offers are reasonable but far from knockout bids, which suggests room for a further bidding round. At the last close, BPT’s offer is 3.2% higher than STX’s offer.</li>
</ul>



Beach Energy (BPT AU)’s all-cash proposal is A$0.20 per share and Strike Energy (STX AU)’s all-scrip proposal is 0.775x STX shares per Petrel Energy (WGO AU) share. 
BPT’s all-cash offer provides value certainty. On the other hand, STX’s all-scrip offer lets shareholders get exposure to 100% interest in the West Erregulla project.
Both offers are reasonable but far from knockout bids, which suggests room for a further bidding round. At the last close, BPT’s offer is 3.2% higher than STX’s offer.


Warrego (WGO AU) Bidding War Between Strike (STX AU) And Beach (BPT AU)

Australia

Senex Energy Limited explores for and acquires crude oil and natural gas.  The Company is focused on Oil in the Cooper Basin, Unconventional gas in the Cooper Basin, and Coal seam gas in the Surat Basin.

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Senex Energy (SXY AU)

AAG Energy (2686 HK): Pre-Cons Done. Still A Rubbish Offer

I would vote down this Scheme. I would, however, still buy here given the low Offer premium and limited downside. Currently trading at HK$1.62...

David Blennerhassett

AAG Energy (2686 HK): Full-Year Results Lay Bare Xinjiang Xintai's Low-Balled Offer

I would vote down this Scheme. I would, however, still buy here given the low Offer premium and limited downside. Currently trading at HK$1.67...

David Blennerhassett

AAG Energy (2686 HK): Xinjiang Xintai 's Underwhelming Scheme Offer

A 10.1% premium compares to the Offer price premiums for Sino Gas and Senex of 19% and 25%. I 'd still buy here given the low Offer premium and...

David Blennerhassett

AAG Energy (2686 HK) Suspended: Xinjiang Xintai Offer?

If simply using the average premium to last close in HK takeovers of 37% in 2022, then an Offer price of ~HK$2.30 is feasible, which is a lifetime...

David Blennerhassett

Warrego (WGO AU) Bidding War Between Strike (STX AU) And Beach (BPT AU)

Both offers are reasonable but far from knockout bids, which suggests room for a further bidding round. At the last close, BPT’s offer is 3.2%...

Arun George

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