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>We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.</li>
<li>Highest spreads: <a href="https://www.smartkarma.com/entities/slb-development-ltd" target="_blank" data-smartkarma-citation="entities:26989:1" rel="noopener">SLB Development (SLB SP)</a>, <a href="https://www.smartkarma.com/entities/japfa-ltd" target="_blank" data-smartkarma-citation="entities:15597:1" rel="noopener">Japfa Ltd (JAP SP)</a>, <a href="https://www.smartkarma.com/entities/seven-i-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:1041:1" rel="noopener">Seven &amp; I Holdings (3382 JP)</a>, <a href="https://www.smartkarma.com/entities/lifestyle-china-group-ltd" target="_blank" data-smartkarma-citation="entities:26090:1" rel="noopener">Lifestyle China (2136 HK)</a>, <a href="https://www.smartkarma.com/entities/get-nice-financial-group-ltd" target="_blank" data-smartkarma-citation="entities:29667:1" rel="noopener">Get Nice Financial Group Ltd (1469 HK)</a>.
</li>
<li>Lowest spreads: <a href="https://www.smartkarma.com/entities/makino-milling-machine-co" target="_blank" data-smartkarma-citation="entities:5200:1" rel="noopener">Makino Milling Machine Co (6135 JP)</a>, <a href="https://www.smartkarma.com/entities/avjennings-ltd" target="_blank" data-smartkarma-citation="entities:12578:1" rel="noopener">Avjennings Ltd (AVJ AU)</a>, <a href="https://www.smartkarma.com/entities/fuji-soft-inc" target="_blank" data-smartkarma-citation="entities:17504:1" rel="noopener">Fuji Soft Inc (9749 JP)</a>, <a href="https://www.smartkarma.com/entities/wide-bay-australia-ltd" target="_blank" data-smartkarma-citation="entities:18747:1" rel="noopener">Auswide Bank (ABA AU)</a>, <a href="https://www.smartkarma.com/entities/pressance-corp" target="_blank" data-smartkarma-citation="entities:17783:1" rel="noopener">Pressance Corp (3254 JP)</a>. 
</li>
</ul>


We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
Highest spreads: SLB Development (SLB SP), Japfa Ltd (JAP SP), Seven &amp; I Holdings (3382 JP), Lifestyle China (2136 HK), Get Nice Financial Group Ltd (1469 HK).

Lowest spreads: Makino Milling Machine Co (6135 JP), Avjennings Ltd (AVJ AU), Fuji Soft Inc (9749 JP), Auswide Bank (ABA AU), Pressance Corp (3254 JP). 



Merger Arb Mondays (27 Jan) - Fosun Tourism, Get Nice, Lifestyle China, Canvest, Japfa, SLB

<ul>
<li>
<a href="https://www.smartkarma.com/entities/slb-development-ltd" target="_blank" data-smartkarma-citation="entities:26989:1" rel="noopener">SLB Development (SLB SP)</a> disclosed a scheme privatisation from <a href="https://www.smartkarma.com/entities/lian-beng-group-ltd" target="_blank" data-smartkarma-citation="entities:17636:1" rel="noopener">Lian Beng (LBG SP)</a> at S$0.23 per share, a 36.1% premium to the undisturbed price of S$0.169 (22 January).</li>
<li>The Ong family previously privatised Lian Beng, the parent company. The offer price, which is equal to the IPO price, is attractive compared to peer multiples and historical trading ranges.</li>
<li>The scheme vote is low-risk, as no disinterested shareholder holds a blocking stake, and the offer is attractive. Expect a scheme meeting in April.  </li>
</ul>



SLB Development (SLB SP) disclosed a scheme privatisation from Lian Beng (LBG SP) at S$0.23 per share, a 36.1% premium to the undisturbed price of S$0.169 (22 January).
The Ong family previously privatised Lian Beng, the parent company. The offer price, which is equal to the IPO price, is attractive compared to peer multiples and historical trading ranges.
The scheme vote is low-risk, as no disinterested shareholder holds a blocking stake, and the offer is attractive. Expect a scheme meeting in April.  


SLB Development (SLB SP): Ong Family’s S$0.23 Scheme Offer

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>Singaporean construction firm <a href="https://www.smartkarma.com/entities/lian-beng-group-ltd" target="_blank" data-smartkarma-citation="entities:17636:1" rel="noopener">Lian Beng (LBG SP)</a> has <a href="https://links.sgx.com/FileOpen/Offer_Announcement.ashx?App=Announcement&amp;FileID=753708" target="_blank" rel="noopener">announced</a> a voluntary unconditional cash Offer from the controlling Ong family, via investment holding company OSC Capital.</li>
<li>The Offer Price of S$0.62/share (not declared final) is a mediocre 8.8% premium to last close and a 59.7% discount to the 30 November 2022 NAV of S$1.538/share.</li>
<li>The announcement fails to mention the NAV/share. The IFA considered the 2021 Mandatory Offer of S$0.50/share not fair and not reasonable. Expect a similar conclusion </li>
</ul>


Singaporean construction firm Lian Beng (LBG SP) has announced a voluntary unconditional cash Offer from the controlling Ong family, via investment holding company OSC Capital.
The Offer Price of S$0.62/share (not declared final) is a mediocre 8.8% premium to last close and a 59.7% discount to the 30 November 2022 NAV of S$1.538/share.
The announcement fails to mention the NAV/share. The IFA considered the 2021 Mandatory Offer of S$0.50/share not fair and not reasonable. Expect a similar conclusion 


<ul>
<li>
<a href="https://www.smartkarma.com/entities/chip-eng-seng-corp-ltd" target="_blank" data-smartkarma-citation="entities:6441:1" rel="noopener">Chip Eng Seng Corp (CHIP SP)</a> disclosed a revised conditional VGO from the Tangs at S$0.75, a 4.2% premium to the previous offer of S$0.72. The offer is final.</li>
<li>The offeror (47.27% of outstanding shares) and immediate family represent 50.49% of outstanding shares or 48.63% of diluted shares, which is just shy of the 50%+ minimum acceptance condition. </li>
<li>The bump was to increase the chances of privatisation rather than hitting the 50%+ minimum acceptance condition. At the last close, the gross spread is 1.4%. </li>
</ul>



Chip Eng Seng Corp (CHIP SP) disclosed a revised conditional VGO from the Tangs at S$0.75, a 4.2% premium to the previous offer of S$0.72. The offer is final.
The offeror (47.27% of outstanding shares) and immediate family represent 50.49% of outstanding shares or 48.63% of diluted shares, which is just shy of the 50%+ minimum acceptance condition. 
The bump was to increase the chances of privatisation rather than hitting the 50%+ minimum acceptance condition. At the last close, the gross spread is 1.4%. 


Chip Eng Seng (CHIP SP)’s Revised S$0.75 VGO from the Tangs

<ul>
<li>
<a href="https://www.smartkarma.com/entities/chip-eng-seng-corp-ltd" target="_blank" data-smartkarma-citation="entities:6441:1" rel="noopener">Chip Eng Seng Corp (CHIP SP)</a> disclosed a conditional VGO from the Tangs at S$0.720, a 6.7% premium to the undisturbed price (6 September). The price is not declared final. </li>
<li>Irrevocables and family represent 41.44% of outstanding shares. The VGO has a 50%+ minimum acceptance condition which requires around a 15% minorities acceptance rate.</li>
<li>While the last close is in line with the offer, it is attractive in the context of historical prices/multiples. Therefore, there is a good chance of hitting the 50% threshold.</li>
</ul>



Chip Eng Seng Corp (CHIP SP) disclosed a conditional VGO from the Tangs at S$0.720, a 6.7% premium to the undisturbed price (6 September). The price is not declared final. 
Irrevocables and family represent 41.44% of outstanding shares. The VGO has a 50%+ minimum acceptance condition which requires around a 15% minorities acceptance rate.
While the last close is in line with the offer, it is attractive in the context of historical prices/multiples. Therefore, there is a good chance of hitting the 50% threshold.


Chip Eng Seng (CHIP SP)’s S$0.72 VGO from the Tangs

Singapore

SLB Development is a diversified property developer and investment holding company. It develops and sells residential, mixed-use, industrial, and commercial properties, and provides development management services. The company was incorporated in 2017 and is headquartered in Singapore.

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SLB Development (SLB SP)

Merger Arb Mondays (27 Jan) - Fosun Tourism, Get Nice, Lifestyle China, Canvest, Japfa, SLB

This week, the highest gross spreads are SLB Development (36.1%), Japfa (17.0%), Seven & I (16.8%), Lifestyle China (15.3%), Get Nice Financial...

Arun George