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.

Event-Driven

<ul>
<li>The vote on Fosun Pharma’s HK$24.60 offer for <a href="https://www.smartkarma.com/entities/shanghai-henlius-biotech-inc" target="_blank" data-smartkarma-citation="entities:27888:1" rel="noopener">Shanghai Henlius Biotech (2696 HK)</a> is on 22 January. The gross spread has ballooned to 21.8%, which suggests a deal break.</li>
<li>I previously stated that LVC’s trading behaviour over the coming days will indicate its voting intentions. Unfortunately, this behaviour suggests a high likelihood of blocking the vote.</li>
<li>Fosun Pharma has two potential options to secure LVC’s backing: increase the share alternative cap or introduce a rollover option. Both have challenges and are, therefore, not viable options.</li>
</ul>


The vote on Fosun Pharma’s HK$24.60 offer for Shanghai Henlius Biotech (2696 HK) is on 22 January. The gross spread has ballooned to 21.8%, which suggests a deal break.
I previously stated that LVC’s trading behaviour over the coming days will indicate its voting intentions. Unfortunately, this behaviour suggests a high likelihood of blocking the vote.
Fosun Pharma has two potential options to secure LVC’s backing: increase the share alternative cap or introduce a rollover option. Both have challenges and are, therefore, not viable options.


Henlius (2696 HK): Hurtling Towards a Likely Deal Break

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>I was wrong. Loyal Valley Capital (LVC) have stopped buying <a href="https://www.smartkarma.com/entities/shanghai-henlius-biotech-inc" target="_blank" data-smartkarma-citation="entities:27888:1" rel="noopener">Shanghai Henlius (2696 HK)</a> - or have not bought since reaching a blocking stake of 7.8295% on the 9th January. </li>
<li>LVC could either use that stake as leverage to negotiate with the Offeror on the scrip terms. Or blow up the deal and pick up shares after the deal breaks </li>
<li>OR perhaps, as per my initial impression,  LVC tenders. And they may still do that. It should be this straightforward; but the fact that it is not raises questions. </li>
</ul>


I was wrong. Loyal Valley Capital (LVC) have stopped buying Shanghai Henlius (2696 HK) - or have not bought since reaching a blocking stake of 7.8295% on the 9th January. 
LVC could either use that stake as leverage to negotiate with the Offeror on the scrip terms. Or blow up the deal and pick up shares after the deal breaks 
OR perhaps, as per my initial impression,  LVC tenders. And they may still do that. It should be this straightforward; but the fact that it is not raises questions. 


Henlius (2696 HK): LVC Sits On A Blocking Stake. And Me (Maybe) Eating Humble Pie

<ul>
<li>The vote on Fosun Pharma’s HK$24.60 offer for <a href="https://www.smartkarma.com/entities/shanghai-henlius-biotech-inc" target="_blank" data-smartkarma-citation="entities:27888:1" rel="noopener">Shanghai Henlius Biotech (2696 HK)</a> is on 22 January. The gross spread ballooned today due to LVC’s amassing a blocking stake.</li>
<li>There are valid arguments for LVC to block the vote or to support the offer. LVC’s trading behaviour over the coming days will point to its voting intentions. </li>
<li>I continue to believe that LVC will support the offer. At the current price and for a 15 February payment, the gross/annualised spread is 9.1%/160%.</li>
</ul>


The vote on Fosun Pharma’s HK$24.60 offer for Shanghai Henlius Biotech (2696 HK) is on 22 January. The gross spread ballooned today due to LVC’s amassing a blocking stake.
There are valid arguments for LVC to block the vote or to support the offer. LVC’s trading behaviour over the coming days will point to its voting intentions. 
I continue to believe that LVC will support the offer. At the current price and for a 15 February payment, the gross/annualised spread is 9.1%/160%.


Henlius (2696 HK): Test of Nerves Awaiting LVC’s Next Move

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Shanghai Henlius Biotech  / Equity Bottom-Up

<ul>
<li>For Fosun, every major capital operation is the result of careful consideration after a long time. If it is a deal that Mr. Guo fully supports, there’s basically no problem.</li>
<li>For the privatization, the board of directors of Henlius has no special opposition. We think that this privatization would have no impact on the operation of Henlius in the future,</li>
<li>As the phenomenon of undervaluation of Henlius is difficult to fundamentally change, the Cancellation Price is attractive for most investors. There’re risks if choosing Share Alternative. Cash Alternative is preferred. </li>
</ul>


For Fosun, every major capital operation is the result of careful consideration after a long time. If it is a deal that Mr. Guo fully supports, there’s basically no problem.
For the privatization, the board of directors of Henlius has no special opposition. We think that this privatization would have no impact on the operation of Henlius in the future,
As the phenomenon of undervaluation of Henlius is difficult to fundamentally change, the Cancellation Price is attractive for most investors. There’re risks if choosing Share Alternative. Cash Alternative is preferred. 


Shanghai Henlius Biotech (2696 HK) - Some Thoughts About the Privatization

<ul>
<li>Ahead of <a href="https://www.smartkarma.com/entities/shanghai-henlius-biotech-inc" target="_blank" data-smartkarma-citation="entities:27888:1" rel="noopener">Shanghai Henlius Biotech (2696 HK)</a>'s EGM and Court Meeting on the 22 January, the focus has shifted to Loyal Valley Capital (LVC)'s continued buying in the market.</li>
<li>After the close of market last Friday, LVC held <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2025/0110/2025011000368.pdf" target="_blank" rel="noopener">7.8295%</a>, above the 7.826% blocking stake. That % was as at 9th January. I assume LVC are still buying.</li>
<li>Yet if you analyse how LVC has traded in and out of Henlius, they are not in it to block. They're in for the back-end scrip option.  </li>
</ul>


Ahead of Shanghai Henlius Biotech (2696 HK)'s EGM and Court Meeting on the 22 January, the focus has shifted to Loyal Valley Capital (LVC)'s continued buying in the market.
After the close of market last Friday, LVC held 7.8295%, above the 7.826% blocking stake. That % was as at 9th January. I assume LVC are still buying.
Yet if you analyse how LVC has traded in and out of Henlius, they are not in it to block. They're in for the back-end scrip option.  


Henlius (2696 HK): LVC Won't Block. Buy Here & On Weakness

China

Shanghai Henlius Biotech, Inc develops and produces drugs. The Company develops and produces monoclonal antibody biosimilar drugs, bio betters, novel monoclonal antibodys, and other drugs. Shanghai Henlius Biotech throughout China.

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Shanghai Henlius Biotech (2696 HK)

Henlius (2696 HK): Hurtling Towards a Likely Deal Break

LVC’s trading behaviour suggests that it is likely to block the vote. Fosun Pharma has two potential options to secure LVC’s backing. Both have...

Arun George

Henlius (2696 HK): LVC Sits On A Blocking Stake. And Me (Maybe) Eating Humble Pie

I didn't expect LVC to do anything other than take scrip. And they may just do that. It should be this straightforward; but the fact that it is not...

David Blennerhassett

Henlius (2696 HK): Test of Nerves Awaiting LVC’s Next Move

There are valid arguments for LVC to block the vote and support the offer. LVC’s trading behaviour over the coming days will point to its voting...

Arun George