Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>After <a href="https://www.smartkarma.com/entities/goldlion-holdings-ltd" target="_blank" data-smartkarma-citation="entities:12359:1" rel="noopener">Goldlion (533 HK)</a>'s spectacular Scheme fail, <a href="https://www.smartkarma.com/entities/soundwill-holdings-ltd" target="_blank" data-smartkarma-citation="entities:19318:1" rel="noopener">Soundwill  (878 HK)</a> appeared destined to be the next failure as shares dipped hard ahead of the Scheme vote. And fail it did.</li>
<li>Just like for Goldlion, Soundwill's Offer was clearly light. The counter-argument was that terms were, arguably, as good as it gets. And no competing Offer would emerge. Minorities voiced otherwise.</li>
<li>Hong Kong has been the proverbial graveyard for arb deals of late. However, in a positive sense, minorities in Goldlion and Soundwill simply rejected opportunistic Offers. </li>
</ul>


After Goldlion (533 HK)'s spectacular Scheme fail, Soundwill  (878 HK) appeared destined to be the next failure as shares dipped hard ahead of the Scheme vote. And fail it did.
Just like for Goldlion, Soundwill's Offer was clearly light. The counter-argument was that terms were, arguably, as good as it gets. And no competing Offer would emerge. Minorities voiced otherwise.
Hong Kong has been the proverbial graveyard for arb deals of late. However, in a positive sense, minorities in Goldlion and Soundwill simply rejected opportunistic Offers. 


Soundwill (878 HK): Thoughts On The Latest Scheme Fail

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/soundwill-holdings-ltd" target="_blank" data-smartkarma-citation="entities:19318:1" rel="noopener">Soundwill Holdings (878 HK)</a> shareholders have voted against the Foo family’s HK$8.50 per share offer. The minority participation rate was high, and the NO vote comfortably failed the value test.</li>
<li>Unlike the <a href="https://www.smartkarma.com/entities/goldlion-holdings-ltd" target="_blank" data-smartkarma-citation="entities:12359:1" rel="noopener">Goldlion Holdings (533 HK)</a> deal break, the price action over the last three days pointed to a deal break. Like previous deal breaks, this one offers hard lessons.</li>
<li>Soundwill has the fourth-highest premium of the pre-deal break price to the undisturbed price compared to previous deal breaks. My estimated deal-break price is HK$5.63, 13.2% below the last close.</li>
</ul>



Soundwill Holdings (878 HK) shareholders have voted against the Foo family’s HK$8.50 per share offer. The minority participation rate was high, and the NO vote comfortably failed the value test.
Unlike the Goldlion Holdings (533 HK) deal break, the price action over the last three days pointed to a deal break. Like previous deal breaks, this one offers hard lessons.
Soundwill has the fourth-highest premium of the pre-deal break price to the undisturbed price compared to previous deal breaks. My estimated deal-break price is HK$5.63, 13.2% below the last close.


Soundwill Holdings (878 HK): Hard Lessons from Another HK Arbageddon

<ul>
<li>On the 7th March, small-cap property developer <a href="https://www.smartkarma.com/entities/soundwill-holdings-ltd" target="_blank" data-smartkarma-citation="entities:19318:1" rel="noopener">Soundwill (878 HK)</a> announced an Offer from Grace Foo (ED) and her family, controlling 74.97% of shares out, by way of a Scheme.</li>
<li>The Offer Price of  $8.50/share, including a $1.00/share dividend, was a 62.84% premium to undisturbed. But a 87.66% discount to the (then) most recent NAV. Terms were final.</li>
<li>
The Scheme Doc is now <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2025/0430/2025043000131.pdf" target="_blank" rel="noopener">out</a>, with a Court Meeting on the 23rd May, and payment on or before the 11th June. The IFA (Altus Capital) says "fair &amp; reasonable".
</li>
</ul>


On the 7th March, small-cap property developer Soundwill (878 HK) announced an Offer from Grace Foo (ED) and her family, controlling 74.97% of shares out, by way of a Scheme.
The Offer Price of  $8.50/share, including a $1.00/share dividend, was a 62.84% premium to undisturbed. But a 87.66% discount to the (then) most recent NAV. Terms were final.

The Scheme Doc is now out, with a Court Meeting on the 23rd May, and payment on or before the 11th June. The IFA (Altus Capital) says "fair &amp; reasonable".



Soundwill Holdings (878 HK): 23rd May Vote On Founder's Offer

<ul>
<li>The spread to the Foo family’s HK$8.50 offer for <a href="https://www.smartkarma.com/entities/soundwill-holdings-ltd" target="_blank" data-smartkarma-citation="entities:19318:1" rel="noopener">Soundwill Holdings (878 HK)</a> has materially increased to 15.8% over the last two trading days. The vote is on 23 May. </li>
<li>Several readers have asked if the Soundwill offer will mirror the <a href="https://www.smartkarma.com/entities/goldlion-holdings-ltd" target="_blank" data-smartkarma-citation="entities:12359:1" rel="noopener">Goldlion Holdings (533 HK)</a> deal break. The two schemes share similarities but are also different in several ways.</li>
<li>The share price action either reflects an imminent deal break or a result of a negative feedback loop. Tread carefully as this is a high-risk/high-reward situation.</li>
</ul>


The spread to the Foo family’s HK$8.50 offer for Soundwill Holdings (878 HK) has materially increased to 15.8% over the last two trading days. The vote is on 23 May. 
Several readers have asked if the Soundwill offer will mirror the Goldlion Holdings (533 HK) deal break. The two schemes share similarities but are also different in several ways.
The share price action either reflects an imminent deal break or a result of a negative feedback loop. Tread carefully as this is a high-risk/high-reward situation.


Soundwill Holdings (878 HK): An Opportunity or Another HK Arbageddon?

<ul>
<li>
<a href="https://www.smartkarma.com/entities/soundwill-holdings-ltd" target="_blank" data-smartkarma-citation="entities:19318:1" rel="noopener">Soundwill Holdings (878 HK)</a>’s IFA opines that the Foo family’s HK$8.50 offer is fair and reasonable. The vote is on 23 May. </li>
<li>Key conditions include approval by at least 75% of independent shareholders (&lt;10% of independent shareholders' rejection) and a headcount test. No shareholder holds a blocking stake. </li>
<li>The offer is attractive compared to historical trading ranges. The vote risk is low. At the current price and for a June 11 payment, the gross/annualised spread is 4.3%/44.0%. </li>
</ul>



Soundwill Holdings (878 HK)’s IFA opines that the Foo family’s HK$8.50 offer is fair and reasonable. The vote is on 23 May. 
Key conditions include approval by at least 75% of independent shareholders (&lt;10% of independent shareholders' rejection) and a headcount test. No shareholder holds a blocking stake. 
The offer is attractive compared to historical trading ranges. The vote risk is low. At the current price and for a June 11 payment, the gross/annualised spread is 4.3%/44.0%. 


Soundwill Holdings (878 HK): Wide Spread Ahead of the 23 May Scheme Vote

Hong Kong

Soundwill Holdings Limited, through its subsidiaries, develops, trades, invests in, and manages properties in Hong Kong.  The Company also develop urban infrastructure.

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Soundwill Holdings (878 HK)

Soundwill (878 HK): Thoughts On The Latest Scheme Fail

The outcome for Soundwill was not a big surprise. However, expect current and future illiquid small-cap arbs to trade wide(r) if there is a whiff...

David Blennerhassett